Energy parks tipped to emerge in Ireland

Out-Law News | 02 Jul 2021 | 10:50 am | 4 min. read

A series of new energy parks are likely to be developed in Ireland as part of the country’s move towards lowering its carbon emissions, a Dublin-based expert in energy sector M&A has said.

Oisín McLoughlin of Pinsent Masons, the law firm behind Out-Law, said the energy parks could become homes for new data centres, given recent plans outlined by the Commission for Regulation of Utilities (CRU) to address the risk data centres present to the security of electricity supply in Ireland.

McLoughlin said: “Energy parks are projects that combine renewable energy generation, such as offshore wind farms, with hydrogen production and energy storage technologies. They can serve as hubs for businesses in the energy supply chain and a location for linking up heavy users of energy with on-site power.”

“It is easy to imagine that data centre operators will be examining the potential of energy parks to meet their needs. In its recent paper, the CRU suggested that one of the things data centres may need to do to gain connection to Ireland’s electricity grid is generate enough energy onsite themselves to support their demand for electricity,” he said.

Where Ireland sources its energy from will change in the years ahead. Ireland has committed to achieving ‘net zero’ emissions in its economy by 2050, and the government has pledged to source at least 70% of Ireland's electricity supply from renewables by 2030. As part of this transition, some carbon intensive power plants are being wound down and decommissioned.

McLoughlin Oisn

Oisín McLoughlin

Partner

In its recent paper, the CRU suggested that one of the things data centres may need to do to gain connection to Ireland’s electricity grid is generate enough energy onsite themselves to support their demand for electricity.

In April, the Electricity Supply Board (ESB) in Ireland announced plans to transform its existing Moneypoint site in County Clare “into a green energy hub, helping Ireland to become a leader in green energy production”.

Situated at the hub will be a new floating offshore wind farm along with a new sustainable support system which will allow higher volumes of renewables to be connected to the electricity grid. In addition, ESB said it expects the hub to “become a centre for the construction and assembly of floating wind turbines” and that, towards the end of the decade, it is hoped a new green hydrogen production, storage and generation facility will also be situated on the site.

New Fortress Energy, a US equity fund, will shortly make a new application for planning permission for the first phase of its planned Shannon Technology and Energy Park in County Kerry, according to press reports. The site incorporates a 600MW gas-powered plant with a 120MW battery storage facility, a liquefied natural gas terminal and a data centre ‘campus’, which could accommodate eight new data centres.

Amazon has also recently been given the go-ahead by Meath County Council for a second data centre at the IDA Business Park in Drogheda. Development of the company’s first data centre at the site is already underway, and work on the second will begin in 2023 with a view to completing the project by 2026, according to the Irish Independent.

The Irish Offshore Operators’ Association (IOOA) recently set out proposals for two other energy parks – one where the Corrib gas field is currently, and a second situated in the vicinity of Cork.

With its proposals the IOOA recognised the “intermittent” nature of energy from renewable sources such as solar and wind and acknowledged that natural gas would continue to be a valuable source of energy throughout the decarbonisation transition.

Its plans for the Corrib Critical Infrastructure Hub would involve the continued extraction of natural gas from existing gas fields as well as the discovery and extraction of natural gas from other gas fields still to be explored. This, it said, would build on the existing infrastructure that has been invested in at the site and reduce Ireland’s need to import natural gas from elsewhere in the world. It also said there is potential for the gas discovered at the site to be a source of ‘blue’ hydrogen, which it said would deliver “a smaller carbon footprint than European or other gas sources”.

At the Cork Net Zero Emissions Hub, the IOOA envisages the use of carbon, capture, utilisation and sequestration (CCUS) technology to safely store carbon emitted by industrial energy users in the local area. A new offshore wind farm and hydrogen production facility would also be developed at the hub, according to the proposals.

“The CO2 emissions from the oil and gas usage in the industrial base in the Cork region have the potential to be captured and safely sequestered in the reservoir rocks of the nearby depleted offshore Kinsale Head gas field, that is currently being decommissioned,” the IOOA said. “Additionally, a ‘blue’ hydrogen industry, using natural gas as a feedstock, could be developed with CO2 captured and sequestered in the offshore reservoirs. Furthermore, the Celtic Sea region offshore Cork has the potential for the development of offshore wind generation, with the Emerald project proposing to install a floating wind farm in the Celtic Sea, in the vicinity of the Kinsale Head gas fields… Excess wind energy generated could be used in the electrolytic production of green hydrogen as an alternative to ‘blue’ hydrogen production as the developing technology develops in the coming decades.”

Oisín McLoughlin said: “Given the number of data centre projects either already underway across Ireland or in the pipeline, with many set to be located in energy parks, the government must act on developing a regulatory framework for private network and direct line arrangements sooner rather than later”.

The government committed as part of its 2019 Climate Action Plan to investigate policy options for facilitating private energy networks, including a regulatory framework and market rules. The term refers to where power is sold directly from a generator’s facility co-located or in the vicinity of an energy user, rather than having to rely on the national grid.