Orsted and ESB won 900 MW of offshore wind tenders in Ireland

Orsted announced on Wednesday that Ireland had awarded the rights to build a 900 Megawatt (MW), offshore wind farm, to a joint-venture between Denmark's Orsted utility and Irish utility ESB.

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. Developers are guaranteed a fixed electricity price. Any savings or costs resulting from wholesale price fluctuations will be passed on to consumers.

In a separate announcement, the Irish energy ministry stated that the auction secured a "highly-competitive price in comparison to recent international auctions". In recent years, the offshore wind industry has been facing significant financial challenges, such as rising costs, increased interest rates, and disruptions to supply chains. This has discouraged bidders from participating in auctions throughout Europe. In markets like Denmark, Germany France, The Netherlands, and Lithuania, developers have pointed to insufficient revenue guarantees and subsidies as the main barriers.

Orsted stated that the Tonn Nua project is still in its early stages of development. It will require several permits to be obtained from authorities, and it must also meet Orsted's criteria for value creation. The wind farm will reach its final decision on investment around 2031. First power generation is anticipated in the mid-2030s. Ireland, with only 25 MW installed offshore wind capacity at present, is looking to diversify their energy mix and increase the share of renewables in electricity production.

(source: Reuters)