![](images/Logos/Business%20Post%20copy2.jpg)
Exclusive: Shell withdraws from major Irish offshore wind projects
The unexpected move by the
multinational energy behemoth could damage Ireland’s ambition to
achieve an 80 per cent cut in energy emissions
![](images/images_09_26_2022/pic3.jpg)
Gordon Shearer of Shell, and Val
Cummins and Hugh Kelly of Simply Blue Group pictured at Loop Head
lighthouse last November, at the official announcement of the two
firms’ partnership on the Western Star floating wind project. Shell
has now withdrawn from the plan. Picture: Diane Cusack
Shell, the multinational
energy giant, is pulling out of the Irish renewables sector in a
potentially significant blow to the country’s climate ambitions, the
Business Post
can reveal.
The move represents a
u-turn by the company, which just last November agreed a deal to
acquire a 51 per cent share in the Western Star Floating wind project
off the coast of Clare from Simply Blue Group, a Cork-based energy
company.
Shell previously said the
project had the potential to generate 1.35 gigawatt (GW) of energy,
enough to power more than 1.1 million homes.
Shell had also struck a
similar agreement to jointly develop the Emerald floating wind project
off the south coast of Ireland with Simply Blue.
A spokesman for Shell
said: “Shell and Simply Blue Group confirm that Shell will end its
involvement in the Western Star and Emerald offshore wind projects in
Ireland.”
In a statement, Simply
Blue Group said that it “remains fully focused on delivering the
exemplary Emerald and Western Star projects off the coast of Cork and
Clare which will deliver a combined 2.65 GW of floating offshore wind
power for Ireland.”
“Simply Blue Group are
progressing towards a new strategic partnership, building on the
momentum of both projects to deliver to facilitate government targets
for Phase 2 of Ireland’s offshore wind development,” the statement
added.
It’s understood efforts
to secure a new partner are in the early stages.
The Western Star project
is due to be developed in two phases with 300 megawatt (MW) to 450 MW
of capacity coming on stream in the first and the remaining
700MW-900MW to follow afterwards.
Some 300MW of installed
capacity is planned initially through the Emerald project, with the
potential to scale-up to a total installed capacity of 1GW.
This is equivalent to
powering 800,000 Irish homes or the capacity of the Moneypoint power
station, Ireland’s largest electricity generation station.
Shell’s withdrawal from
the Irish renewables sector represents a potentially significant blow
to Ireland’s target of achieving an 80 per cent cut in energy
emissions.
Equinor, the Norwegian
energy giant, confirmed last year that it was exiting the Irish
market, citing frustrations with the regulatory and planning process
here.
One source said Shell was
focusing its efforts on countries with more accommodating legislative
frameworks.
Equinor had been working
with the ESB since 2019 to jointly build a 1.4GW floating offshore
wind farm off the coast of Clare and Kerry by 2028 at a cost of circa
€5 billion.
Sources in the energy
sector described Equinor’s departure at the time as a “huge blow” to
Ireland’s climate ambitions, as offshore wind developments require
very large companies with significant financial firepower and
technical expertise to deliver them.
The Business Post
understands that the draft terms and conditions for the very first
Offshore Renewable Electricity Support Scheme (O-RESS) auction caused
significant disquiet among renewable energy developers when they were
released late last year, particularly a clause requiring companies to
put up multimillion-euro security guarantees for projects.
Under the draft terms for
the O-RESS auction, a successful energy company would be required to
put up a “performance security’, which is essentially a bond to be
kept in escrow until the project is delivered.
This will require
developers to put up a bond of €24 for every megawatt hour of energy
the proposed project will deliver. As most offshore wind projects are
very large in size, the bond required typically runs into the tens of
millions.
A major issue in the
draft guidelines was believed to relate to a clause which stated that
the Minister for Energy may take the bond if the project has not been
granted planning consent by 2024.
It’s unclear whether the
same concerns contributed to Shell’s decision.
The Commission of
Regulation of Utilities (CRU) is currently holding a series of
consultations on offshore grid connection policy which it said last
week would enable developers to bid confidently in the forthcoming O-RESS
auction.
Green Play Ammonia™, Yielder® NFuel Energy.
Spokane, Washington. 99212
www.exactrix.com
509 995 1879 cell, Pacific.
exactrix@exactrix.com
|