Joint Committee on Enterprise, Trade and Employment díospóireacht -
Wednesday, 17 Apr 2024

Offshore Wind Energy Strategy: Department of Enterprise, Trade and Employment

An Cathaoirleach

Today we will discuss the departmental report Powering Prosperity - Ireland's Offshore Wind Industrial Strategy. The development of Ireland's offshore renewable energy sector presents many opportunities and challenges. It is, therefore, very important and welcome that the Department of Enterprise, Trade and Employment has prepared a comprehensive strategy to guide the development in this area in a way that aims to meet our ambitious climate and economic aspirations. The committee considers the future of offshore energy generation as a key priority of its work programme and is pleased to have the opportunity to discuss these matters further with the following representatives from the Department of Enterprise, Trade and Employment: Mr. Gary Tobin, assistant secretary, and Mr. Jack McDermot, assistant principal officer.

Before we start I wish to explain some limitations to parliamentary privilege and the practices of the Houses as regards the references witnesses make to other persons in their evidence. The evidence of witnesses physically present or who give evidence from within the parliamentary precincts is protected pursuant to both the Constitution and statute by absolute privilege. Witnesses are again reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative they comply with any such direction I may give.

The opening statements have been circulated to members. To commence our consideration of this matter I now invite Mr. Tobin to make his opening remarks on behalf of the Department.

Mr. Gary Tobin

I thank the Cathaoirleach and the committee for inviting us here today. We are aware the committee is very interested in this policy area and we note the recent report from the committee on offshore renewable energy.

We welcome the opportunity to discuss with the committee today Powering Prosperity – Ireland’s Offshore Wind Industrial Strategy. I am joined today by my colleague Mr. Jack McDermot from the offshore wind strategy unit in the Department of Enterprise, Trade and Employment.

The committee will be aware that the programme for Government and the White Paper on enterprise both have a focus on the twin green and digital transition. The White Paper also identifies offshore wind as a key opportunity for Ireland. To build on this, a memo for Government proposing the development of an industrial strategy for offshore wind was brought forward on 9 May 2023 and the powering prosperity strategy has been developed in line with that Government decision.

Within weeks of the Government's decision, the new offshore wind strategy unit was created in the Department of Enterprise, Trade and Employment and work commenced on the stakeholder engagement and fact-finding phase of the strategy, which concluded in November. Powering Prosperity was then approved by the Government on 5 March and published a little more than a month ago on 8 March.

In developing the strategy, we noted the committee's recent report on offshore renewable energy, which was also published in March, and specifically its recommendations regarding the supports that are needed for the offshore renewable energy industry, the opportunity for both fixed and floating wind, the development of an offshore wind delivery task force and a greater focus on domestic job growth. We believe that many of the recommendations in the committee's report are reflected in our strategy.

The vision at the core of Powering Prosperity is to build a successful, vibrant, impactful offshore wind industry and ensure the industry creates value for the people of Ireland by the end of this decade. We will target four core areas, namely: the supply chain - both domestic and international; research, development and innovation; balanced regional economic development; and future demand end uses.

Powering Prosperity also clearly sets out ten ambitions that Ireland will aim to achieve by 2030: first, to develop an innovative enterprise ecosystem with indigenous and multinational companies; to dramatically upscale the enterprise base that will serve as the offshore wind sector in Ireland and hopefully around the world; to deliver up to 5,000 jobs in the offshore wind industry; to maximise opportunities for companies and investors; to pro-actively assist enterprise workers and the research and development ecosystem; to seek to establish an offshore wind centre of excellence and a new floating offshore wind demonstrator in order to support growth and innovation; to pursue strategic partnerships with like-minded countries; to work with stakeholders to develop world-class property solutions powered by renewable energy; to develop major industrial hubs around key deployment, operations and maintenance ports in collaboration with other Departments; and finally, and perhaps most importantly, to transform Ireland's regional capability. These ambitions are supported by 40 actions, which are set out in the strategy and are to be delivered in 2024 and 2025.

In terms of how we produced the strategy, Powering Prosperity is the result of a strong consultation process between the Department, our enterprise agencies and stakeholders. Both agencies provided us with industry contacts who were extremely generous in their observations and technical input. We also collaborated intensively with other Departments and agencies, particularly via the offshore wind delivery task force, which was chaired by our colleagues in the Department of energy. Indeed, the actions of Powering Prosperity effectively function as the actions for workstream 7 of the offshore wind delivery task force.

We would like to put on the record our thanks to our colleagues and stakeholders who assisted us in developing the strategy. Overall, the reception of the strategy has been positive. For example, Wind Energy Ireland warmly welcomed it and committed to working with us to ensure the benefits from our offshore wind revolution. We will now turn to the implementation of the strategy with an ambitious programme of work already under way for 2024 and 2025. Our Department and its agencies will continue to collaborate with our colleagues across Government, with industry and with other national and international stakeholders. We will drive implementation by reporting to the offshore wind delivery task force and working closely with our own Department’s offshore wind industry forum, and of course, the enterprise agencies. We will publish regular reports on the progress of the strategy.

We look forward to assisting the committee with its deliberations. We are happy to take questions.

