REPowerEU plan is good for Ireland's renewable ambitions

Acknowledging that Russia previously provided more than 40% of the EU’s total gas consumption, efforts to decouple Europe from Russian fossil fuels reflected concern that member states were effectively funding the war in Ukraine through their energy consumption.

One year on, REPowerEU is showing signs of being a massive lever for the delivery of the energy transition and wider EU decarbonisation. The plan is also central to delivering on earlier, very ambitious, EU energy policy statements – including the 2020 EU Green Deal. Aside from EU-level reforms, policies contained within the plan require and have triggered action by individual member states which will have an impact on business.

The reach of REPowerEU is present in Irish political and economic policy – specifically energy security, offshore wind policy and climate change mitigation with significant consequences for the development of green hydrogen, biomethane, offshore wind and solar.

Grid and energy infrastructure

REPowerEU calls on member states to plan and implement measures that speed up grid connections and the development and planning phases generally for new energy infrastructure projects. EU states are required to simplify and accelerate permitting procedures for renewable energy projects and related infrastructure. Applicable planning and permit-granting procedures are presumed as being in the “overriding public interest”. This focus on the grid is replicated and amplified in subsequent offshore wind policy developments.

Hydrogen

Efforts to make the EU’s hydrogen policy goals tangible are at the heart of REPowerEU. The EU has moved rapidly to put shape on and build confidence on delivery of the hydrogen market. For example, REPowerEU set targets for EU domestic hydrogen production and for hydrogen imports – 10 million tonnes of each by 2030 – and is supported by Commission legislation that concerns the definition and production of renewable hydrogen, which is designed to promote decarbonisation from greater use of hydrogen.

generation and supply of green hydrogen from Ireland to Germany.  German appetite for green hydrogen will be a fundamental pillar for development of Irish offshore wind post the initial target of 5GW by 2030. Current Irish offshore wind policy includes, after 2030 delivery, an additional 2GW of offshore wind for the production of green hydrogen.

In March, the Commission launched the European Hydrogen Bank (EHB), an EU public support measure to kickstart the hydrogen economy. The EHB is intended to serve as a market-making tool supporting both the domestic production and consumption of renewable and low-carbon hydrogen. Moreover, it is a critical cog in the establishment of the EU Energy Platform; this platform aims to enable the establishment of “corridors”, common purchase of LNG, gas and hydrogen by pooling demand, optimising infrastructure use and coordinating outreach to suppliers.

The initial funding of the EHB will be provided by the Commission’s Innovation Fund. The fund is partly made up of the monies collected under the Emissions Trading System (ETS) which are paid for greenhouse gas emissions. A competitive bidding mechanism will be introduced, with the first pilot auction to be held under the Innovation Fund set to target hydrogen – both renewable hydrogen production and hydrogen-based industrial production.

The 2023 pilot auction terms and conditions have several similarities to the renewable energy support schemes (RESS) auctions held in Ireland over the past two years. Support structures will take the form of the well-established Contract for Difference (CfD) agreement giving price certainty to a producer. Irish offshore policy assumes floating wind and hydrogen projects will be delivered in parallel after 2030.

The EHB platform should assist with the build out and viability of new green hydrogen projects, as bulk buying from the EU should guarantee certainty for developers. Ireland has, to date, three embryonic but recognised “hydrogen corridors” linking supply and demand.

Solar power and biomethane

Growth in domestic production and consumption of biomethane will be a critical energy transition “tool” and more generally, “thermal decarbonisation” is an emerging theme in Irish energy policy.  Although hydrogen generates a lot more press and attention, REPowerEU also seeks to prioritise the use of biomethane – a key constituent of Ireland’s emissions due to its agricultural output.

In parallel to REPowerEU, the Commission published a new solar strategy to more than double solar photovoltaic power capacity to more than 320GW by 2025 reaching 600GW of capacity by 2030. A new European solar rooftop initiative is also envisaged which would consist of legally binding solar rooftop obligations for new public and commercial buildings and new residential buildings.

Offshore wind

REPowerEU and the Commission both push for the accelerated delivery of vast amounts of new offshore wind generation and grid transmission capacity. But new sources of power are largely pointless if they cannot be efficiently delivered and transported. Although current Irish offshore wind policy acknowledges hydrogen production as a long-term revenue driver, the more significant shift, driven by REPowerEU, is the move to accelerate consenting and identify areas of land and sea suitable for renewable energy permitting.

Under the Esbjerg Declaration, signed in December 2022, the Danish, Dutch, German and Belgian governments have committed to rapid development of new North Sea offshore wind and green hydrogen production – 65GW by 2030. Ireland has recently confirmed on 14 June, the final results of the O-RESS 1 auction, which awarded contracts for difference to four successful bidders for the Phase 1 projects (three in the Irish sea and one in the Atlantic).

Specifically, for Phase 2 projects and beyond, offshore wind projects Ireland has firmly adopted the use of Designated Maritime Area Plans (DMAP(s)) to move the offshore wind to “plan-led” development. The importance of DMAPs cannot be underestimated including matching development to unallocated grid capacity, grid development and phased ORESS auctions.

Ireland is one of nine signatories to the North Sea Summit Declaration, unveiled in April, which commits the country to scaling up wind energy production in the North Sea and turning the area into an ‘offshore wind powerhouse’.  The North Sea Summit also targets the building of new offshore electricity transmission.

Ireland’s ability and success in developing an offshore wind sector takes on a far wider dimension; the country will be scrutinised at a European and global level across industry, climate change, energy security and politics.

Energy generation innovation

REPowerEU prioritises innovation across the European energy generation and transmission sectors. Given that Ireland’s industrial strategy has long been based on positioning Ireland as an innovator across several sectors including tech, IT and pharma, the country’s ability to retain and develop these industries will be determined, in part, by our ability to provide large amounts of reliable renewable power.

With the specific intention to underpin and address the initial financial challenges in the emerging hydrogen market, the EHB may well drive the roll out and speed of development of the Irish offshore and hydrogen sectors.

The energy transition was always going to step up in pace over time, but REPowerEU sets out to make it an inevitability. Its impact and reach are only beginning to emerge. Ireland needs to see it as a de facto core pillar of its economic and energy policy for the foreseeable future.