Delays in setting up a new State agency to approve offshore wind farms are being blamed for energy giant Shell pulling out of a massive project that would power around 1 million Irish homes.
Shell has confirmed it is scrapping its involvement in the Western Star and Emerald projects off the coasts of Clare and Cork, delivering another blow to Ireland’s recently hiked targets for 7GW offshore wind energy by 2030.
It comes a year after Norway’s Equinor abandoned a joint venture with ESB to build a €2 billion wind energy project at Moneypoint, Co Clare, venting its frustration about planning delays at the time.
Shell had brokered a deal with Irish company Simply Blue Group - taking a 51 per cent share - only last year as part of a huge investment in the Western Star and Emerald projects.
In a statement to The Irish Times, a Shell spokesman said: “Shell and Simply Blue Group confirm that Shell will end its involvement in the Western Star and Emerald offshore wind projects in Ireland.”
Shell declined to answer why it was pulling out of Ireland, but industry sources said it was a further signal of mounting “frustration” from overseas investors at delays in the establishment of the new Maritime Area Regulatory Authority (MARA).
The State agency under the responsibility of the Department of Housing, Local Government and Heritage was due to be open for business at the start of this year.
It was set up to grant licences for developers to build wind farms on the seabed off Ireland. Last week, the Government was advertising for a chairman and board members.
“It is frustrating to see another international investor pulling out because of issues with the Irish planning system,” said a renewable energy industry source.
“Shell needs MARA to be able to apply for consent. If it can’t get consent then it can’t apply for planning permission from An Bord Pleanála.”
Noel Cunniffe, chief executive of industry representatives Wind Energy Ireland, described the latest high-profile exit from the Irish offshore wind market as a “concern”.
“This decision simply underlines what we have been saying for some time,” he said.
“We are competing in a global market for offshore wind resources and we need the Government to put in place planning and regulatory frameworks that provide developers with certainty.
“We need to see a policy put in place for the Phase 2 offshore wind process and, critically, the MARA must be established as soon as possible to give developers clarity on how the next phase of offshore wind projects can deliver for 2030.”
In July, Minister for the Environment Eamon Ryan ramped up Ireland’s offshore wind energy targets for 2030 by 40 per cent, from five to seven gigawatts, as part of wider climate ambitions to cut our reliance on fossil fuels.
In a statement, Cork-headquartered Simply Blue group said it remains “fully focused” on pressing ahead with the Emerald and Western Star projects. The company already has two floating wind projects in the North.
A spokeswoman for Mr Ryan said on Saturday the Government “is well on track” to meet the 2030 targets as well as longer term ambitions to increase renewables.
“While it is disappointing to see a major player exit the market, we have seen many more new developers (approximately 20 consortia so far) entering the market and expect to see many other players come into Ireland in the coming years, particularly as development in deeper waters off the west and southwest coast becomes more commercially viable,” she said.
“This is a very active market. So much so that Simply Blue has signed a Memorandum of Understanding this week with white-gate oil refinery to provide a significant quantum of hydrogen to the refinery.
“Significant work has been progressed to develop a robust regulatory and legislative regime, which is now operational. The establishment of this new regime provides clarity and certainty to developers.”
She added the MARA would be established “in early 2023″ and under the Maritime Area Planning Act 2021, will have the authority to grant licences for survey works beyond the 12 nautical mile limit provided for under the Foreshore Acts “paving the way for deployment of floating wind in our deeper coastal waters”.