An Cathaoirleach

I will now invite members to discuss the issues with the representatives who are present. I ask them to indicate if they want to take part. There is a rota in place. The first member is Deputy O’Reilly from the Sinn Féin slot. The Deputy has 14 minutes.

Deputy Louise O'Reilly

I thank our guests for the information they have given to us. I have a couple of questions, one of which is about the aim to proactively assist enterprise workers and the research, development and innovation ecosystem to avail of the opportunity through targeted funding and supports. The report states that increased investment in research, development and innovation would speed up the deployment of Irish offshore wind projects. Can the witnesses provide some information on how this will be achieved? We are unfortunately lagging behind our EU peers in the context of investment in research and development. We are 27th in the in EU in terms of spending on research and development. This is because we spend less than 1% of our GDP and the EU target is 3%. According to the European innovation scoreboard, we are lagging behind leaders in innovation such as Belgium, Denmark, Finland, the Netherlands and Sweden. Similar performance can be observed in the global innovation index, GII, where our position has drifted to 22nd. Are the representatives convinced that the necessary investment will be forthcoming in the research, development and innovation space?

Mr. Gary Tobin

I thank the Deputy very much for the question. It is interesting that she mentioned the GII. Our colleagues in the National Competitiveness and Productivity Council have recently published a paper on the GII. The paper was only published in the past two weeks. It attempts to swap out GDP for GNI*. This committee will be very familiar with all the issues with GDP as a measurement tool in Ireland. The National Competitiveness and Productivity Council put the GNI* measure in place. It recalculated the GII to measure innovation across European countries. When it did that, Ireland moved from 22nd place to 12th. While 12th is a lot better than 22nd, I appreciate that it is still not first. We still have important work to do in that regard.

On research and development, we can see there is a significant opportunity for Ireland, using its excellent academic sector and expertise in the technology space, to harness some of these positive aspects of the economy in Ireland and try to pivot them towards research and development. We will work closely with the enterprise agencies, particularly Enterprise Ireland, but also Science Foundation Ireland, SFI, the Sustainable Energy Authority of Ireland, SEAI, and the Marine Institute. All these institutions offer an extensive range of programmes and support to promote investment in research, development and innovation, but this sector-----

Deputy Louise O'Reilly

My question was more about whether the officials are convinced that that investment is going to come. I ask this because it will need a significant investment from the State. It is not just going to happen. We can use any measurements we like, but we are not in the top ten when using any of the measurements Mr. Tobin has mentioned. He said that increased investment in research, development and innovation would speed up the deployment of Irish offshore wind projects, and of course it would, but I am asking about where this will come from. Does he think that investment will come solely from the State? Will it come from the State and industry? Is he convinced that there is a pipeline of investment in place to allow us to capitalise on it and ensure that increased investment will come in order to speed up the deployment of Irish offshore wind projects? We are not exactly breaking any records in the delivery of that area.

Mr. Gary Tobin

All the points the Deputy made are very fair. For example, as part of the strategy this year, we will commence an annual programme of events to showcase offshore wind in order to encourage more investment in research, development and innovation within the industry. We are engaging with the various research organisations in Ireland for which this is a relatively new sector. It is probably not one that they are as familiar with as, for example, biopharma or semiconductors.

What we are seeing is a great deal of very positive interest from some of the research stakeholders to get involved. Part of this whole strategy is to try to nudge different areas of Government and industry to focus more on this sector.

Deputy Louise O'Reilly

In terms of the development of the enterprise ecosystem - and we want to want to become part of the global supply chain for international projects - to what extent does Mr. Tobin think manufacturing will have a role to play? We know that research, development and innovation in technology will to be essential, and we have to develop and invest in that area. In terms of manufacturing, the committee visited Belfast Port, which is the only port capable of facilitating the construction of offshore wind farms. If we had access to a time machine, we could possibly go back and start this a long time ago. If we do not get our ports ready now, does Mr. Tobin think that we could lose the jobs and the supply chain business and that the multibillion euro projects could go to other states? How quickly does he think we could ready our ports for those offshore operations and maintenance such that they can become industrial hubs and part of clusters to assist microbusinesses, SMEs and family businesses in coming together? What is the timeline for us in that regard? Does Mr. Tobin see manufacturing as not being that important or that it could be done elsewhere? Does he see it happening on this island? Obviously, it is only happening in one place at the moment, which is the issue.

Mr. Gary Tobin

Again, there are significant opportunities across both services and the manufacturing industries for development in regard to offshore wind. What has certainly struck us is that when we look at jurisdictions like Scotland and those in northern Europe, there is no shortage of demand for ports and manufacturing facilities that can facilitate the development of this sector. Our colleagues in the Department of Transport are currently overseeing a review of Irish ports’ offshore and renewable energy business cases. They have signed an advisory agreement with the European Investment Bank to undertake an analysis of demand capacity and financing options relating to Irish ports’ offshore renewable energy plans.

There is a great deal of work happening in respect of the various Irish ports. Different ports will probably end up specialising in different areas; some will probably focus on operations and maintenance and some may focus more on manufacturing. My colleague Mr. McDermot was in Killybegs last week meeting those involved in the industry there. Again, there are very positive attitudes on the part of the stakeholders in and around that area to get involved in this sector.

