The Irish Government has announced the terms and conditions for the second offshore wind auction under the ORESS scheme, called ORESS Tonn Nua. This auction framework sets up a competitive bidding process where a single developer will be awarded ORESS support for a project to be developed at the “Tonn Nua” site — to consist of an approx. 900 MW offshore wind farm in the South Coast DMAP (Designated Maritime Area Plan).
The qualification phase is expected to open in Q1 2025, with the bidding phase expected to begin in Q2. Our Energy team delves into the auction’s scope and key parameters.
The publication of the terms and conditions for the ORESS Tonn Nua Offshore Wind Auction (Tonn Nua ORESS Terms and Conditions) marks a significant milestone for Ireland. Significantly, it will be the first to be held for an area specifically within the South Coast DMAP. It is also Ireland’s second-ever offshore auction for state support of offshore renewable energy. The successful project is required to be an offshore fixed bottom wind project, in accordance with the South Coast DMAP.
Scope of the terms and conditions
The Tonn Nua ORESS Terms and Conditions include a number of deviations from those used by the Department of the Environment, Climate and Communications for ORESS 1. These will need to be considered carefully by interested stakeholders as there have been some subtle amendments to important definitions and provisions. From an initial review, a number of the key features of Ireland’s second offshore auction regime include:
Project Information Document
Each applicant is required to submit a Project Information Document, which form will be provided in the Qualification Information Pack. Applicants must submit detailed information during the qualification phase on projected conditions at the Offshore Site. This includes anticipated seabed conditions, siting constraints and wind speeds. The information must be supported by third party analysis, survey data related to the project as well as any relevant data available to or collected by the Applicant. It must also supply information on the technical parameters of the proposed project, including the foundation types, inter-array cable lengths and export cable lengths to the offshore substation and cable size. A detailed Gantt chart is required, outlining the delivery plan for the proposed project and demonstrating compliance with key milestones.
Bid Bond
The Bid Bond has been set as a fixed €20,000,000, rather than an amount to be calculated based on the Deemed Energy Quantity as was the case for ORESS 1. This will be at risk in a number of different circumstances including where the information submitted with the Project Information Document is found not to have been true and accurate at the time of submission.
Winning applicant
The Minister for the Environment, Climate and Communications will decide the winner of the ORESS Tonn Nua Auction by choosing the Qualified Applicant with the lowest Offer Price.
Structure of support
The ORESS Tonn Nua Support, not including Unrealised Available Energy Compensation and Grid Delay Compensation, is structured as a 2-way Floating Feed In Premium (FIP).
Delivery Longstop Date
The Delivery Longstop Date has been set as 1 January 2037, however, additional scope for delay has been provided for in the context of potential grid delay events.
Support
Like ORESS 1, support under ORESS Tonn Nua means an entitlement to receive Support Payments and an obligation to pay Difference Payments, as may be adjusted to account for capacity market revenues and an entitlement to receive Unrealised Available Energy. ORESS Tonn Nua Support also means an entitlement to receive Grid Delay Compensation in accordance with, and subject to, the Project Delivery Agreement. The term Project Delivery Agreement replaces what was called the “Implementation Agreement” under ORESS 1.
Preparation of a Maritime Area Consent (MAC) application
Each applicant must complete a MAC application for its proposed project and keep it ready for submission to the Maritime Regulatory Authority (MARA) if the Applicant is declared the provisional winner of the ORESS Tonn Nua Auction. Under ORESS 1, the Application for Qualification was required to contain evidence of the MAC for the ORESS 1 project concerned.
WIP Survey Contract
A WIP Survey Contract is an agreement entered into between the Minister and a service provider which sets out the conditions for the generation, procurement, acquisition or analysis of survey data. The WIP Survey Contract in the context of ORESS Tonn Nua will be contained in the Auction Information Pack. If no WIP Survey Contract is contained in the Auction Information Pack, then the provisions of the Tonn Nua ORESS Terms and Conditions which relate to the WIP Survey Contract will not apply. The Generator is required to execute a novation deed between the Generator, the Minister and the service provider regarding the WIP Survey Contract to replace the Minister as a party to the WIP Survey Contract and to pay the Surveying Fee to the Minister. Neither of these elements were features of ORESS 1.
Withdrawal
The Generator will be entitled to withdraw, in accordance with the Tonn Nua ORESS Terms and Conditions, the project from ORESS Tonn Nua only in the case of:
- A Planning Consent Failure Withdrawal
- An Unsuitable Site Conditions Withdrawal, or
- An Onerous Planning Condition Event Withdrawal
An Unsuitable Site Conditions Withdrawal Notification must be accompanied by a detailed analysis from a minimum of two independent third parties with sufficient industry knowledge and experience. The notification must provide evidence of the existence of Unsuitable Site Conditions. It must also include reasonable supporting documentation and data relating to the Unsuitable Site Conditions identified.
Conclusion
The publication of the much-anticipated ORESS Tonn Nua Terms and Conditions represents a key milestone for Ireland’s delivery of offshore renewable energy. Developers, investors and funders interested in participating in the Tonn Nua Auction should carefully consider these terms and conditions. In particular, they should note the current projected timeline of the qualification phase in Q1 2025, with the bidding phase to take place in Q2 2025.
For more information and expert guidance, contact a member of our Energy team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.
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