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As Dun Laoghaire residents await An Bord Pleanála's decision on the controversial cruise liner berth proposed for the town's harbour, local banker Paddy Shanahan took a look at the books of the Dun Laoghaire Harbour Company (DLHC) – and finds the whole situation wanting. Harbour CEO Gerry Dunne's response is also posted below.

I am a banker with over 30 years' experience working in New York and London. I have recently returned to Ireland. I am married with two small boys and I run a corporate finance and restructuring practice here in Dublin. I live in Sandycove and am part of Dublin Bay Concern, an organisation comprising many residents of Dun Laoghaire-Rathdown (DLR).

My concern relates to the future status of the Dun Laoghaire Harbour Company (DLHC). I am opposed to the planned super cruise berth terminal for the harbour and to the Masterplan submitted by the DLHC. An Bord Pleanála is currently deliberating on DLHC’s application following a month-long oral hearing.

Meanwhile, the Harbours Bill 2015 was recently introduced into the Oireachtas. This bill will decide the future of DLHC. We are presented with two options, one of which will be decided by Minister for Transport Paschal Donohoe:

a) DLHC becomes a wholly owned subsidiary of the chief executive DLR CoCo.
b) DLHC is dissolved and integrated into DLR CoCo.

On a matter of profound importance to the residents of DLR and to the hundreds of thousands who use the harbour as an amenity every year, there has been little to no communication by the relevant elected representatives back to their constituents on this matter, excepting Richard Boyd Barrett and his party People Before Profit.

Difficult financial situation

On my own volition, I obtained copies of DLHC’s accounts from 2012 to 2014. I have analysed these accounts and found the following:

DLHC’s financial position has been declining in recent years. In 2012 the company’s cash reserves declined by €2.0m and in 2013 by a further €1.3m. The decline in cash was much smaller in 2014 (€37,000) thanks to the receipt of a €406,420 grant, the provenance of which and use for is unidentified in their accounts.

At the end of 2014, DLHC had cash reserves of €3.5m. With no revenue from the Stena HSS in 2015, remaining cash reserves of €3.5m are rapidly dwindling.

DLHC had bank loans of €4.8m at the end of 2014 for which it does not appear to have sufficient cash or the prospect of sufficient cash to repay in future years.

Based on the above facts, it is clear to me that DLHC is in a difficult financial situation and has neither the reserves nor the ability to borrow the funds required to build the proposed cruise berth.

Notwithstanding its precarious financial position and ignoring the implications to the well-being of Dun Laoghaire Harbour, DLHC wishes to roll the dice and stake its future on providing giant cruise berth facilities – this despite the reality of Dublin Port.

Less than 5km from Dun Laoghaire, Dublin Port is a highly profitable world-class shipping port, and it is the preferred cruise ship destination offering quick access to Dublin city centre. It already receives over 80 super-sized cruise ships a year and has recently received planning permission to begin a €200m development which will double its large cruise ship capacity together with a state-of-the-art modern passenger terminal specifically being built for visiting cruise liners.

DLHC proposes a collusive duopoly for the cruise ship business with Dublin Port. Not only is this stupendously naïve, it is also illegal for State-owned bodies to distort the competitive environment, and elegantly demonstrates the flawed business case DLHC proposes – especially in light of the Stena HSS departing for good under DLHC’s watch.

'A likely white elephant'

The Code of Practice for the Governance of State Bodies issued by the Department of Finance in March 1992 and updated October 2001 states that:

“As the ultimate owners of, and investors, in State bodies, citizens and taxpayers have an important and legitimate interest in the achievement of value for money in the State sector. Whether commissioning public services or providing them directly, State bodies have a duty to strive for economy, efficiency, transparency and effectiveness in their expenditure.”

In 2012 and 2013 DLHC received €250,000 and €200,000 in grants from Dun Laoghaire-Rathdown County Council (DLRCoCo) in respect of DLHC’S Large Cruise Liners initiative. The former was for tendering facilities outside the harbour mouth; the latter was toward defraying costs relating to the planning application.

If it transpires that the €400,000 grant unidentified in the accounts for 2014 was from DLRCoCo, then it would appear that nearly €1m of DLR taxpayers' money has been paid over by the council toward the planning costs of building a likely white elephant.

Is it unreasonable to posit a conflict of interest where the executive branch of DLRCoCo making the payments to DLHC houses the same department that approved the planning application currently being decided by An Bord Pleanála? Is this like Hamlet without the prince? Have DLHC fulfilled their obligations under the code regarding transparency and governance? Clearly not. Where is the oversight? There isn’t any.

Allowing true oversight

Addressing the Dáil on the occasion of the Harbours Bill 2015 debate on amendments last Wednesday 2 December, Minister Donohoe specified there is to be an undefined period of due diligence and examination of DLHC prior to its future being decided by himself.

In the interests of democracy let us hope the minister dissolves the DLHC and transfers its unencumbered assets to the local authority, thus allowing true oversight and accountability.