There are also opportunities in the context of the all-island economy. The Deputy is correct about Belfast Port. There are opportunities for companies in Northern Ireland to be engaged in the development of the offshore wind industry on the island of Ireland. We certainly will be talking to InterTradeIreland, which is another body under the aegis of our Department, to see how we can maximise the potential for the all-island economy.

One of the things that struck me and surprised me a little is that when we recently travelled to Scotland to talk to both the industry and the government stakeholders there, they very much are in the mindset of collaboration with us. There is so much opportunity here that it is not necessarily a case of that if Scotland wins, Ireland loses out. There is so much potential opportunity here that we can help the Scottish in terms of developing their industry and they can help us.

One of the actions in the strategy that we are going to be focused on in the initial few months is to visit Esbjerg Port in Denmark, which has transformed itself into a port very much focused on offshore renewable energy in terms of services but particularly in terms of manufacturing. They have created the cluster the Deputy talks about.

Deputy Louise O'Reilly

We can look abroad and find many examples. Mr. Tobin referred to the opportunity that exists here. That opportunity exists because of inaction. There are huge opportunities because we are so far behind. The extent to which we have slipped behind on this is worrying. When we look to Scotland, Sweden and other countries, we can see they are so far ahead that it makes you wonder what caused that. There is much chat from the Government on this matter but there really has not been much by way of action. We visited Belfast, which can do it - we know that is an established fact - and we know that Scotland can do it, but every time we seem to discuss this, it is all plans but no delivery, unfortunately.

I will move on because my time is short. I want to talk about the skill mix and the pipeline of talent that we need in order to develop this industry. The Department report on the strategy states:

Significant further work is required to identify the full range of skills and workforce requirements for the development of offshore wind, and to establish a sustainable workforce and skills pipeline.

Again, the report points up all of the ways in which the Government has let this issue drift, particularly if we are only at the stage whereby further work is required to identify the full range of skills. Can the Department give us an update on how that work is progressing? The report also states that up to 5,000 jobs can be created in the offshore wind sector by 2030. We do not have the skills currently and we would have to hope that through the third level sector and industry, we can build the domestic skills base. Will Mr. Tobin give us an update on that work, given it is another area where we are running to catch up with the rest of the world?

Mr. Gary Tobin

I will come back to the Deputy’s comment on Scotland and other countries. One thing I would say in regard to Scotland is that it is obviously in a very different place from Ireland in the sense that it is kind of repurposing what was a very significant oil and gas industry - a fossil fuel industry - and trying to reinvent it. The Scots are in quite a different space from us. I also think there can be advantages for a country like Ireland, which I would categorise as a fast follower. The Scots are ahead of us for sure, and they have had great success, but they have also made mistakes and they will be the first to admit that. There is much that we can learn from their experience.

Mr. McDermot and I were in Bilbao for the WindEurope conference two weeks ago. Some 14,000 people from all around Europe were there and we met all of the manufacturers and developers. What they were all saying to us is that if we look at every country in the world that is interested in this space, they have all made mistakes, they all have challenges and they all have problems. Certain countries have done certain things brilliantly well and they have done other things very badly.

Deputy Louise O'Reilly

I appreciate that, but doing either nothing or very little is also a mistake. We have to acknowledge that. I fully appreciate that we can be fast followers, we can look at mistakes that have been made and it may be a good strategy to sit back and watch others make mistakes, but, equally, it is a mistake for us not to have developed in this area.

With regard to the 5,000 jobs referred to in the report, we are putting ourselves at a competitive disadvantage even in the context of creating those jobs because there does not seem to be an identified pipeline of talent coming through, which is a concern I have. My time is up. I thank the witnesses.

Deputy David Stanton

I thank the witnesses for being here and I congratulate them on the report. I know it has only been published over the past number of weeks but I have gone through it and found it to be really comprehensive. Almost everything has been covered. The three pages of acronyms at the end of it shows how much detail it contains.

Chapter 8 mentions offshore wind energy, the demand an end users, the hydrogen strategy, large-scale energy users and data centres. A review of large-scale energy users is taking place at the moment. Will Mr. Tobin please elaborate on the point about demand? Where will this energy be used? If we do not use it here in Ireland, it will probably be exported. What are his thoughts on this?

Mr. Gary Tobin

I thank the Deputy for the very good question. Currently, Ireland uses approximately 6 GW of electricity at peak demand. As the committee will be aware, demand is growing rapidly. We foresee the potential for 12 GW to 15 GW, and even possibly 20 GW, to be needed in the medium term. The aim regarding offshore wind is to potentially develop up to 37 GW of renewable offshore wind energy by 2050. That is significantly potentially ahead of the existing demand we may require. Why are we doing that? The answer is that forecasts are all well and good, but we may be underestimating the volume of electricity we will to need.

