Interview: ESB’s Galloper deal bolsters onshore growth

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Richard Heap
May 14, 2018
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Interview: ESB’s Galloper deal bolsters onshore growth

Three years ago, the Galloper wind project looked dead and buried. SSE pulled out of the UK offshore development in late 2014, and remaining developer RWE Innogy put it on hold. With stiff competition, it looked like Galloper would fall by the wayside.

Then it staged a resurrection that would make Jesus proud. In October 2015, RWE Innogy said it would start building Galloper after it secured backing from Macquarie Capital, Siemens Financial Services and the UK Green Investment Bank, which is now part of Macquarie. The 353MW £1.5bn scheme was completed this March.

The commissioning also enabled Irish state-owned utility Electricity Supply Board to then enter the offshore market, as it bought 12.5% of Galloper from Macquarie. ESB owns a stake alongside Innogy (25%), Macquarie’s Green Investment Group (25%), Siemens Financial Services (25%), and Japan’s Sumitomo (12.5%). We talked to David McNamara, renewables manager in asset development ESB, about this deal and what it means for ESB’s plans more broadly in wind in the UK and Ireland.

McNamara says that ESB had been looking at investment opportunities in offshore wind “for several months” before the Galloper deal, and that it took the plunge with this project because it “represented an excellent combination of a strong project, excellent sponsors and debt providers”. He calls it the “perfect size” for its entry.

This isn’t the first time that ESB has considered offshore wind projects, though. In 2017, the company said it was looking to establish offshore wind farms in Ireland’s waters, and planned to make its first Irish offshore wind deals in the early- to mid-2020s. However, this is the first time that it has taken a stake in a working project.

McNamara says ESB sees the UK and Ireland as “increasingly integrated market” and that “Galloper is a very natural addition to that business”.

This represents a significant move for ESB, which had previously focused on the onshore sector. The company has a 400MW onshore portfolio in the UK and Ireland, of which three of the projects totalling 125MW are in the UK. In total, ESB operates 18 wind farms, ten thermal power stations and nine hydro plants in the countries.

McNamara says that increasing the proportion of wind in its portfolio will be key as it seeks to increase the proportion of zero-carbon generation in its asset mix. He says wind can help provide “bulk, low-cost renewable energy… Therefore, we see it as being a very important component of our generation portfolio in the coming years”.

One potential obstacle to ESB’s growth in Ireland is the fact that the government is overhauling renewable energy support, planning guidance and grid access rules. McNamara says it is difficult to discuss the direction of Irish policy in great detail as the new system is still taking shape, but he adds that the business case for wind is getting stronger because of cost reductions and the growth of electric vehicles.

He says: “In addition, as the carbon content of electricity continues to drop, the case for electrification of transportation and heat with efficient electricity technologies becomes compelling. This is positive for renewable electricity and ESB expects to play its part in further reducing the carbon intensity of the Irish economy.”

Galloper may be ESB’s first foray in the offshore wind sector – but, with momentum starting to pick up in Ireland and asset sales in the UK as owners look to recycle their capital, we don’t expect it to be the last.

Three years ago, the Galloper wind project looked dead and buried. SSE pulled out of the UK offshore development in late 2014, and remaining developer RWE Innogy put it on hold. With stiff competition, it looked like Galloper would fall by the wayside.

Then it staged a resurrection that would make Jesus proud. In October 2015, RWE Innogy said it would start building Galloper after it secured backing from Macquarie Capital, Siemens Financial Services and the UK Green Investment Bank, which is now part of Macquarie. The 353MW £1.5bn scheme was completed this March.

The commissioning also enabled Irish state-owned utility Electricity Supply Board to then enter the offshore market, as it bought 12.5% of Galloper from Macquarie. ESB owns a stake alongside Innogy (25%), Macquarie’s Green Investment Group (25%), Siemens Financial Services (25%), and Japan’s Sumitomo (12.5%). We talked to David McNamara, renewables manager in asset development ESB, about this deal and what it means for ESB’s plans more broadly in wind in the UK and Ireland.

McNamara says that ESB had been looking at investment opportunities in offshore wind “for several months” before the Galloper deal, and that it took the plunge with this project because it “represented an excellent combination of a strong project, excellent sponsors and debt providers”. He calls it the “perfect size” for its entry.

This isn’t the first time that ESB has considered offshore wind projects, though. In 2017, the company said it was looking to establish offshore wind farms in Ireland’s waters, and planned to make its first Irish offshore wind deals in the early- to mid-2020s. However, this is the first time that it has taken a stake in a working project.

McNamara says ESB sees the UK and Ireland as “increasingly integrated market” and that “Galloper is a very natural addition to that business”.

This represents a significant move for ESB, which had previously focused on the onshore sector. The company has a 400MW onshore portfolio in the UK and Ireland, of which three of the projects totalling 125MW are in the UK. In total, ESB operates 18 wind farms, ten thermal power stations and nine hydro plants in the countries.

