Ireland has awarded rights to develop a 900 megawatt (MW) offshore wind farm to a joint venture between Denmark's Orsted and Irish utility ESB, Orsted said on Wednesday.
The Tonn Nua project was awarded with a 20-year contract-for-difference (CfD) secured at a strike price of 98.72 euros ($114.32) per megawatt hour. The scheme ensures developers a guaranteed electricity price, with costs or savings passed onto consumers based on wholesale price fluctuations.
The Irish energy ministry said in a separate statement that the auction had secured a "highly competitive price compared to recent auctions internationally".
The offshore wind sector has faced significant financial headwinds, including rising costs, higher interest rates and supply chain disruptions, deterring bidders in auctions across Europe. Developers have cited insufficient subsidies and revenue guarantees as key barriers in markets such as Denmark, Germany, France, the Netherlands and Lithuania.
The Tonn Nua site is in an early phase of development and will need to seek several permits from authorities and also meet the joint venture's own value creation criteria, Orsted said. The wind farm is expected to reach its final investment decision around 2031, with the first power generation seen in the mid-2030s.
The successful bid comes as Ireland, which currently has just 25 MW of installed offshore wind capacity, aims to diversify its energy mix and increase renewables' share in electricity generation.
($1 = 0.8636 euros)
(Reuters)