We are also very aware that certain key sectors of primary importance to the economy, particularly in the tech sector, are highly electricity demand intensive. Let us consider artificial intelligence say, or the cloud. What is the cloud that everybody sends their data to? The cloud is essentially a data centre. At present, we have 70 to 80 data centres in Ireland and their size, energy use and the data they hold varies. This really is key infrastructure that lies behind all the digital aspects of social and work lives. Our ability to remote work, to do video calling, retail banking and, increasingly, public service delivery, including healthcare, is moving into the digital space and that will require more and more large-scale energy users in, for example, the data centre space. There are huge opportunities for Ireland in developing its digital economy. We are hearing increasingly from foreign direct investors that are thinking about next generation investment and that reliability and certainty around the supply of significant power will be absolutely key to their decision-making. For example, if Ireland has the ability, in the medium term, to generate significant offshore wind energy on the west coast where the wind is strong and consistent, the energy could be brought onshore. Ideally we might want to locate high-electricity-use energy parks close to where the power is coming onshore. It could be the west, south or north east coasts. There is very significant potential for significant regional economic development outside of the traditional Dublin zone. That could be very attractive to Irish companies that are large-scale energy users and also to foreign multinationals.

Deputy David Stanton

I agree that there is an amazing opportunity here. Is there an alignment between the strategy and the recent CRU public consultation on a connection policy for large-scale energy users? We need to get this policy right. Mr. Tobin said the intention is to have these energy parks on the west or south coasts close to where the power comes ashore. With the grid in the condition it is at present, what are his thoughts on that?

Mr. Gary Tobin

Again, this is an excellent question. We very much need to develop the capacity of the grid, without a shadow of a doubt. There are short-term and more medium-term challenges. Some large-scale energy users are exploring the potential for offshore wind energy themselves and having discussions with developers. Increasingly, large international companies are being asked by the customers to ensure that their activities are green on a 24-7 basis. Potentially, there are opportunities for offshore wind to be brought onshore and perhaps not even necessarily connected to the grid. Some of this activity could be off grid.

Deputy David Stanton

Is Mr. Tobin talking about private wires and direct lines?

Mr. Gary Tobin

Yes. This is also the case in relation to solar energy, not just wind. I am not an engineer, as the committee may have guessed. My understanding is that there may still be a requirement for some kind of grid connection, in extreme circumstances. However, by and large, these large-scale energy users may not really need to use the grid and could use private wires.

Deputy David Stanton

The report states that the vast majority of Ireland's exclusive economic zone, EEZ, is beyond the depth of fixed-bottom float and that floating is essential to achieve the targets.. Our understanding is that floating is a long way away and we are still waiting for it to be completed in the south. The technologies used for floating are different because it is further out and the conditions are more extreme. How developed are the technologies for floating to cope in the waters of the Celtic Sea and the Atlantic Ocean around our coast? There are some test sites in other parts of the world. How far away are we from getting that?

Mr. Gary Tobin

In looking at this sector, one of the things that struck me is how fast the technology is developing. The size of the fixed turbines being used is increasing. The Deputy will be aware that certain offshore wind parks were initially looking at using up to 300 turbines but because of developments in turbine design and increased turbine size, they may only have to use 80 turbines, so the sector is developing rapidly.

The general view is that floating wind technology does not currently exist at commercial scale. There are a lot of floating offshore wind projects globally but they all tend to be small demonstrator projects and if one adds together what they are producing then it is really very small. Currently, in global terms floating probably represents less than 1% of installed offshore wind capacity. In the Offshore Renewable Energy Support Scheme 1, ORESS 1, which is the most recent auction, all of the projects were fixed-bottom offshore wind projects. That said, what was also very clear to us in Bilbao and from discussions with industry generally is that they are very interested in floating because they kind of see that as the next step. I think there are opportunities for us to develop a significant demonstrator floating site. At the moment no one has really done that in the Atlantic, for example. No decisions have been made where one would do a floating demonstrator site but clearly there could be a lot of interest. Obviously this would all be dependent on analysis and ultimately Government decisions and so forth but it might be very interesting if there was a demonstrator off the west coast where one could see the Atlantic conditions and how that impacted.

Deputy David Stanton

Mr. Tobin has talked about the Atlantic green energy test site off Mayo as a possible base for a centre for a demonstrator site of scale. He also mentioned, quite interestingly, that by 2040 this whole sector will need 86,000 full-time additional employees, which is amazing, and these will be very highly-trained technical people which is really exciting. He talked about the hydrogen strategy and the use of offshore wind to generate hydrogen. The integrated energy parks were also mentioned. The report is so interesting and good that this committee could spend an entire day discussing it. I wish to ask about sustainable aviation fuels, which were also mentioned. The aviation sector has been criticised heavily for emissions. How far are we away from having sustainable aviation fuels?

Mr. Jack McDermot

I think we are a bit of a way off it obviously and I am not sure exactly how to quantify that in terms of years. I would like to point out the work done by the offshore wind delivery taskforce, which has ten workstreams now. Broadly, under the aegis of that workforce, there is a sustainable aviation fuels working group, which one of our colleagues in the offshore wind strategy unit of the Department of Enterprise, Trade and Employment, DETE, attends. The discussions at that working group are at fairly early stages. Obviously it is an area with huge potential so I would expect that over 2024 and 2025, in line with us working on our actions, there will be more tangible information and actions coming out of that working group as well.

