The rights to develop a 900 megawatt (MW) offshore wind farm have been awarded to a joint venture between the ESB Group and Denmark's Orsted.
The Tonn Nua project, off the coast of Waterford, was awarded with a 20-year contract-for-difference (CfD) secured at a strike price of €98.72 per megawatt hour.
The scheme ensures developers a guaranteed electricity price, with costs or savings passed onto consumers based on wholesale price fluctuations.
The site is expected to produce enough electricity to power the equivalent of around 800,000 Irish homes.
The Department of Energy, Climate and the Enviroment said the auction had secured a "highly competitive price compared to recent auctions internationally".
The offshore wind sector has faced significant financial headwinds, including rising costs, higher interest rates and supply chain disruptions, deterring bidders in auctions across Europe.
Developers have cited insufficient subsidies and revenue guarantees as key barriers in markets such as Denmark, Germany, France, the Netherlands and Lithuania.
The Tonn Nua site is in an early phase of development and will need to seek several permits from authorities and also meet the joint venture's own value creation criteria, Orsted said. The wind farm is expected to reach its final investment decision around 2031, with the first power generation seen in the mid-2030s.
The successful bid comes as Ireland, which currently has just 25 MW of installed offshore wind capacity, aims to diversify its energy mix and increase renewables' share in electricity generation.
Wind Energy Ireland also today welcomed the results of today's auction for the Tonn Nua site, describing it as a "great vote of confidence" for offshore wind investment.
Noel Cunniffe, CEO of Wind Energy Ireland, said that Tonn Nua will deliver enormous volumes of clean, affordable, electricity for Irish consumers and represents a huge economic opportunity for Waterford and the south-east of Ireland generally.
"We look forward to working with our colleagues in ESB/Orsted to ensure Tonn Nua is delivered and for it to be the foundation of a thriving offshore wind industry on the country's south coast," he said.
But he also pointed out that there is no clarity on the timeline for future projects.
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.
"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," Mr Cunniffe said.
"That makes it all the more important that industry and the relevant state agencies work together to ensure we deliver Tonn Nua and the five other existing projects off Ireland's east coast," he added.
