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Minister Denis Naughten secures Cabinet Approval for Renewable Electricity Support Scheme (RESS)

'First RESS auction in 2019 will deliver 'shovel ready' projects'

 

 

July 24th 2018

 

The Minister for Communications, Climate Action and Environment, Denis Naughten, T.D. has today received Government approval for the new Renewable Electricity Support Scheme (RESS).

 

The new Scheme will incentivise the introduction of sufficient renewable electricity generation to meet national and EU-wide renewable energy and decarbonisation targets out to 2030.

 

In addition, the RESS will deliver broader energy policy objectives including: enhancing security of supply; diversifying the renewable technology mix; and increasing community participation in and benefit from renewable energy projects.

 

Announcing the new Scheme the Minister for Communications, Climate Action and Environment, Denis Naughten said: "RESS has been approved by Government and I will now seek EU State Aid approval. This Scheme will mark a shift from guaranteed fixed prices for renewable generators to a more market-oriented mechanism (auctions) where the cost of support will be determined by competitive bidding between renewable generators. The RESS is a critical step in bringing Ireland to a leadership role in relation to renewable energy, climate action, and energy efficiency. Communities are central to the design of the new Scheme and this will have a transformative impact on renewable energy projects right across the country."

 

Main Elements of the new Scheme:

 

Community Participation:

A Community-led category and community capacity building measures will provide opportunities for communities to play their part in Ireland's renewable energy transition.

 

Projects looking for support under the new RESS will need to meet pre-qualification criteria including offering the community an opportunity to invest in and take ownership of a portion of renewable projects in their local area. A national register of community benefit payments will also be established.

 

The development of RESS included an in-depth study of international best practice, across Denmark, Germany, Canada and Scotland. These countries are world leaders in community-led renewable electricity projects.

 

Increasing Technology Diversity:

The new Scheme will help realise the Government's policy objective of enhancing security of supply and broadening the renewable energy mix. As renewable technologies mature and costs fall, Ireland is well placed to take advantage and greatly diversify its renewable portfolio.  

Minister Naughten added: "While the auction approach will provide a route to market for multiple technologies, it will do so in a competitive, cost effective framework. The use of certain 'levers', such as near term delivery dates and 'single technology caps', will accelerate the broadening of the renewable technology mix, particularly in light of falling costs for a number of renewable technologies."

 

Delivering Ireland's contribution to renewable electricity targets out to 2030 and close the gap on 2020 renewable electricity targets:

RESS has been designed to deliver Ireland's contribution towards an EU-wide renewable energy target of 32%, out to 2030, within a competitive auction-based, cost effective framework.

 

The new scheme is framed within the context of Ireland's effort to meet it's 2020 renewable energy targets and the European Union's Clean Energy Package, in particular the recast Renewable Energy Directive and the development of Ireland's draft National Energy and Climate Plan (NECP).

 

Renewable Electricity Auctions:

RESS auctions will be held at frequent intervals throughout the lifetime of the scheme. This will allow Ireland to take advantage of falling technology costs and by not auctioning all the required capacity at once, we will not be 'locking in' higher costs for consumers for the entirety of the scheme.

 

The Scheme will provide for a renewable electricity (RES-E) ambition of up to a maximum of 55% by 2030, subject to determining the cost effective level which will be set out in the draft National Energy and Climate Plan (NECP).

 

RESS auctions will be designed in line with trajectory targets identified in Ireland's NECP. In addition, the first RESS auction in 2019 will deliver 'shovel ready' projects, reducing the gap to 2020. Ireland's current RES-E target is 40% by 2020.  RESS auctions will also assist in the early delivery for our trajectory to 2030.

 

Further information is available at https://www.dccae.gov.ie/en-ie/energy/topics/Renewable-Energy/electricity/renewable-electricity-supports/ress/Pages/default.aspx

 

RESS Design Paper can be accessed here.

 

Ends/

 

Notes to Editor

 

Overview:

On June 14th 2018, the recast Renewable Energy Directive was agreed between the European Commission, the European Parliament and the European Council. This new regulatory framework includes a binding renewable energy target for the EU for 2030 of 32% with a review clause by 2023 for an upward revision of the EU level target.

 

The new RESS will deliver Ireland's contribution towards this EU wide 32% RES target, out to 2030. RESS auctions will be designed in line with trajectory targets identified in Ireland's National Climate and Energy Plan (NECP).

 

The RESS reflects a broader movement towards greater public and citizen engagement in relation to energy policy, and the RESS will be transformational in terms of providing pathways for citizens and communities to participate in the energy transition that is to the core of the recast Renewable Energy Directive. The European Union has now identified the rights, obligations and entitlements of renewable energy communities and renewable self-consumers and the RESS will deliver on these ambitions.

 

The RESS is a product of both independent economic analysis and public participation and consultation. Across two public consultations, over 2,000 submissions have been received from the public in relation to RESS and the new scheme, approved by Government, reflects the diversity of views and the inherent complexity of delivering multiple policy objectives. 

 

RESS Structure

The new RESS will largely be shaped by EU State Aid Guidelines which call for competitive auctions and bidding between project developers for state support.

 

The scheme will be characterised by a series of renewable electricity auctions where projects bid against each other for support. The State will determine the exact quantity of capacity to be procured in each auction round based on detailed analysis of project supply and demand.

 

Communities

The development of RESS has included an in-depth review of international best practice, across Denmark, Germany, Canada and Scotland; world leaders in community-led renewable electricity projects.

 

Stakeholder workshops and interviews were held which identified the most appropriate policies and supports to increase community participation in and benefit from RES-E projects, in an Irish context. Government will continue to work with industry groups to ensure these policies are implemented in a fair, achievable and transparent manner.

 

In addition to the social benefits there are strong economic benefits for supporting a community focused scheme. We need to work with communities and increase community engagement with renewable electricity projects in Ireland. Community benefit and community participation will lead to a more socially acceptable, diverse (and more cost effective) renewable electricity mix. Community participation makes economic sense.

 

Technology Diversification

The economic evidence suggests that a number of technologies have overlapping costs and could compete against each other throughout the lifetime of RESS.

 

In addition, the quantity of new renewable generation required to deliver Irelands ambitions out to 2030 and to deliver Ireland's commitments under the National Development Plan and Project Ireland 2040 will ensure a natural broadening of the technology mix as the scheme matures.

 

The RESS roadmap will provide pathways for renewable developers including offshore wind projects as it sets out the indicative timelines and volumes for auctions over the coming decade and provides clarity for developers in relation to when they need to have their projects 'auction ready'. 

 

The volume of capacity being sought under state aid notification (up to 55% RES-E by 2030) will provide certainty to investors that Ireland is serious about increasing its renewable electricity penetration and increasing the diversity of technologies at scale.

 

While the auction approach will provide route to market for multiple technologies, it will do so in a competitive, cost effective framework. The use of certain 'levers' such as near term delivery dates and 'single technology caps' will accelerate the broadening of the renewable technology mix and ensure technology diversity within a cost competitive framework.

 

 

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