Deputy David Stanton

My time is up so I wish our guests well with the strategy, which is really exciting. The strategy has recently been published and my only criticism is that the Department needs to publicise it more. The strategy contains such good and exciting stuff that I think a lot of our schools, colleges, industrialists, business people and ordinary citizens would be interested to see the thinking behind this and where it is going. The bottom line is the cost to the consumer. All of this will mean that the consumer will pay less for energy and, as somebody has said, we might eventually be a Saudi Arabia of wind energy eventually and maybe generate relatively cheap energy from wind, which does not cost anything except the technology to make it happen. I thank our guests for their responses.

Deputy Matt Shanahan

I thank our guests for coming in. I welcome the offshore wind strategy. It has been spoken about for quite some time and it is good to see that at least we now have a document to refer to. In terms of the wind delivery taskforce, can Mr. Tobin please highlight who are the main people involved?

Mr. Gary Tobin

Yes. As Mr. McDermot has mentioned, there is an offshore wind delivery taskforce and it has ten workstreams. As the Deputy asked specifically about the membership, the taskforce is chaired by the Department of the Environment, Climate and Communications and the Minister, Deputy Ryan, attends a lot of the meetings. Taskforce members are senior officials from Departments and agencies with key responsibilities. The member organisations are the Department of the Environment, Climate and Communications; the Department of Transport; the Commission for Regulation of Utilities; EirGrid; the Department of Public Expenditure and Reform; the Department of Further and Higher Education, Research, Innovation and Science; the Department of Housing, Local Government and Heritage; the Department of Rural and Community Development; the Sustainable Energy Authority of Ireland; ourselves in the Department of Enterprise, Trade and Employment; Enterprise Ireland; and the Marine Institute. That is it broadly. The taskforce meets approximately every eight weeks.

Standing under the taskforce there are ten workstreams which deal with marine planning; future framework; communications; auctions; grid development; and marine transport. Workstream 7 is the supply chain, which essentially is chaired by us. Our strategy is our response to the requirements of trying to develop the supply chain.

Deputy Matt Shanahan

Are the majority of the people involved in the workstreams public sector Government officials? How many people or players does the taskforce interact with from the private and renewable sectors?

Mr. Gary Tobin

In the offshore wind delivery taskforce they are, essentially, public sector. Obviously they continually engage with stakeholders. For example, in regard to our workstream 7, we have an industry forum that meets regularly with stakeholders to discuss issues as they arise. In terms of the development of our own strategy, we would have had a public consultation process. I think there were just under 50 submissions. We would have had regional seminars in Dublin, Rosslare, Cork and Shannon.

Deputy Matt Shanahan

Would Mr. Tobin be good enough to share with me who the people are in the private sector who are part of workstream 7?

Mr. Gary Tobin

Yes.

Deputy Matt Shanahan

One of the criticisms that I have heard is that there are people out there who are saying they are finding it very hard to get access to the Department and get any opportunity to talk about what they are doing.

Offshore wind has been talked about for a long time in this country. Going back decades the potential of wind energy has always been known. The question is how to commercialise it and maybe now we are getting closer to that. One of the things that I have a concern about, which I have raised in public before, and Mr. Tobin has mentioned ORESS himself, is the development off the south coast in terms of fixed-bottom wind. Mr. Tobin has highlighted the change that is coming. We are now talking about 350 m turbines with 100 m circumference blades but pylon depths of not beyond 60 m or 70 m and, therefore, that tells us that there will be something in order of a 280 m structure sitting up out of the water, which is a very large structure. I think that the new blades will probably give a 15 MW output, which I understand is larger than anything that is in Europe at the moment. I am concerned about the impacts on the likes of the copper coast off the south coast in Waterford. We have not seen the outline of the draft DMAP. Can Mr. Tobin instill confidence in me about this matter? I presume that he has some awareness of where the DMAP is and the potential planning arrangements being considered so that we will see fixed-pylon wind energy to the European standard of not less than 22 km offshore. Does Mr. Tobin think that is feasible within the DMAP being considered?

Mr. Gary Tobin

Yes. The Deputy specifically asked about the DMAP.

I am sure this committee is probably aware but phase 1 was a developer-led approach, which was ORESS 1. Phase 2 is what Deputy Shanahan is talking about, which is essentially what is being called a plan-led approach. Our colleagues in the Department of energy are preparing the first designated maritime area plan, DMAP, for the south coast. It is due to be published this quarter, so before the summer. That is our understanding. As soon as it is published - and again, it will be our colleagues in the Department of energy who will do that - there will be six-week public consultation process once the DMAP comes out. That DMAP is looking at procuring up to 900 MW but there may be further auctions in that phase.

The Deputy raised a very good question around the size of the turbines. He is absolutely right. The turbines have been getting bigger. From talking to industry representatives and some of the manufacturers, I think the manufacturers themselves would welcome a European standard-sized turbine. We are probably getting to the point where there may be diminishing returns with regard to the turbines getting bigger and bigger. It might be easier and quicker for the development of the offshore wind industry in Europe if there was a standard-sized turbine. Then the manufacturers could just produce one type of turbine and so forth.

