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13 February 2020

EDF’s Codling Bank purchase signals dawn for offshore wind

By Andries Wantenaar

The EDF Group has acquired a 50% stake in the Codling Bank Offshore Wind Park in Ireland from Hazel Shore. With both Ireland and EDF lagging in terms of offshore wind capacity when compared to similar parties – this is hopefully a sign of the country and utility emerging in the market.

The project is now owned 50% by EDF Group and 50% by Fred Olsen Renewables Ltd, with the two companies set to collaborate through the remaining development and operation. The project is located 13 kilometers off County Wicklow across two sites, Codling 1 and Codling 2, the latter of which is not yet consented. Codling 1 will have 220 turbines rated at 5 MW, for 1100 MW total, while Codling 2 is currently proposed to have 200 turbines and 1000 MW.

Compared to other big players like EDP, Enel, or Iberdrola, EDF is much less committed to renewable power, which forms less than 15% of its nameplate capacity, but the company does intend to double its renewable capacity to 50 GW net by 2030. Currently EDF has 6 GW of offshore wind in development in China, the USA, and Europe.

In June 2019 the Irish government committed to a new renewables plan which requires 70% renewable energy by 2030; the country is currently at 30%. Offshore Wind will form 3.5 GW of this targeted capacity.

Ireland currently has only one offshore wind farm, the 25 MW Arklow Bank Project, also offshore Wicklow County, which was commissioned in 2004. Originally, the project was to have a second phase with 193 additional turbines installed, bringing the project up to 520 MW. However, this second phase was stalled and then cancelled in 2007, with preference given to onshore wind in the country.

As of 2018, SSE Ireland appears to have resuscitated that planned second phase, conducting a survey of the area in September 2018. With modern turbines, only 100 will be needed for 520 MW, instead of 193. The revival of offshore wind in Ireland will be motivated by a combination of recent wind turbine design improvements and Ireland’s emissions reduction commitments. Ireland is a reasonably wealthy country even disregarding the effects of its favorable tax policies towards corporations and is a prime location for offshore wind considering the good conditions in the Irish Sea and the proximity of the British wind industry. However, we’ve previously highlighted that its energy grid infrastructure will need a lot of upgrading to handle added capacity. Ireland’s population of a little under 5 million is currently growing at a rate of a little more than 1%, so it’s not domestic electricity demand which is the issue.

Instead, additional capacity will be needed for massive data centers which various tech giants such as Apple, Amazon, Google, Facebook, and Microsoft are planning to build around Dublin. Aside from fiscal considerations, the country’s cold climate is also convenient for such centers. In 2017, those data centers were already an estimated 5% of electricity usage in Ireland, requiring around 250 MW, and one recent estimate has data centers consuming up to a third of Ireland’s generation in 2027.

The country also has a potential for offshore wind which far exceeds its domestic demand of around 30 TWh, with a technical resource potential of nearly 3,000 TWh per year, behind only the UK in Europe. The country has had a 500 MW submarine cable connection with the UK since 2012, and a similar 700 MW connection with France, the Celtic Interconnector, is planned to be completed in 2025, with development hastened in response to Brexit. In November 2019 the Irish Academy of Engineering said that the next 4.5 GW of renewables expansion, largely driven by these datacenters, would require about €9 billion to be spent on grid upgrades.

Our Rethink Energy Offshore Wind Forecast to 2040 predicts that Ireland will meet its anticipated 3.5 GW by 2030 offshore wind target but will fall well short of the 22.2 GW which the European Commissioned would like to see by 2050. Our estimate is 8.6 GW for Ireland by 2040, with any true boom in the industry occurring after that, contingent on grid expansion.

Despite selling the majority of its stake in the Codling Bank project, Hazel shore will retain an equity-based interest.