Offshore wind in Ireland: ORESS Tonn Nua scheme launches, with differences for developers

On 27 May, the Irish government published version 1.1 of the terms and conditions for the ORESS Tonn Nua (New Wave) offshore wind auction. This update sets out the framework for Ireland’s second offshore wind auction under the ORESS, following ORESS 1 finalised by the Department of the Environment, Climate and Communications (DECC) in 2022.

Following the update (157 pages/1 MB), ORESS Tonn Nua stipulates notable and significant minimum project delivery experience criteria. It is crucial that developers, investors and stakeholders appreciate the criteria when preparing to participate in the auction and, where relevant, material differences between the new scheme and ORESS 1.

Declaration of experience

New to ORESS Tonn Nua is the requirement for the director of the applicant to provide a declaration of experience confirming the applicant has both project experience and delivery team experience.

This declaration must set out that the applicant, or one of more of its related companies, has the relevant experience in relation to projects of a similar scale and nature to the proposed Tonn Nua project. This applies to the development, construction, operation and maintenance stages of the project.

The required minimum project experience is:

Development (design and consenting) stage 

• at least 12 months continuous experience in the development (design and consenting) stage for an offshore wind farm of greater than or equal to 200 megawatts (MW) capacity – the development stage ends when development permission or planning permission is granted 

• this experience must be within the 10 years immediately preceding the application to ORESS Tonn Nua. 

Construction stage 

• at least 12 months continuous experience at the construction stage for an offshore wind farm of greater than or equal to 200MW capacity – the construction stage ends on the first generation of all or part of the offshore windfarm

• this experience must be within the 10 years immediately preceding the application to ORESS Tonn Nua. 

Operation and maintenance stage  

• at least 12 months continuous experience at the operation and maintenance stage for an offshore wind farm of greater than or equal to 200MW capacity – the operational stage begins at point of first generation of all or part of the offshore windfarm and ends at date of commencement of decommissioning of the offshore windfarm

• this experience must be within the 10 years immediately preceding the date of submission of the application for qualification.

Project delivery team experience

The applicant, or one or more of its related companies, must have the necessary resources to ensure the successful delivery of the ORESS Tonn Nua Project. This experience must include a senior member of the project team having:

• at least 10 years’ experience with similarly sized marine projects at the development and construction stages
• at least 10 years’ experience with other projects of a similar scale and nature, which can include onshore projects, at the development and construction stages
• at least 10 years’ renewable energy development experience; and
• at least 10 years’ experience of the Irish planning permission system delivering projects of a similar scale and nature, including onshore projects.

Maritime Area Planning Act and maritime area consent

Unlike ORESS 1, ORESS Tonn Nua explicitly integrates the Maritime Area Planning Act 2021, which provides the legal and administrative underpinning for a new planning regime in the maritime area to facilitate the development of offshore energy. The Maritime Area Regulatory Authority (MARA) is the state agency established under the Maritime Area Planning Act and is responsible for granting maritime area consents (MACs) and for compliance with and enforcement of MACs.  

Under ORESS 1, the applicant needed to have the MAC before applying for ORESS 1. However, under Tonn Nua, each applicant must complete an application for a MAC in respect of its proposed project and hold this application ready for submission to MARA. 

Instead of providing evidence of the MAC in its application, a director’s declaration of MAC eligibility will be required as part of the Tonn Nua application. This declaration must confirm that the director has examined the MAC guidance, has prepared a MAC application for MARA in line with the MAC guidance, and reasonably believes that the applicant satisfies the MAC guidance criteria for award of a MAC for the project. 

Designated maritime area plan

This auction is the first to be held within a designated maritime area plan (DMAP), reflecting a more structured, plan-led approach to offshore renewable development. The term DMAP is defined in the ORESS Tonn Nua terms and conditions as “a specifically selected portion of the maritime area designed for a particular use”. 

The DMAP is a central concept introduced under the Maritime Area Planning Act providing the spatial planning framework for offshore renewable energy development in Ireland.

In the context of ORESS Tonn Nua, projects must be located within a DMAP. The project development area must also align with the relevant DMAP, and the MAC application must be consistent with the DMAP boundaries and objectives.

Annex D of the ORESS Tonn Nua terms and conditions specifies the coordinates of the offshore site, which must fall within the designated DMAP.

Single-winner model

The ORESS Tonn Nua auction adopts a ‘single-winner’ model, which is a significant departure from the multi-winner structure used in ORESS 1. 

Under clause 9.1.3 “the minister shall determine the winner of the ORESS Tonn Nua Auction by selecting the qualified applicant with the lowest offer price”.  If any tied offer prices are identified, the offers will be resolved by way of a tie-break – which will be resolved using a random index number.

ORESS Tonn Nua is explicitly structured to award support to only one project, based solely on price competitiveness.

Strike price calculation, bid bonds, Performance Security and withdrawals

The strike price has a different calculation mechanism than under ORESS 1, including the use of a grid costs adjustment amount. The grid costs adjustment will be calculated annually.

The bid bond amount for this auction also differs from ORESS 1, and is set at €20 million. For ORESS 1, the bid bond amount depended on the size of the project, set at €6 per megawatt hour (MWh), where the MWh value is the deemed energy quantity for one year for the ORESS 1 project, multiplied by 1,000.

The performance security for the Tonn Nua auction is also different than that for ORESS 1. For ORESS 1 the performance security depended on the size of the project, set at €20 per megawatt hour (MWh), where the MWh value is the deemed energy quantity for one year for the ORESS 1 project, multiplied by 1,000. Now, the performance security amount during the Tonn Nua auction depends on the period of time in question, and will be calculated as follows: €80,000,000, during the performance security first period; €100,000,000, during the performance security second period; and €120,000,000 during the performance security third period.

There are also new withdrawal provisions set out in the ORESS Tonn Nua terms and conditions for an applicant which is successful in the Tonn Nua auction but subsequently needs to withdraw the project. While these are similar to ORESS 1 in structure, they are different in detail and in scope. Under ORESS 1, withdrawal provisions were relatively narrow and primarily centred around the concept of planning consent failure withdrawal. However, ORESS Tonn Nua introduces two additional grounds: unsuitable site conditions withdrawal; and onerous planning condition event withdrawal.

Community benefit fund and grid delay compensation

The community benefit fund (CBF) under ORESS 1 and ORESS Tonn Nua is a central mechanism to ensure that local communities benefit directly from offshore renewable energy projects.

ORESS Tonn Nua introduces some enhancements to the CBF, including an expanded contribution base to include unrealised available energy and grid-delayed quantity. 

ORESS Tonn Nua introduces a new, specific mechanism for grid delay compensation, which provides financial support if grid connection is delayed beyond the target delivery date. This is a significant risk mitigation feature for developers and reflects lessons learned from earlier auctions.

Judicial review

ORESS Tonn Nua introduces a more detailed framework for handling legal challenges. It also distinguishes between third party and application initiated judicial review related to planning or maritime area consent decision.

These provisions clarity how such challenges affect project timelines and eligibility, and employer the minister to revoke or re-run the auction if the project is invalidated by a court decision. This adds to legal clarity and risk management, not present in the first auction.

Co-written by Shani Stallard and Helen Sparrow of Pinsent Masons.