Irish energy developers and investors must review ORESS Tonn Nua terms

Garrett Monaghan and Shani Stallard, renewable energy experts at Pinsent Masons, were commenting following the Irish government’s updated terms and conditions for the ORESS Tonn Nua (New Wave) offshore wind auction.

Monaghan said: “Renewable energy developers, infrastructure investors, legal and planning advisors, and other stakeholders across Ireland’s offshore wind and energy transition sectors should prepare their applications and project documentation in line with the new framework.”

This update sets the framework for Ireland’s second offshore wind auction under the ORESS, targeting a 900 megawatt (MW) project off the south coast. The auction supports Ireland’s climate action plan target of 5 gigawatts of offshore wind by 2030.

The auction will operate under a two-way contract for difference mechanism, similar to ORESS 1 and other RESS auctions, which provides price stability for developers while protecting consumers from overpayment. Under this mechanism, if the market price falls below the strike price, the government pays the difference to the generator. On the other hand, if the market price rises above, the generator pays the difference back. “The support duration is set at 20 years, offering long-term certainty for investors and developers”, said Monaghan.

ORESS Tonn Nua introduces significant regulatory, legal, and financial changes compared to ORESS 1, including a new plan-led development model, updated consent procedures, enhanced withdrawal and compensation mechanisms, and a single-winner auction structure.

Stallard said: “Understanding these changes is important for stakeholders preparing to participate in the auction or advising clients on project eligibility, risk, and compliance.”

The project is expected to deliver substantial environmental benefits, including an estimated annual reduction of 1.87 million tonnes of CO2 emissions. The auction process is divided into two phases: a qualification phase anticipated in the third quarter of the year, followed by a bidding phase in the fourth quarter.

Speaking at the Wind Energy Ireland Offshore Wind Conference, minister Darragh O’Brien reaffirmed the government’s commitment to grid readiness. The minister highlighting the €4 billion investment in the onshore grid over the past five years in addition to €88.5 million from the Ireland Strategic Investment Fund was committed last year to enhance infrastructure at the Port of Cork “ensuring it can support the assembly and deployment of offshore wind projects”.

He also announced the procurement of extensive geotechnical data for the Tonn Nua site, which will be shared with developers to help de-risk the project. This is part of a broader strategy to ensure a consistent pipeline of projects and to build a robust indigenous supply chain.

The updated terms follow a year-long consultation process, including two public consultations and technical workshops with industry, environmental groups, and local communities.