McNamara says that increasing the proportion of wind in its portfolio will be key as it seeks to increase the proportion of zero-carbon generation in its asset mix. He says wind can help provide “bulk, low-cost renewable energy… Therefore, we see it as being a very important component of our generation portfolio in the coming years”.

One potential obstacle to ESB’s growth in Ireland is the fact that the government is overhauling renewable energy support, planning guidance and grid access rules. McNamara says it is difficult to discuss the direction of Irish policy in great detail as the new system is still taking shape, but he adds that the business case for wind is getting stronger because of cost reductions and the growth of electric vehicles.

He says: “In addition, as the carbon content of electricity continues to drop, the case for electrification of transportation and heat with efficient electricity technologies becomes compelling. This is positive for renewable electricity and ESB expects to play its part in further reducing the carbon intensity of the Irish economy.”

Galloper may be ESB’s first foray in the offshore wind sector – but, with momentum starting to pick up in Ireland and asset sales in the UK as owners look to recycle their capital, we don’t expect it to be the last.

Three years ago, the Galloper wind project looked dead and buried. SSE pulled out of the UK offshore development in late 2014, and remaining developer RWE Innogy put it on hold. With stiff competition, it looked like Galloper would fall by the wayside.

Then it staged a resurrection that would make Jesus proud. In October 2015, RWE Innogy said it would start building Galloper after it secured backing from Macquarie Capital, Siemens Financial Services and the UK Green Investment Bank, which is now part of Macquarie. The 353MW £1.5bn scheme was completed this March.

The commissioning also enabled Irish state-owned utility Electricity Supply Board to then enter the offshore market, as it bought 12.5% of Galloper from Macquarie. ESB owns a stake alongside Innogy (25%), Macquarie’s Green Investment Group (25%), Siemens Financial Services (25%), and Japan’s Sumitomo (12.5%). We talked to David McNamara, renewables manager in asset development ESB, about this deal and what it means for ESB’s plans more broadly in wind in the UK and Ireland.

McNamara says that ESB had been looking at investment opportunities in offshore wind “for several months” before the Galloper deal, and that it took the plunge with this project because it “represented an excellent combination of a strong project, excellent sponsors and debt providers”. He calls it the “perfect size” for its entry.

This isn’t the first time that ESB has considered offshore wind projects, though. In 2017, the company said it was looking to establish offshore wind farms in Ireland’s waters, and planned to make its first Irish offshore wind deals in the early- to mid-2020s. However, this is the first time that it has taken a stake in a working project.

McNamara says ESB sees the UK and Ireland as “increasingly integrated market” and that “Galloper is a very natural addition to that business”.

This represents a significant move for ESB, which had previously focused on the onshore sector. The company has a 400MW onshore portfolio in the UK and Ireland, of which three of the projects totalling 125MW are in the UK. In total, ESB operates 18 wind farms, ten thermal power stations and nine hydro plants in the countries.

McNamara says that increasing the proportion of wind in its portfolio will be key as it seeks to increase the proportion of zero-carbon generation in its asset mix. He says wind can help provide “bulk, low-cost renewable energy… Therefore, we see it as being a very important component of our generation portfolio in the coming years”.

One potential obstacle to ESB’s growth in Ireland is the fact that the government is overhauling renewable energy support, planning guidance and grid access rules. McNamara says it is difficult to discuss the direction of Irish policy in great detail as the new system is still taking shape, but he adds that the business case for wind is getting stronger because of cost reductions and the growth of electric vehicles.

He says: “In addition, as the carbon content of electricity continues to drop, the case for electrification of transportation and heat with efficient electricity technologies becomes compelling. This is positive for renewable electricity and ESB expects to play its part in further reducing the carbon intensity of the Irish economy.”

Galloper may be ESB’s first foray in the offshore wind sector – but, with momentum starting to pick up in Ireland and asset sales in the UK as owners look to recycle their capital, we don’t expect it to be the last.

Three years ago, the Galloper wind project looked dead and buried. SSE pulled out of the UK offshore development in late 2014, and remaining developer RWE Innogy put it on hold. With stiff competition, it looked like Galloper would fall by the wayside.

Then it staged a resurrection that would make Jesus proud. In October 2015, RWE Innogy said it would start building Galloper after it secured backing from Macquarie Capital, Siemens Financial Services and the UK Green Investment Bank, which is now part of Macquarie. The 353MW £1.5bn scheme was completed this March.

The commissioning also enabled Irish state-owned utility Electricity Supply Board to then enter the offshore market, as it bought 12.5% of Galloper from Macquarie. ESB owns a stake alongside Innogy (25%), Macquarie’s Green Investment Group (25%), Siemens Financial Services (25%), and Japan’s Sumitomo (12.5%). We talked to David McNamara, renewables manager in asset development ESB, about this deal and what it means for ESB’s plans more broadly in wind in the UK and Ireland.

