The ESB and State forestry company Coillte have formally reached agreement on the establishment of a renewable energy joint venture.
However, completion of the deal is not expected until some time next year given that it requires final approval from the Government, the EU and the Competition and Consumer Protection Commission. The new operation will be run as an equally-owned joint venture and will initially focus on the construction of windfarms on Coillte-owned land around the country.
Some solar energy sites may be considered, but the bulk of the venture will focus on onshore wind energy.
The two parties had been in talks over a renewable energy partnership since the early part of this year and had originally aimed to finalise a deal by May.
While formal agreement is six months later than planned, the broad terms of the partnership are largely unchanged from what has previously been communicated by the companies. The overall plan is to generate around 1,000MW of renewable energy by 2020 . That is enough to power around 500,000 homes.
It is understood around 20 wind- farms will be built on Coillte’s nationwide landbank at a development cost of €1bn to €1.5bn. Construction is expected to begin in the early 2020s. Coillte sold the vast bulk of its windfarm assets to energy infrastructure company Greencoat Renewables for more than €280m last year.
However, rather than reflecting a retreat from the sector, Coillte viewed that sale as a mechanism by which to raise funds for a more concerted tilt at the renewable energy business.
Speaking earlier this year, a Coillte spokesperson said the energy output being planned by the potential joint venture with the ESB would be “a significant contribution to help Ireland’s energy transition”. Coillte has previously said it would explore a range of partnerships in relation to its future renewable energy ambitions. It has collaborated on a range of renewable energy projects with the ESB since 2003.
This joint venture is the latest in a rapidly increasing portfolio of renewable plans for the ESB. Earlier this year, it said it was working to develop a pipeline of projects that would enable it to generate at least 40% of its electricity from renewable, or zero-carbon sources by 2030.
It said at the time that storage, solar, onshore and offshore wind, waste energy, biomass and gas-fired plants were all included in its plans.
The ESB spent around €250m on renewable energy projects last year including starting development on two onshore windfarms here. In January, it said it would co-develop two planned offshore windfarms in the Irish Sea in conjunction with Belgian firm Parkwind. Last week, the ESB announced a partnership with Norwegian energy company Equinor to develop a number of large-scale offshore wind-farms by 2030.
The Government is targeting 70% of the country’s electricity generation coming from renewable energy sources, such as windfarms, by 2030. As part of that plan, it wants at least 3.5GW of offshore wind-generating power in place in the next 10 years.