Final report: Offshore grid delivery models for Ireland Options paper for offshore wind Submitted by: Sil Boeve, Barry Vree, Carmen Wouters, Lennard Sijtsma, Ainhoa Villar Lejarreta, Anna Pulo and Wolfgang Schlez Navigant Netherlands B.V. Stadsplateau 15 3521 AZ Utrecht The Netherlands 030 662 3300 navigant.com Reference No.: 210668 ORDER NO: EIR-010347 31 March 2020 ©2020 Navigant Netherlands B.V. Final report: Offshore grid delivery models for Ireland DISCLAIMER This report (“report”) was prepared by Navigant Netherlands B.V. (Navigant)1 and is protected by copyright. Navigant’s conclusions are the results of the exercise of its reasonable professional judgment and the information available at the time this report was prepared. The reader hereby agrees and acknowledges he is bound by the disclaimers and/or limitations on liability set forth in the report. 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In furtherance of that effort, we recently renamed Navigant Consulting Inc. as Guidehouse Inc. ©2020 Navigant Netherlands B.V. Page i Final report: Offshore grid delivery models for Ireland DEVELOPING AN OFFSHORE GRID DELIVERY MODEL FOR IRELAND – KEY MESSAGES Ireland has ambitious climate targets towards 2030, including the addition of at least 3.5 GW of offshore wind capacity as stated in the Climate Action Plan (CAP) and supported by a Renewable Energy Support Scheme (RESS). Criteria have been identified to define “Relevant Projects” from the large pipeline of offshore wind projects in Ireland to be included in a transitional scheme to facilitate a fast build-out of offshore wind. A suitable grid delivery model needs to be adopted to develop the targeted offshore wind capacity in Ireland. Navigant carried out a comprehensive review of international approaches and developed four delivery model options that are tailored to the Irish context. The two main classes of grid delivery models in the international context are plan-led and developer-led models2, representing both ends of a spectrum of model options: Developer-led model Plan-led model Developers prepare the requirements for consents, A State Body and/or the TSO is the responsible party select and pre-develop wind farm sites and develop for the complete process of wind farm site selection and build both offshore wind farm and transmission and pre-development and offshore grid connection assets (offshore substation, export cables and development. This model is applied in e.g. the onshore connection assets). This model is applied in Netherlands. e.g. the United Kingdom. Source: Navigant. Seven key drivers in Ireland impact the model design. These drivers include cost levels, environmental impact, future proofing of policies and technologies, required infrastructure, compatibility with Relevant Projects, social acceptance and timely achievement of the 2030 targets. Four enduring grid delivery models tailored to the Irish context were assessed, ranging from a fully developer-led model to a fully plan-led model. The models represent a set of options, each with their advantages and disadvantages, to indicate a spectrum of options fit for the Irish context. The constituent elements of the four models presented could be combined in a variety of ways to form a wide range of additional model options. It follows that the model option or options ultimately chosen will not necessarily be set out in the report and could contain elements of two or more options. A brief description of these grid delivery models is as follows: Option 1. Option 2. Option 3. Option 4. Developer- Plan-defined, developer consents Plan-led, developer builds Plan-led led and builds State defines minimum distance from shore for wind farms, as well Fully Developers responsible for offshore as onshore grid connection points Fully plan-led developer-led wind farm transmission asset and available onshore grid capacity grid delivery grid delivery construction, ownership, operation for RESS auctions; EirGrid pro- model model and maintenance in plan-led model actively plans and coordinates onshore grid reinforcements Source: Navigant. The advantages of the developer-led model include compatibility with the Relevant Projects that can be developed quickly and that are more likely to be compatible with existing legislative and policy frameworks and leveraging existing developer experience in the delivery of offshore wind farms. The disadvantages include minimal onshore-offshore transmission asset coordination, the likelihood that any public acceptance campaign will be focused on a single project rather than multiple projects, greater risk of additional infrastructure with associated environmental 2 Plan-led and developer-led can also be referred to as centralised and decentralised grid delivery models, respectively. ©2020 Navigant Netherlands B.V. Page 1 Final report: Offshore grid delivery models for Ireland impact and more complexity involved in future proofing of offshore transmission assets. Option 2 provides mitigation to some of these disadvantages compared to option 1. The advantages of the plan-led model include long-term onshore-offshore transmission coordination with the potential for reduced infrastructure, the ability to craft a coordinated public acceptance process covering multiple projects and ease of future proofing of technology. The disadvantages include the time needed to develop new governmental capabilities, and policy, regulatory, licence and legislative frameworks which are likely required, challenges with state bodies simultaneously developing multiple offshore and onshore renewable energy and transmission projects, and incompatibility with Relevant Projects. Option 3 gives developers control of the construction of both the offshore wind farm and transmission assets, reducing potential risks as perceived by the offshore wind industry. A transition towards a more plan-led model option (3 or 4) could offer a pathway to leverage the timing advantages of more developer-led models in the short term and allows greater coordination of onshore-offshore grid development in the medium to long-term. As always, the overall suitability of each model option in the Irish context highly depends on the emphasis and relative weighting of certain criteria to reflect key stakeholder interests. It is important that a timely decision is made to determine which grid delivery model will be adopted in Ireland, to ensure preparations for this model can commence in time such that the 2030 renewable targets are achievable. ©2020 Navigant Netherlands B.V. Page 2 Final report: Offshore grid delivery models for Ireland EXECUTIVE SUMMARY Ongoing developments Ireland Ireland has ambitious climate targets towards 2030, including the addition of at least 3.5 GW of offshore wind capacity as stated in the Climate Action Plan (CAP) and supported by a Renewable Energy Support Scheme (RESS). Criteria for “Relevant Projects” have been defined to qualify some projects from the large pipeline of offshore wind projects in Ireland to be included in a transitional scheme to facilitate a fast build-out of offshore wind. To support the roll-out of offshore wind capacity, various developments are ongoing in Ireland that are relevant for the choice of grid delivery model for offshore wind: • A Climate Action Plan has been developed with ambitious targets of achieving at least 3.5 GW of offshore wind capacity in 2030; currently only 25 MW is operational; • The RESS support scheme is under development with multiple auction rounds planned by 2030. The RESS 1 design foresees a technology-neutral auction scheme (except for the solar preference category) in which offshore wind competes against other technologies. Future RESS rounds are expected to offer offshore wind specific support, as outlined in the CAP; • An update in marine spatial planning is being conducted with the development of the National Marine Planning Framework (NMPF) and Marine Planning and Development Management (MPDM) Bill, which will impact marine spatial planning and the consenting process for offshore wind developments. These updates are compatible with both a plan-led and developer-led grid delivery model; • Several legacy offshore wind projects in Ireland have progressed further in development than others by e.g. acquiring a lease or grid connection offer. The Department of Housing, Planning and Local Government (DHPLG) together with the Department of Communications, Climate Action and Environment (DCCAE) has defined criteria to qualify some of these as Relevant Projects, which can continue their development under a “transition protocol” prior to enactment