The project, about 10km from Helvick Head, will cost significantly more than €2bn to develop.
The joint venture won the auction under the Offshore Renewable Energy Support Scheme (ORESS) that is operated by EirGrid, the semi-state company that manages Ireland’s electricity network.
The ORESS guarantees the minimum price that generators will be paid for the electricity their projects deliver, which can make projects financially viable and allow construction to proceed.
The Tonn Nua project should be able to provide enough electricity when operating at full capacity to power up to 800,000 homes. The ESB-Ørsted joint venture that has won the auction is called Helvick Head Offshore Wind.
Apart from Tonn Nua, three other offshore areas in the south-east have been earmarked for major offshore wind projects.
While welcoming the Tonn Nua auction, the chief executive of industry lobby group Wind Energy Ireland, Noel Cunniffe, said that there is no timeline for future projects that might proceed under the offshore auction process.
“There are three other sites off Ireland’s south coast which have been identified for offshore wind energy but there is no clarity on when, how or even if they will move forward,” he warned.
“The Government plans to publish a national map of new sites by the end of 2027 but until that is produced the development of further projects is effectively stalled,” he added.
Ørsted, which is 50.1pc-owned by the Danish government, signed a partnership with the ESB in 2023. Photo: Frank McGrath
Confirming the Tonn Nua auction result, the government said it “will now move towards making arrangements to bring the remaining three offshore wind energy sites in the south-east to the market”.
The government aims to have 80pc of energy generated by renewables by 2030. It also hopes to have at least 5GW of offshore generating capacity installed by then.
By 2050, the government’s aim is that at least 37GW of offshore renewable energy capacity will be in operation.
Darragh O’Brien, the Minister for Climate, Energy and the Environment, insisted that the completion of the Tonn Nua auction marks a “milestone moment” in Ireland’s offshore renewable energy ambitions.
“The highly competitive price secured represents positive news for Irish energy consumers and our nation, bringing us closer to overcoming the challenges of energy security and affordability, and towards achieving energy independence,” he said.
The price secured per megawatt hour was €98.719, which the department said compares favourably with recent offshore energy auctions in other jurisdictions.
Ørsted, which is 50.1pc-owned by the Danish government, signed a partnership with the ESB in 2023. The partnership is billed to have the potential to deliver up to 5GW of offshore renewable energy and complementary renewable hydrogen projects in Ireland.
Ørsted was plunged into a financial crisis in September, due in part to Donald Trump’s White House administration axing projects it is working on. It ordered Ørsted to cease work on a nearly complete $1.5bn (€1.3bn) windfarm project off the coast of Rhode Island.
Ørsetd was forced to raise €8bn to plug its balance sheet.
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