Deputy Matt Shanahan

I think the market might dictate a bit of that. I will not digress because my time is up, and I have two other things that I am surprised are not in the Department's strategy document. Mr. Tobin has mentioned private wire but I want to ask about the whole deployment and connection into the national grid. The second point is security issues, which really have to be thought about. How are we going to protect this asset in the future, considering what is happening? I am glad to see Mr. Tobin put in a figure of 5,000 jobs. I saw a political contribution recently where somebody was talking about 50,000 jobs here in the next couple of years from offshore wind but 5,000 will be reached based on what we have seen with regard to deployment elsewhere. My time is up. I thank Mr. Tobin, and if he could share with me the names in that particular case I would appreciate it.

Mr. Gary Tobin

Yes, I am happy to. Again, they are all very good points. Regarding private wires, that is a policy matter for our colleagues in the Department of energy. I know that they are working on it, and they hope to come forward with a policy statement on private wires. In fairness to them, their priority until now has been to get this auction process moving. What we are hearing from both Irish and international industry is that they want these auctions happening, and they want to see progress. That is the most important thing. Definitely, I think private wire is one of the next steps.

With regard to security issues, again, that is kind of outside our remit but clearly critical infrastructure in the world we live in now in Europe will have to be protected.

Deputy Richard Bruton

I welcome this framework. It is an important document, and it is important that we start to create a consistent approach. I would be interested to get a few benchmarks as to where we are at. We have had a number of approved offshore energy projects. What is Mr. Tobin's estimate of the likely Irish content in the supply chain in that first wave, and what is the Department's target for an Irish supply content? Could Mr. Tobin give us a breakdown of what the areas will be where we plan to grow or impact in the supply chain? There are lots of different elements, from fitting and maintenance to consultancy and design. Where does Mr. Tobin see the big wins, and could he quantify them in terms of employment or cash? It would be very useful to get an understanding.

Second, with regard to the clusters that the Department plans, has it been able to identify at this point the number of clusters? Will we have a cluster for the south for the first DMAP that comes in? Does the Department have a port in mind? Are these clusters going to be built around ports? Where is the pre-planning for that first DMAP, which will presumably be succeeded by the other DMAPs? I think it is really important that if we are going to go down this route, we have our ducks in a line.

Going to the issue of optimal use and what Deputy Stanton was talking about, Mr. Tobin said that reliability of power in the medium to long term is critical to long-term decisions by the FDI sector, which has a huge stake in cloud-based investments. What is the impact of the de facto moratorium in Dublin on that at present? I get the impression that there is continuing unease out there that we have not yet got CRU, Eirgrid and the Department - those pieces - aligned. I recognise there is a balance. We have to maintain security of supply but we also need to give a line of sight. Do we have that line of sight for the Department's very substantial number of companies - mainly IDA but not exclusively - that are the key investors we need to sustain if we want to have what I presume is the optimal use? It is better to use this huge power potential domestically than sending it out on an interconnector, or putting it in to hydrogen or some of these other secondary uses. That is a real concern.

Given the Department's projection of domestic demand and the roll-out of offshore renewables and others, at what point will we be moving into a significant export potential? When will domestic demand be sort of satiated by our investment plan? Will that be in 2030? Will it be sooner or later? Again, looking at the downstream, the hydrogens and so on, this seems to be a fairly crucial issue.

Mr. Gary Tobin

I thank the Deputy. I cannot say he has saved the easy questions for last. These are all interesting and challenging questions. I am going to start with the clustering question if that is okay, and my colleague, Jack, might take the supply chain one. Then, I will be happy to talk about FDI and export potential.

With regard to clustering, we commissioned Grant Thornton to undertake research to develop an evidence base to support the development of a national clustering policy. We published a report on that in 2023. That was beyond the scope of offshore wind and is across all sectors of the Irish economy. That report found that there was significant merit in establishing an open and multilayered cluster programme. It defined clusters as "geographic interactive alliances of interconnected enterprises, research centres and associated institutions in particular fields". The proposed approach for the national clustering programme, in line with the Grant Thornton recommendations, is to adopt this kind of multilayered programme with different levels of funding available to each layer.

Clusters tend to be industry-led. It is not necessarily for us to say that we want a cluster in X location. Industry really has to come forward and say-----

Deputy Richard Bruton

Is that true if we are going for a planned approach, which means moving away from the developer-led approach? We are saying a State asset will be created.

Mr. Gary Tobin

That is a fair point. Enterprise Ireland has developed the Gael Offshore Network, which is a supply chain for the offshore wind industry. That network comprises more than 100 companies in the offshore wind sector. We think there is significant potential for an offshore wind national cluster. We plan to develop an offshore wind centre of excellence. That is contained in the strategy. One of the potential focuses of that centre of excellence would be to develop a national cluster around offshore wind. There could be, for example, cluster managers who would work to build a collaborative network of companies in the offshore wind space. We are preparing a scoping study around the potential for the centre of excellence and what it might focus on.

