Renewable Island: REPowerEU plan creates an opportunity for Ireland
Shani Stallard, of Pinsent Masons Ireland.
On 18th May 2022 the European Commission published its mammoth REPowerEU plan which aims to accelerate Europe’s green transition with a particular focus on reducing the European Union’s dependence on Russian fossil fuels. In these difficult and tense times, likening the sheer scale and ambition of REPowerEU to a Green “Beast” is somehow appropriate. The flurry of the well-repeated claims as to Ireland’s potential as an energy exporter now need to be put into action - REPowerEU will place Ireland’s ability to deliver and benefit from the core policy drivers, in the spotlight.
REPowerEU is not just “another” policy; it is essentially European law and is already having a deep impact across Europe.
Scale and delivery challenges aside, REPowerEU is partly comprised of re-packaged concepts, specifically expanding and fast-tracking the 2020 (pre-Covid) European Green deal and Fit for 55 proposal. At the heart of the plan is the integration of new and existing power generation and grid systems and pushing far greater levels of co-ordination between member states and national transmission system operators.
REPowerEU zeroes in on five policy pillars indicated in the accompanying graphic and offers numerous new tangible strategies to deliver these objectives.
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With particular relevance to Ireland, REPowerEU prioritises:
- Compulsorily fitting of solar panels for all new residential buildings by 2029, all new public and commercial buildings with certain floor area sizes by 2026 and all existing public and commercial buildings with certain floor area sizes by 2027;
- Large scale floating offshore wind and green hydrogen production;
- Amending the Renewable Energy Directive to recognise that renewable energy projects are an overriding public interest, and a recommendation to tackle permitting for renewable energy projects including providing “go-to” areas for renewable energy projects; and
- Simplifying and shortening of permitting processes in areas with lower environmental risks.
Numerous ports around Ireland have been earmarked as suitable for the development as hubs for large renewable offshore wind farm projects. In parallel to offshore wind, brownfield land in or near ports will implicitly be focused on the emerging hydrogen supply chain (green ammonia, fuel cells, power generation and export).
Ireland’s Exclusive Economic Zone (EEZ) extends 200 nautical miles into the Atlantic and (within Ireland at least) is a relatively unknown and under-appreciated asset. That said, the potential of the EEZ is clearly not lost on the European Commission. To convert the EEZ into something meaningful under REPowerEU, we will see a lot more “sector-coupling” between deep water floating technology and production of green hydrogen or ammonia; Irish ports are already factoring this into their growth plans.
Globally, offshore wind and green hydrogen production are already recognised as mutually complementary sectors. For that reason alone however, Ireland is not in a position to assume it will enjoy a last-mover advantage.
Although Ireland has achieved an impressive level of renewables penetration since 2005; the pace of construction and energisation of renewable energy projects in Ireland is simply too slow. Renewables sits squarely in the mainstream of the global energy market; it is rapidly growing and currently largely extends to wind, solar, storage and biogas.
The reasons for the Irish slow build are largely planning-related but unpredictable grid connection costs have become a serious problem in recent years. Although Ireland is not alone in Europe with slow build out rates, REPowerEU specifically targets and calls on Governments to improve delivery through planning and regulatory certainty.
Recent adoption of electric vehicles is already leading to new phraseology including “juice” (power) and “range anxiety” (worrying about your battery going flat while driving). As Europe looks to the clean energy transition it recognises it needs to shake up and allow localised consumption of power (you may be familiar with phrases like “private wire”, “corporate power purchase agreements” and “behind the meter”).
Ireland’s power generation community are now on 1st name terms with power purchasing teams at some of the world’s largest international technology companies. The tech companies take security of power supply just as seriously as they take a stable tax environment and whilst the data centres require large amounts of power – that power needs to be green power. We see the large Irish pharmaceuticals and agri-companies following suit.
For the average consumer, increased generation of clean energy should assist with lowering energy prices in Ireland. In addition, increased investment and expenditure reforms on key green technology and infrastructure should in time, see reduction of prices in areas such as residential solar panels, heat pumps and electric vehicles.
Meaningful coordination between industries, stakeholders and government agencies will be critical in Ireland meeting its REPowerEU and Green Deal goals, and there is no doubt that strong leadership at national level for the renewable energy sector will be required.
To date, the “energy transition” means different things to different people but given the global political climate, REPowerEU needs to be regarded as a step change in energy policy that offers great economic opportunity but firmly requires Ireland to step up.
