SSE says funding big Irish projects ‘harder to justify’ if delays continue

Energy firm says it needs 'advancecment very soon' on huge wind project

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Sean Pollock Email

January 30 2022 02:30 AM

SSE, one of the largest offshore wind energy developers, has said investment in other large projects in Ireland will be “more difficult to justify” to its board given delays it has experienced at its offshore wind farm project in Arklow.

The company, which claims to have the largest offshore wind development pipeline in the UK and Ireland, made the comment in an email sent to the Department of Environment, Climate and Communications (DECC).

The email, sent by SSE’s country lead Stephen Wheeler on October 7, followed a meeting between SSE and the secretary-general of DECC in September on the challenges facing Ireland’s energy market and EirGrid’s Generation Capacity Statement.

Wheeler covered SSE’s proposed Arklow Bank Wind Park Phase 2 offshore wind project, which could generate enough energy to power almost 450,000 homes annually and represent an investment of up to €2bn. He also addressed a proposal to extend the life of SSE’s oil-fired Tarbert Power Station in Co Kerry and the potential for additional generation capacity.

On the Arklow project, Wheeler said SSE appreciated the urgency with which the Commission for Regulation of Utilities and Eirgrid were developing solutions to meet Ireland’s capacity needs. However, he said it believed the solutions undermine “Ireland’s decarbonisation aims and investment credibility” unless the same impetus is applied to the renewables transition.

Wheeler said SSE’s urgency to develop the Arklow project had, in its view, not been reciprocated by Government. SSE is looking to extend longstop dates associated with the lease and deliver the project by 2025, which requires “decisive action” before the end of 2021.

In the letter, Wheeler said he believed projects coming through the new Maritime Area Planning (MAP) Act would not be operational until 2028. He claimed the next four or five years could be “characterised by an increase in fossil fuel generation” unless offshore projects start sooner.

Wheeler added SSE had put significant resources into Arklow for many years, with its lack of progress set to make the “investment in other large projects in Ireland more difficult to justify with our board and shareholders, unless we see advancement very soon.”

On Tarbert, Wheeler said SSE understood from its meeting that Government hoped to extend the life of several units due to close soon, including the Co Kerry plant. SSE plans to close Tarbert by the end of 2023.

Wheeler mentioned challenges around extending Tarbert’s operation, including SSE’s belief it has no scope to operate beyond 2023 due to EU emissions regulations and issues around additional cost and safety.

While Wheeler said SSE would explore the option of Tarbert staying open beyond its scheduled closure, it said it was important all parties were aware there was a “significant possibility extension may not be possible”.

He added SSE recognised the critical work DECC was undertaking, and it would engage in discussing potential solutions it could offer.

In response to questions from the Sunday Independent, DECC said its 2030 “ambitions” for offshore wind were “on track”. It said the MAP Act would provide offshore wind developers with “clarity” on the consenting system.

DECC said the legislation provided for establishing the Maritime Area Regulatory Authority, a Government priority. Work on progressing projects is going on in the interim, which could help the first Offshore Renewable Energy Support Scheme (ORESS) to open in the fourth quarter of 2022, with applications for development consent to be made to An Bord Pleanála.

SSE said it was committed to investing in a renewables-led electricity system in Ireland. It added it would work with Government and authorities to deliver its pipeline of offshore wind projects here.

On Tarbert, SSE said it recognised the challenges surrounding energy security and is committed to working with the Government to find the right solutions. It added Tarbert was required to close by the end of 2023 in line with EU emission regulations, with SSE focusing on increasing low-carbon energy capacity led by offshore wind.

On the Arklow project, the Department of Housing, which deals with foreshore licences, has said it would not be appropriate to comment in detail on an application that will come before the minister for determination. It has also said it believed SSE’s application for Arklow was “unprecedented in the level of change from the existing lease arrangements”. SSE has previously claimed the changes were “legally immaterial”.