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Major Infrastructure Commitments in Ireland’s Programme for Government
Yesterday, Ireland’s prospective new government published a Programme for Government (“PfG”) containing some policy commitments which will be of significant interest to private sector investors, sponsors, suppliers, operators and contractors in the Irish projects, energy and infrastructure sectors.
We have outlined below some of the key PfG highlights for stakeholders interested in playing a part in the delivery of major infrastructure projects in Ireland. The green agenda is clearly visible in this PfG and we are delighted to see that the prospective Government is committing to a policy of stimulus by investment in infrastructure, particularly projects that further sustainability priorities such as public transport and offshore wind.
In our view, the PfG is an unprecedented shift towards the green agenda for Irish politics: this shift, which includes a commitment to an average 7% reduction in greenhouse gas (GHG) emissions per year, will affect the private sector in different ways. Many of the more constructive developments will stimulate Ireland’s economy, while certain of the initiatives such as a comprehensive carbon taxation regime and disincentives for stakeholders involved in fossil fuel businesses will bring significant challenges.
As always, do get in touch with us (or your usual Matheson contact) if it would be helpful to discuss these projects or initiatives in more detail.
- Spending Plans: National Development Plan (2018 – 2027 infrastructure spending plans) review to be undertaken before 2022 to include detailed plans up to 2031 to reflect PfG commitments. New projects and initiatives will augment the strong existing project pipeline included in Project Ireland 2040.
- Planning Reform: Major planning reforms to see judicial review reform and the establishment of an Environmental and Planning Law Court occurring simultaneously, together with the long-overdue implementation of reform to the Compulsory Purchase Order regime.
- Economic Stimulus: Infrastructure development to function as economic stimulus, with a post-COVID Recovery Fund (which we understand will be distinct from existing funding commitments) to be available for investment in infrastructure capital investment projects such as social housing and public transport.
- Public Transport Commitments: Commitment to delivering Metrolink (high capacity metro light rail), new Luas (urban tram) developments, DART Expansion (heavy rail electrification, rolling stock and an interconnector tunnel under central Dublin), Bus Connects (redesigned bus networks and infrastructure) in Dublin, Cork, Galway and Limerick and national integrated ticketing. For the first time, the prospective Government is proposing to adhere to a 2:1 ratio of expenditure between new public transport infrastructure and new roads.
- Heavy Rail Focus: Investment in heavy rail to be prioritised through fleet expansion, electrification and the commissioning of economic evaluations of higher speed services between major cities.
- Housing: Over 50,000 social housing units to be delivered over the next 5 years by local authorities, Approved Housing Bodies and State agencies, with reforms to facilitate access to finance for Approved Housing Bodies and local authority discretionary social housing funding to increase from €2m to €6m. The Land Development Agency will have its mandate, powers and responsibilities expanded.
- EVs, Ports, Water and Telecoms: Development of electric vehicle (EV) charging networks and EV take-up to be incentivised by nationwide strategy, port expansion (particularly rail-connected ports) to receive specific supports, €8.5 billion of capital investment in water infrastructure up to 2040 to be ringfenced and the National Broadband Plan rollout to be accelerated.
- Offshore Wind: We are delighted to see very strong support for offshore wind, with policy targets to include 5GW of offshore wind off the Eastern and Southern coasts by 2030 and an assessment of the potential for 30GW of floating Atlantic offshore wind, coupled with commitments to hold the first offshore wind auction in 2021 and the enactment of the Marine Planning and Development Bill within 9 months (presumably from Government formation).
- Onshore Wind, Solar and Other Renewables: The first Renewable Electricity Support Scheme (RESS) auction to be held by end-2020 with further auctions taking place annually, long-delayed Wind Energy Development Guidelines to be finalised, solar strategy for both rooftop and ground-mounted PV to be developed and policy to support the use of other viable renewable electricity generation technologies (including a promising commitment to assess the potential of innovative technologies such as green hydrogen) to deliver upon a pledge to reduce Ireland’s GHG emissions by 51% up to 2030 (ie, about 7% per year). The development of micro-generation (to allow excess generation to be sold to the grid) will also be prioritised (by June 2021) in a further positive development.
- Interconnection and Grid: Celtic Interconnector (Ireland – France electricity interconnection) to be progressed, further interconnection potential to be studied and EirGrid’s DS3 system services programme (grid services to be provided by various means including Battery Energy Storage Systems (BESS)) to be continued and supported.
- Retrofitting, District Heating and CHP: Homes to be grouped into large clusters for nationwide retrofitting programme leveraging innovative (‘smart’) finance models for the delivery of retrofitting projects (with homes grouped by region for efficiency (and perhaps marketability) purposes), district heating pilots to lead to a nationwide programme (with the potential establishment of a national district heating authority) and Combined Heat and Power developments to receive tailored supports.