Deputy Richard Bruton

So it is not going to be a physical thing. I thought it was about plentiful green energy. That would attract certain types of users. That is the nub of the hub. Mr. Tobin is saying it is more around skills.

Mr. Gary Tobin

It depends. Maybe this is my mistake. When we hear the word "cluster", we think of our national clustering programme, which is focused on bringing companies together to collaborate and expand. The Deputy is more talking about the energy parks and the idea we would bring energy onshore and it would be focused in a particular location. Is that right or am I misunderstanding?

Deputy Richard Bruton

Yes, that is what I had in mind. It was those clusters that would have renewables, activities hungry for green energy and everything associated with that. They could also be hubs for supply chain, if that suited, but I would have thought the magnet was the green energy.

Mr. Gary Tobin

Absolutely. That was me hearing the word "cluster" and thinking about the national clustering programme, so I apologise. On the green energy parks concept, we know there are large energy users who would be interested in the availability of large-scale green energy. The Deputy is right that clusters of similar companies could be developed in a particular geographical location. That is being actively examined at the moment.

Deputy Richard Bruton

Is that for the DMAP that is coming out in June?

Mr. Gary Tobin

The DMAP is about where offshore windfarms may be located. The green energy parks concept would be about where on land we want to bring the power to in order to focus on the development of large-scale, energy-intensive industry. Again, apologies if I misunderstood the question.

I will speak to export potential quickly and then hand over to Mr. McDermot on supply chain. This may be a personal view but I would not hugely emphasise the issue of exporting power. We should be trying to maximise the added value we can get from this power in Ireland.

Deputy Richard Bruton

By "export", I mean moving to hydrogen or other alternative uses as opposed to feeding our domestic need. Maybe "export" is not the------

Mr. Gary Tobin

There is a series of steps in this. We need offshore renewable energy to feed existing demand and planned demand. Then there is the potential for excess supply. One route is to use excess supply to attract-----

Deputy Richard Bruton

My question concerns the date at which we might have that excess supply. Is it near term, long term or-----

Mr. Jack McDermot

By 2030 if we have 5 GW of power from offshore wind, it will be in line with targets. Today grid demand is between 6 GW and 7 GW but by the time we electrify the grid, move all the electric cars onto it and so on, we think we need about 10 GW to 12 GW. We are a good bit of the way there. By 2040, we should have 20 GW from offshore wind, roughly double what we need for the grid, heat pumps, electric cars and so on. By 2050, if we have 37 GW and allow for a bit of stretching in what the grid needs to, say,15 GW, then the difference between 15 GW and 37 GW is what we would have to play with for export or for adding value through new industrial opportunities in Ireland.

Deputy Richard Bruton

It is not 2030; it will be heading towards 2040 when we might be looking at hydrogen or other uses.

Mr. Gary Tobin

It depends on how fast these sectors develop. The technology in the sectors is developing quite rapidly. It is difficult to accurately forecast demand usage. Two years ago, AI did not exist so the potential level of energy usage AI may demand could completely change all our forecasts for energy usage. There is significant potential for additional supply that can be utilised to attract FDI to regional locations in Ireland.

The Deputy also asked about the supply chain.

Mr. Jack McDermot

On the local content percentage, we looked at that and took advice from Enterprise Ireland and IDA Ireland. We also studied Taiwan as a case study early in the development of the strategy. All that advice and research pointed to the idea that you should not slap a percentage on. Taiwan did it. Taiwan made a good start in offshore wind and enabling supply chain. Then they introduced a quite high percentage of local content required. I understand that is when their plans dipped a bit in velocity.

We would not plan to introduce a percentage but would more try to build up supply chain capability via Enterprise Ireland initiatives in, for example, operations and maintenance of offshore wind. I understand there is a lot of potential for tech expertise in Ireland to be grafted on to offshore wind, which would mean not necessarily having a boat with a crew going out to a turbine to maintain it. It might be possible to pre-empt some maintenance issues.

There is an opportunity for us to develop a supply chain in floating offshore wind. There are opportunities relating to the Internet of things, grid technology and every challenge around the grid. We see opportunities around cabling for supply chain for grid. More broadly, there is a long tail of supply chain opportunities that we call out in the strategy: surveying; controls and implementation; electrical engineering; marine and mechanical engineering; haulage and transportation on land and at sea; project management, which many Irish companies are already specialised in; repairs; insurance; and vessels.

When I was in Killybegs the other week, there was a huge pelagic fishing vessel operator there. It seemed to be open to the idea that while it uses big boats to fish today, it could operate large boats for the maintenance or construction of offshore wind facilities tomorrow. Another company, which specialises in building crew-transfer vessels – smaller types of vessels that could potentially be produced in large quantities – had already got its first manufactured crew-transfer vessel almost ready to be delivered to the customer. These are some examples of the sectors we would love to build up quite fast within the supply chain.

