Construction BUSINESS

A plan to unlock offshore renewable energy through public-private partnerships will be discussed by European leaders this week.

The transmission system operators (TSOs) who operate in the North Seas (including Ireland’s) will present a report which addresses challenges related to supply chains, cost distribution and financing and market design to the High-Level offshore event of the Belgian Presidency in Bruges on the 15th of May.

The report* states that supply chain stability requires public guarantees and funding TSOs can enhance the availability of increased production capacity by establishing contracts with suppliers and construction companies early on, which will provide vendors with better certainty. However, this requires guarantees to be put in place for manufacturers, which are a burden on the balance sheets of TSOs and can block the release of financial resources which they require for other projects. Therefore, public guarantees and financing can play a relevant role in securing the expansion of production capacity.

A well-designed de-risking framework could facilitate investment without the need for direct state aid, allowing for a faster ramp-up in a competitive environment.

As for the TSOs, having a part of their debt be guaranteed by a European body to obtain lower-cost loans will be helpful. This guarantee would be a first step towards a public-private partnership for the financing of electrical infrastructure.

The TSOs acknowledge that funding and de-risking constitutes a bottleneck both for grids and for the generation side. Thus, there is a need to simultaneously address the financing challenges for generation projects.

The rapid expansion of offshore wind power is rendered vulnerable by massive bottlenecks in grid component supply chains, access to suitable ports and construction vessels are significant obstacles to this expansion.
Offshore TSO Collaboration is a forum for the transmission system operators in nine countries close to the North Sea.

The purpose is to facilitate development and implementation of an offshore grid infrastructure that facilitates the political ambitions for renewable energy production in the North Sea.

Offshore electricity transmission projects being assessed include hybrid interconnector projects in the Celtic Sea area that would be delivered after 2035. Such projects would provide transmission capacity between Ireland and the UK and Continental Europe and would enable the connection of geographically diverse OWF resources in the Celtic Sea

This is a very encouraging pragmatic step for infrastructure delivery in Europe and I hope a well-designed de-risking framework that could facilitate investment without the need for direct state aid can be applied to ports, shipping companies, and key parts of the supply chain in Ireland.

To book a ticket for the third Power & Energy Conference in Waterford on June 13^th go to: https://www.powerandenergy.ie/.