1. East Coast Smart Green Growth Louth Economic Forum Conference Brian Britton Secretary NOW Ireland Thursday 9 th June 2011 Ireland’s Export Opportunity 1

2. Introduction Ireland has a number of opportunities from Offshore Wind –To meet and exceed our renewable energy targets –To export high value green electricity to europe –To create jobs building and operating Irish Offshore wind farms –To stimulate the €60bn Supply Chain Opportunity afforded by the development programmes for offshore wind in the Irish Sea and over €300bn in the rest of Europe 2

3. Ireland’s Offshore Wind Resource Ireland potentially has the best offshore wind resource in the world. Offshore offers the capacity and greatest potential for substantial increase in indigenous sources of all power generation thereby increasing “Security of Supply.” The only form of renewable energy which offers the scale to meet Irelands renewable energy targets. 2680 MW in planning, a further 4000 MW are feasible within Irish coastal waters Long term – Ireland can be an energy exporter Average Wind Speeds at 100m above Sea Level in European Waters Blue >10 m/sec, Red 8.5 – 10 m/sec, yellow 7.5 – 8.5 m/sec, Green 6.0 – 7.5 m/sec 3

4. NOW Ireland The National Offshore Wind Energy Association of Ireland was established in 2007 to promote the development of Ireland’s substantial offshore wind resource and to ensure that our island leads the way in building a sustainable, green economy. Set up by Ireland’s five largest operators Oriel Windfarm Limited SSE Renewables Codling Wind Park Saorgus Energy Limited Fuinneamh Sceirde Teo Capacity of over 2680MW from existing project areas with potential for a further 4000MW. Potential investment of over €8bn. This equates to 20,000 jobs for existing projects and over 50,000 jobs, if full potential were to be built out. Significant revenue could be obtained from exporting renewable energy, and even more from within supply chain. By 2030, more than 375,000 people will be employed in the EU wind energy sector – 160,000 onshore and 215,000 offshore. 4

6. Current Status of NOW Ireland Projects – A Case of Regulatory Disconnect  SSE Renewables Lease for 200 Turbines on the Arklow Bank  Codling Wind Park Lease for 220 Turbines on the Codling Bank plus extension application for a further 200 turbines  FSTApplication for 20 turbines on Skerd Rocks  Oriel Windfarm Application for 55 turbines East of Dundalk bay.  Saorgus energyApplication for 145 turbines on the Bray and Kish Banks Not in Gate 3 In Gate 3 6

7. The Most Pressing Reason for Renewables Ireland is the fourth most energy insecure country in Europe Corrib will help secure medium term security of supply but not price security Increase in price of oil and gas prices has a disproportionate impact on Irish GDP because of our circa 90% dependence on imported fossil fuels Ireland holds 11 days of gas supply, our resources come from the same source as the UK gas supply OFGEM Chief has recently described UK as heading off the edge of a cliff – Ireland is in the same position unless we develop a hedge 7

8. Renewable Energy Targets The Irish government has set a target of 40% renewables by 2020. Under the EU Renewable Energy Directive, Directive 2009/28/EC, Ireland has a Mandatory target of 16% of all energy consumption to come from Renewables by 2020. The NREAP submitted to the European Commission by Ireland states that to meet this target Ireland will need 42.3% RES-E. (currently 13%) 12% RES-H (currently 3.4%) 10% RES-T (currently 2.4%) Eirgird estimated in its 2009 Generation Adequacy Report that 4,632 MW would be needed to meet the 40% target, this has been reduced from the previous estimate of 5,800 MW due to demand reduction. DCENR estimate in the NREAP that to meet the 42.3% will require between 4,600 and 5,800 MW Ireland also stated in its NREAP that it is working towards creating the conditions to enable Ireland to become a significant exporter of Renewable Energy over the coming decades.

9. Status of Irish Wind Energy As of December 2010, 1,425 MW of Wind powered generation has been brought onto the system since the early 1990’s, with the development of about 100 wind farms and 30 extensions, in 23 counties. 115MW was brought onto the system last year and for the last 6 years the average has been 200MW per year. Many of the projects in the Gate 3 process for a grid connection will not be built, due to planning and financial constraints. The scale afforded by offshore wind power is needed to meet our renewable energy targets. 1873 MW or 48% of Gate 3 projects are in Natura 2000 sites and will have planning difficulties 2077 MW or 53% of Gate 3 have firm access dates post 2018 9

10. Employment and Export Potential Gate 3 Projects 795 MW 215 Turbines Cap Ex: € 2.4Bn 6000 * jobs Plus 2.5% of top line revenue Consented Projects Outside Gate 3 1885 MW 420 Turbines Cap Ex: ~ €5.6Bn 14,000 jobs Developing Irish Sea full potential 4000 MW 400 – 800 Turbines Cap Ex: ~ €12Bn 30,000 * jobs Plus 2.5% of top line revenue Revenue and Employment – Delivering the Green Economy Source EWEA 2007:15.1 Jobs created per MW Installed. NOW Conservatively use 50% of these estimates http://www.ewea.org/index.php?id=1638 10