Given the close relationship and history between the non-elected executive branch of DLRCoCo and DLHC, a decision by the minister that makes the DLHC a wholly owned subsidiary of the chief executive will be a step backwards and simply perpetuates the current unsatisfactory status quo.

The future of Dun Laoghaire Harbour should be decided by the elected representatives of DLRCoCo, the harbour’s genuine stakeholders, and its various community groups.

Dun Laoghaire Harbour, dear to the hearts of all residents of DLR, is being held hostage to the ambitions of a dysfunctional organisation that is running out of money and being supported in a clandestine manner against all principles of transparency and governance.

Response from Dun Laoghaire Harbour Company CEO

DLHC has decided that it is not appropriate to make further public comment while An Bord Pleanala is considering our planning application.
Suffice to make the following brief points ;
[a] the European Commission have stated that the grant of €20m towards the Dublin Port development is made on the basis that such support is not given to dedicated infrastructure and facilities for cruise ships. Therefore, Mr Shanahan is fundamentally incorrect in his belief that Dublin Port can provide dedicated cruise infrastructure/facilities
[b] Mr Shanahan might be very interested to know that the four Dun Laoghaire yacht clubs combined make only a very minor financial contribution of c.€70k annually towards the upkeep/maintenance of the infrastructure of the 200 year old man-made harbour. This annual contribution constitutes less than 2% of our annual operating/capital costs.

Gerry Dunne, CEO DLHC

Ireland's Offshore Renewable Energy

Because of Ireland's location at the Atlantic edge of the EU, it has more offshore energy potential than most other countries in Europe. The conditions are suitable for the development of the full range of current offshore renewable energy technologies.

Offshore Renewable Energy FAQs

Offshore renewable energy draws on the natural energy provided by wind, wave and tide to convert it into electricity for industry and domestic consumption.

Offshore wind is the most advanced technology, using fixed wind turbines in coastal areas, while floating wind is a developing technology more suited to deeper water. In 2018, offshore wind provided a tiny fraction of global electricity supply, but it is set to expand strongly in the coming decades into a USD 1 trillion business, according to the International Energy Agency (IEA). It says that turbines are growing in size and in power capacity, which in turn is "delivering major performance and cost improvements for offshore wind farms".

The global offshore wind market grew nearly 30% per year between 2010 and 2018, according to the IEA, due to rapid technology improvements, It calculated that about 150 new offshore wind projects are in active development around the world. Europe in particular has fostered the technology's development, led by Britain, Germany and Denmark, but China added more capacity than any other country in 2018.

A report for the Irish Wind Energy Assocation (IWEA) by the Carbon Trust – a British government-backed limited company established to accelerate Britain's move to a low carbon economy - says there are currently 14 fixed-bottom wind energy projects, four floating wind projects and one project that has yet to choose a technology at some stage of development in Irish waters. Some of these projects are aiming to build before 2030 to contribute to the 5GW target set by the Irish government, and others are expected to build after 2030. These projects have to secure planning permission, obtain a grid connection and also be successful in a competitive auction in the Renewable Electricity Support Scheme (RESS).

The electricity generated by each turbine is collected by an offshore electricity substation located within the wind farm. Seabed cables connect the offshore substation to an onshore substation on the coast. These cables transport the electricity to land from where it will be used to power homes, farms and businesses around Ireland. The offshore developer works with EirGrid, which operates the national grid, to identify how best to do this and where exactly on the grid the project should connect.

The new Marine Planning and Development Management Bill will create a new streamlined system for planning permission for activity or infrastructure in Irish waters or on the seabed, including offshore wind farms. It is due to be published before the end of 2020 and enacted in 2021.

There are a number of companies aiming to develop offshore wind energy off the Irish coast and some of the larger ones would be ESB, SSE Renewables, Energia, Statkraft and RWE.

There are a number of companies aiming to develop offshore wind energy off the Irish coast and some of the larger ones would be ESB, SSE Renewables, Energia, Statkraft and RWE. Is there scope for community involvement in offshore wind? The IWEA says that from the early stages of a project, the wind farm developer "should be engaging with the local community to inform them about the project, answer their questions and listen to their concerns". It says this provides the community with "the opportunity to work with the developer to help shape the final layout and design of the project". Listening to fishing industry concerns, and how fishermen may be affected by survey works, construction and eventual operation of a project is "of particular concern to developers", the IWEA says. It says there will also be a community benefit fund put in place for each project. It says the final details of this will be addressed in the design of the RESS (see below) for offshore wind but it has the potential to be "tens of millions of euro over the 15 years of the RESS contract". The Government is also considering the possibility that communities will be enabled to invest in offshore wind farms though there is "no clarity yet on how this would work", the IWEA says.

Based on current plans, it would amount to around 12 GW of offshore wind energy. However, the IWEA points out that is unlikely that all of the projects planned will be completed. The industry says there is even more significant potential for floating offshore wind off Ireland's west coast and the Programme for Government contains a commitment to develop a long-term plan for at least 30 GW of floating offshore wind in our deeper waters.