McNamara says that ESB had been looking at investment opportunities in offshore wind “for several months” before the Galloper deal, and that it took the plunge with this project because it “represented an excellent combination of a strong project, excellent sponsors and debt providers”. He calls it the “perfect size” for its entry.

This isn’t the first time that ESB has considered offshore wind projects, though. In 2017, the company said it was looking to establish offshore wind farms in Ireland’s waters, and planned to make its first Irish offshore wind deals in the early- to mid-2020s. However, this is the first time that it has taken a stake in a working project.

McNamara says ESB sees the UK and Ireland as “increasingly integrated market” and that “Galloper is a very natural addition to that business”.

This represents a significant move for ESB, which had previously focused on the onshore sector. The company has a 400MW onshore portfolio in the UK and Ireland, of which three of the projects totalling 125MW are in the UK. In total, ESB operates 18 wind farms, ten thermal power stations and nine hydro plants in the countries.

McNamara says that increasing the proportion of wind in its portfolio will be key as it seeks to increase the proportion of zero-carbon generation in its asset mix. He says wind can help provide “bulk, low-cost renewable energy… Therefore, we see it as being a very important component of our generation portfolio in the coming years”.

One potential obstacle to ESB’s growth in Ireland is the fact that the government is overhauling renewable energy support, planning guidance and grid access rules. McNamara says it is difficult to discuss the direction of Irish policy in great detail as the new system is still taking shape, but he adds that the business case for wind is getting stronger because of cost reductions and the growth of electric vehicles.

He says: “In addition, as the carbon content of electricity continues to drop, the case for electrification of transportation and heat with efficient electricity technologies becomes compelling. This is positive for renewable electricity and ESB expects to play its part in further reducing the carbon intensity of the Irish economy.”

Galloper may be ESB’s first foray in the offshore wind sector – but, with momentum starting to pick up in Ireland and asset sales in the UK as owners look to recycle their capital, we don’t expect it to be the last.

Three years ago, the Galloper wind project looked dead and buried. SSE pulled out of the UK offshore development in late 2014, and remaining developer RWE Innogy put it on hold. With stiff competition, it looked like Galloper would fall by the wayside.

Then it staged a resurrection that would make Jesus proud. In October 2015, RWE Innogy said it would start building Galloper after it secured backing from Macquarie Capital, Siemens Financial Services and the UK Green Investment Bank, which is now part of Macquarie. The 353MW £1.5bn scheme was completed this March.

The commissioning also enabled Irish state-owned utility Electricity Supply Board to then enter the offshore market, as it bought 12.5% of Galloper from Macquarie. ESB owns a stake alongside Innogy (25%), Macquarie’s Green Investment Group (25%), Siemens Financial Services (25%), and Japan’s Sumitomo (12.5%). We talked to David McNamara, renewables manager in asset development ESB, about this deal and what it means for ESB’s plans more broadly in wind in the UK and Ireland.

McNamara says that ESB had been looking at investment opportunities in offshore wind “for several months” before the Galloper deal, and that it took the plunge with this project because it “represented an excellent combination of a strong project, excellent sponsors and debt providers”. He calls it the “perfect size” for its entry.

This isn’t the first time that ESB has considered offshore wind projects, though. In 2017, the company said it was looking to establish offshore wind farms in Ireland’s waters, and planned to make its first Irish offshore wind deals in the early- to mid-2020s. However, this is the first time that it has taken a stake in a working project.

McNamara says ESB sees the UK and Ireland as “increasingly integrated market” and that “Galloper is a very natural addition to that business”.

This represents a significant move for ESB, which had previously focused on the onshore sector. The company has a 400MW onshore portfolio in the UK and Ireland, of which three of the projects totalling 125MW are in the UK. In total, ESB operates 18 wind farms, ten thermal power stations and nine hydro plants in the countries.

McNamara says that increasing the proportion of wind in its portfolio will be key as it seeks to increase the proportion of zero-carbon generation in its asset mix. He says wind can help provide “bulk, low-cost renewable energy… Therefore, we see it as being a very important component of our generation portfolio in the coming years”.

One potential obstacle to ESB’s growth in Ireland is the fact that the government is overhauling renewable energy support, planning guidance and grid access rules. McNamara says it is difficult to discuss the direction of Irish policy in great detail as the new system is still taking shape, but he adds that the business case for wind is getting stronger because of cost reductions and the growth of electric vehicles.

He says: “In addition, as the carbon content of electricity continues to drop, the case for electrification of transportation and heat with efficient electricity technologies becomes compelling. This is positive for renewable electricity and ESB expects to play its part in further reducing the carbon intensity of the Irish economy.”

Galloper may be ESB’s first foray in the offshore wind sector – but, with momentum starting to pick up in Ireland and asset sales in the UK as owners look to recycle their capital, we don’t expect it to be the last.

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Not a member yet?

Become a member of the 6,500-strong A Word About Wind community today, and gain access to our premium content, exclusive lead generation and investment opportunities.