11. Indecon Cost Benefit Analysis Independent study commissioned by NOW Ireland in March 2008 resulting in “Economic Analysis of the Potential for Offshore Wind Energy Generation in Ireland” published by Indecon in September 2008 Report Objective 1: Estimate net cost/benefit for enhanced offshore wind development in Ireland Report Objective 2: Estimate other benefits including Non-GHG emissions abatement, Kyoto compliance, tax and employment, fuel-price risk reduction, etc A Financial model based on a 1000MW wind farm for a 15 year period starting in 2012 was used. Conservative cost base used, i.e. €3.5 million per megawatt capital cost – Approximately €1m higher than costs used by EWEA Conservative fuel price forecasts used. 11

12. Cost Benefit Analysis Conclusions Shows primary net direct benefit for Ireland Inc. of up to €1.7 billion 2012-2027 Extra quantifiable indirect benefits €2.1 billion including Merit Order Effect, employment, carbon fines saved, reduced emissions, etc. In virtually all scenarios there is a direct net benefit, in all scenarios there is an economic benefit when indirect benefits are included Cost to Government of carbon fines 2008 – 2012 €1.17 billion 2680MW in the consenting process for NOW Ireland Members and an estimated further 4000MW possible on Irish east coast alone Although this report was written in 2008 when Oil prices and electricity demand were higher than they are today, due to the delays experienced in rolling out offshore projects to date, it is likely that demand and fuel prices will be back to where they were and more by the time projects are up and running from 2015. 12

13. Ireland has huge Offshore Wind Resources – An export opportunity With more renewable energy generating capacity than required Strongest potential Very high potential High/medium potential Medium/low potential Simplified map based on Risø National Laboratory, Denmark, 1989 13

14. Export Opportunity – Energy EU Renewables Directive issued June 2009 allows: o EU inter state trading. o Requires individual member states plan to reach targets by June 2010. Affords a country like Ireland with its massive offshore wind and ocean resource the opportunity to export. Critical path analysis / timeline review for the industry 20/30 years out with coordinated forward planning required. Mechanism for export then needs to be developed by stakeholders in Ireland with objective of: o Protecting the consumer o Encouraging export development 14

15. There is over 100,000MW of offshore wind capacity under development in European waters. The European Commission expects the creation of 2.8m jobs by 2020 from renewable energy industry in Europe. Siemens have predicted that there will be €300bn invested in the offshore wind industry alone in the next 20 years. The UK is planning the installation of 33,000MW of offshore wind generation capacity over the next 10 years. The EWEA has predicted annual installations of offshore wind in Europe over the next few years as 1,100MW per year Offshore Wind Projects in Development in Europe Export Opportunity - Supply Chain 15

16. Export Opportunity - Supply Chain €60bn The biggest supply chain market for offshore wind in the world is on our backdoor in the Irish Sea, a supply opportunity of over €60BN 16

17. Ireland is already involved in Offshore wind exports Development Companies –SSE Renewables –Mainstream Renewable Power Project Delivery Management –Sepam Port facilities –Harland and Wolff Marine Services –Diving Companies –Work boats –Forecasting –Engineering and Environmental services 17

18. Offshore Windfarm Construction Employment Opportunities Onshore Foundation Construction Substation fabrication and fit out Turbine Assembly Onshore substation and cables Commissioning Offshore Site Prep Foundation installation Turbine Installation Substation Installation Cable Installation Commissioning 18

19. Long term Operation and Maintenance Jobs

20. 20 “If we do not invest smartly, intelligently for the next ten years, then the total cost after is going to be even bigger. Because you lock yourself in with old technologies and then it makes it even more difficult to reach the targets you have got to reach after 2020.” Connie Hedegaard, EU Climate Action Commissioner “We will need smart grids, but also strong long distance power transmission interconnectors. This will require finance. The Energy Infrastructure Package” which I plan to produce later this year will address these challenges.” Gunther Oettinger, EU Energy Commissioner “Offshore Wind will generate 70,000 green jobs, the government plans to spend £60m upgrading British ports to make them suitable for handling large offshore turbines. GE will invest £100m in a manufacturing plant, creating about 1,900 jobs in 2020. Gamesa will spend £133m setting up its world wide centre for offshore wind in Britain generating 1000 jobs and another 800 indirectly with local suppliers. Siemens plan to invest £80m in a turbine factory creating 700 jobs in the North East.” David Cameron, UK Prime Minister “Significantly more investment is planned by 2020 to meet Ireland’s Renewable Energy targets, including 780 MW of offshore wind under the Gate 3 target. This is an important stimulus offering us scope to broaden and develop our economy. Given the scale of our offshore resources, we could potentially harness more energy than we need ourselves. This brings us opportunities to develop an offshore renewable electricity export sector which could prove to be a significant part of Ireland’s future economic story”. Brian Cowen, Irish Taoiseach Wind Bites

22. Europe needs Renewable Energy Ireland, Norway, & UK own the windy parts of the Ocean 22

23. What are the keys to unlocking these opportunities 23

24. Blueprint for the Development of Ireland’s Offshore Resources 1.Making Ireland’s Offshore Wind Resources Work 2.EU Message 3.Market Signals 4.How Ireland Benefits 5.Overview 24

25. Conclusion Offshore presents a substantial opportunity for Ireland –To achieve energy security –To reduce carbon emissions –To develop a new export product –To grow a green economy 25

26. NOW Ireland Contact Details: Brian Britton NOW Ireland 2 Marine Court Blackrock Co. Louth Tel: +353 42 9322952 Fax: +353 42 9322995 bbritton@eircom.net info@nowireland.ie www.nowireland.ie 26