Mr. Gary Tobin

We also looked at what is happening in the US, particularly in California. The authorities there are examining offshore wind development and stipulating local requirements for staffing and companies. The advice we have received is that this in itself may inhibit the development of their offshore wind industry. They may even have a requirement that every single person who operates on a vessel to construct the turbines has to be an American citizen. Some of the local content requirements sound very attractive but when you look into them, you find there is excess demand for offshore wind and that countries all around the world are seeking to develop an offshore wind industry. Some of the big manufacturers of turbines can literally pick and choose the countries to focus on and in which to develop. Right now, they are interested in Ireland because it has a maritime sea area seven times the size of its land area and high wind speeds, but it would not take much in terms of policy missteps to say Ireland is too difficult and that they will go somewhere else.

Deputy Richard Bruton

Do the witnesses want to comment on the moratorium on data centres? Data and artificial intelligence are already dominant and will probably become even more so in enterprise development. Are we managing this adequately from an IDA Ireland perspective?

Mr. Gary Tobin

The Department of Enterprise, Trade and Employment believes data centres are key to ensuring Ireland remains a key European hub for ICT. Many people ask what is important about data centres but they are the anchor for many of the companies and their investments. However, we have to be careful about the speed at which we are connecting some of these very large energy users to our grid at a time when our grid needs investment. Ireland is not unique in this in that nearly every country in Europe is facing demand for significant grid investment. Some of the data centres use the same amount of electricity as a medium or large town, so we need to focus on data centres that create a positive economic impact, make efficient use of the electricity grid and ensure everything is done in a very planned way. As I understand it, a significant number of new data centres already have the necessary consent to attach to the grid. There is a challenge in the short to medium term regarding absolutely new data centres, but we are talking to and engaging with our colleagues in the Department of energy to try to square the circle in developing the grid and then connecting large energy users appropriately. In the short term, however, it will be a challenge. Approximately 18% of all electricity usage in Ireland is now due to data centres.

Deputy David Stanton

On the issue of perceived slowness, I have been speaking with some industry people who are interested in investing in Ireland, particularly in floating offshore facilities. They are concerned that the investment will go elsewhere, as Mr. Tobin has said. Anything we can do to push things forward and make them more attractive is important.

The Celtic interconnector is being constructed in my part of the country at the moment. It is a major project. I understand it is to bring power in from France but that it might end up exporting power, although the witnesses believe that may be at the end of the line and probably should be.

The Gael Offshore Network has been mentioned. It is quite a clever name in the area of wind energy, even though it is spelt as it is. There are 100 companies involved. Is there a list of those companies available in order that we can see who they are?

Mr. Gary Tobin

We could certainly ask Enterprise Ireland to supply it. This is very much its initiative, and it has been very successful. Sometimes people think we will have to build a supply chain but we already have many companies operating in this space. It is about connecting them together and looking at opportunities to help them to develop while also getting all the enterprise and support agencies to support them in this sector. It is a new sector and sometimes it takes the Government a little while to pivot. In fairness to Enterprise Ireland and IDA Ireland, they are now very focused on this sector.

Deputy David Stanton

On the matter of getting companies involved in the sector, Circular 05/2023, entitled Initiatives to Assist SMEs in Public Procurement, was recently published by the Department of Public Expenditure, National Development Plan Delivery and Reform. I have come across companies that say they find it very difficult to tender and that have missed out on opportunities. Perhaps there is a role for the Department of Enterprise, Trade and Employment in this area to further assist companies, particularly Irish ones, to ensure they do not miss out. I know of a case in which an Irish company was not able to tender for a large contract given by one of the State agencies. People are coming in from abroad to do the work here although the expertise exists here. I could probably talk to the witnesses offline about that at some stage if that would be useful.

Mr. Jack McDermot

Let me cover that very quickly. The memorandum of understanding between EirGrid and Enterprise Ireland is aimed at facilitating companies in the supply chain under the tent of Enterprise Ireland and the Gael Offshore Network. It is a matter of training through supplier workshops and being connected with opportunities that might be coming up because, as we know, EirGrid will have very considerable procurement needs related to offshore wind energy in the next few years. We really want to make that connection to drive those concerned a little closer together and ensure we can avail of these opportunities for Irish SMEs.

Deputy David Stanton

I would really welcome that because they need to be at the table anyway initially to compete. Which company wins a contract is another matter.

Mr. McDermot is right about the specialised ships required to build and service the infrastructure. I understand there is great demand for these kinds of vessels globally. We have got to be careful that we do not lose out and find we cannot get them. This is another area that Mr. McDermot has identified on which I very much agree.

In my area, we have the oil refinery. It is quite interested in renewables and in playing its part in converting to the green agenda with respect to many areas, including hydrogen. What is happening is very exciting. The Department should promote the work and let people know what is going on and the opportunities that exist. It is said that AI is the fourth industrial revolution, but this area is up there as well. It is all part of it.

An Cathaoirleach

That concludes our discussion. My own comment is on how important wind energy is, especially to the regions and to the county I come from, Limerick. Hopefully, Foynes will feature prominently in our future of becoming energy-secure around electricity. I thank Mr. Tobin and Mr. McDermot for assisting the committee in its consideration of this important matter.

I propose that we go into private session to consider other business. Is that agreed? Agreed.

The joint committee went into private session at 11.30 a.m. and adjourned at 11.36 a.m. until 9.30 a.m. on Wednesday, 24 April 2024.