There are many different models of turbines. The larger a turbine, the more efficient it is in producing electricity at a good price. In choosing a turbine model the developer will be conscious of this ,but also has to be aware the impact of the turbine on the environment, marine life, biodiversity and visual impact. As a broad rule an offshore wind turbine will have a tip-height of between 165m and 215m tall. However, turbine technology is evolving at a rapid rate with larger more efficient turbines anticipated on the market in the coming years.

 

The Renewable Electricity Support Scheme is designed to support the development of renewable energy projects in Ireland. Under the scheme wind farms and solar farms compete against each other in an auction with the projects which offer power at the lowest price awarded contracts. These contracts provide them with a guaranteed price for their power for 15 years. If they obtain a better price for their electricity on the wholesale market they must return the difference to the consumer.

Yes. The first auction for offshore renewable energy projects is expected to take place in late 2021.

Cost is one difference, and technology is another. Floating wind farm technology is relatively new, but allows use of deeper water. Ireland's 50-metre contour line is the limit for traditional bottom-fixed wind farms, and it is also very close to population centres, which makes visibility of large turbines an issue - hence the attraction of floating structures Do offshore wind farms pose a navigational hazard to shipping? Inshore fishermen do have valid concerns. One of the first steps in identifying a site as a potential location for an offshore wind farm is to identify and assess the level of existing marine activity in the area and this particularly includes shipping. The National Marine Planning Framework aims to create, for the first time, a plan to balance the various kinds of offshore activity with the protection of the Irish marine environment. This is expected to be published before the end of 2020, and will set out clearly where is suitable for offshore renewable energy development and where it is not - due, for example, to shipping movements and safe navigation.

YEnvironmental organisations are concerned about the impact of turbines on bird populations, particularly migrating birds. A Danish scientific study published in 2019 found evidence that larger birds were tending to avoid turbine blades, but said it didn't have sufficient evidence for smaller birds – and cautioned that the cumulative effect of farms could still have an impact on bird movements. A full environmental impact assessment has to be carried out before a developer can apply for planning permission to develop an offshore wind farm. This would include desk-based studies as well as extensive surveys of the population and movements of birds and marine mammals, as well as fish and seabed habitats. If a potential environmental impact is identified the developer must, as part of the planning application, show how the project will be designed in such a way as to avoid the impact or to mitigate against it.

A typical 500 MW offshore wind farm would require an operations and maintenance base which would be on the nearby coast. Such a project would generally create between 80-100 fulltime jobs, according to the IWEA. There would also be a substantial increase to in-direct employment and associated socio-economic benefit to the surrounding area where the operation and maintenance hub is located.

The recent Carbon Trust report for the IWEA, entitled Harnessing our potential, identified significant skills shortages for offshore wind in Ireland across the areas of engineering financial services and logistics. The IWEA says that as Ireland is a relatively new entrant to the offshore wind market, there are "opportunities to develop and implement strategies to address the skills shortages for delivering offshore wind and for Ireland to be a net exporter of human capital and skills to the highly competitive global offshore wind supply chain". Offshore wind requires a diverse workforce with jobs in both transferable (for example from the oil and gas sector) and specialist disciplines across apprenticeships and higher education. IWEA have a training network called the Green Tech Skillnet that facilitates training and networking opportunities in the renewable energy sector.

It is expected that developing the 3.5 GW of offshore wind energy identified in the Government's Climate Action Plan would create around 2,500 jobs in construction and development and around 700 permanent operations and maintenance jobs. The Programme for Government published in 2020 has an enhanced target of 5 GW of offshore wind which would create even more employment. The industry says that in the initial stages, the development of offshore wind energy would create employment in conducting environmental surveys, community engagement and development applications for planning. As a site moves to construction, people with backgrounds in various types of engineering, marine construction and marine transport would be recruited. Once the site is up and running , a project requires a team of turbine technicians, engineers and administrators to ensure the wind farm is fully and properly maintained, as well as crew for the crew transfer vessels transporting workers from shore to the turbines.

The IEA says that today's offshore wind market "doesn't even come close to tapping the full potential – with high-quality resources available in most major markets". It estimates that offshore wind has the potential to generate more than 420 000 Terawatt hours per year (TWh/yr) worldwide – as in more than 18 times the current global electricity demand. One Terawatt is 114 megawatts, and to put it in context, Scotland it has a population a little over 5 million and requires 25 TWh/yr of electrical energy.

Not as advanced as wind, with anchoring a big challenge – given that the most effective wave energy has to be in the most energetic locations, such as the Irish west coast. Britain, Ireland and Portugal are regarded as most advanced in developing wave energy technology. The prize is significant, the industry says, as there are forecasts that varying between 4000TWh/yr to 29500TWh/yr. Europe consumes around 3000TWh/year.

The industry has two main umbrella organisations – the Irish Wind Energy Association, which represents both onshore and offshore wind, and the Marine Renewables Industry Association, which focuses on all types of renewable in the marine environment.

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