Renewable Electricity Auction Details Published

RESS is the new Renewable Electricity Support Scheme in Ireland. It is a new auction scheme which is essential for achieving Ireland’s 70% renewable electricity target by 2030. Auctions will decide which generators will receive contracts.
The terms and conditions of the first auction (RESS1) were published by the Department of Energy (DCCAE) on 27th February, providing much-needed clarity for potential auction bidders. This is a welcome step towards delivery of new wind and solar projects in Ireland. 

Qualification opens on 9th March and closes on 2nd April. Bid bonds and all documentation as applicable should be ready.
The next major milestone after qualification is the publication of the auction info pack on 19th June. This will provide clarity on qualified volumes, auction competition ratios and the method for deciding how many GWh will be procured above the minimum 1,000 GWh committed to. The auction itself will open for one week from 23rd June.

Bioxl can provide advice on the qualification process or any other aspects of preparing, qualifying and bidding your renewable energy projects.

Some of the headline changes in the RESS1 T&Cs as compared with the Draft published in December are:

• The 5% renewable energy participation debt scheme has been shelved. The high rates of return and the guarantees requested from the project to underwrite the debt was controversial
• The Community benefit provisions have been extended to cover all projects, having previously excluded Community-led projects. The near-neighbour payments now only apply to wind projects, having proved unworkable for solar and other technologies and the provisions for spending and monitoring the community funds have been revised.
• The definition of Community-Led has been updated, in particular the requirement to have >150 members is gone, and the possibility for NGOs or other non-profit and community groups to participate has been opened up. As in the draft T&C, there is a longstop at 30/6/21 to submit evidence of a company structure that complies with the definition of Community-Led Projects. An application to qualify a Community-Led project must be made in conjunction with a Sustainable Energy Community.
• It remains the case that no matter what category a project qualifies for, the project is the same. In practice this means the MW qualified and the offer price are the same whether the project is Community, Solar or All category. The MW qualified is linked to the MEC, and the 120% over-install rule used by ESBN/Eigrid applies.
• There are revised provisions on change of ownership. All shareholdings above 30% have to be disclosed, and where commercial discussions have commenced that may lead to a new >30% shareholder at bid submission, this should also be disclosed at qualification stage. It is difficult to see how this will work in practice, as confidential commercial discussions are often ongoing, can be aborted and are rarely disclosed until confirmed.
• The minimum size has been reduced from 1MW to 0.5MW. In practice it is difficult to see that this will make any difference, except perhaps allowing some additional smaller wind and solar projects to qualify.
• The CFD mechanics and market settlement provisions remain largely the same. Quite a bit of industry feedback focused on negative pricing periods. The DCCAE view is to leave this unchanged.

Further info:
DCCAE
Eirgrid

Renewable Energy in Ireland to Surpass Coal for First Time

The prevailing public opinion is that renewable energy is still a niche within the energy sector, so I thought it helpful to share some analysis that puts this in context. (Originally posted as Twitter thread).

According to the SEAI, 2017 is the year when renewables will have first surpassed coal as a primary energy source in Ireland. The transition of the largest ESB powerplant at Moneypoint away from Coal by 2025 will accelerate this trend.

Primary Energy from Renewables to Surpass Coal for the first time in 2017

Renewable energy officially overtook peat in 2011. Electricity production from peat has a high carbon footprint, so it is welcome news that over time the three peat power plants will eventually close or convert to sustainable biomass fuels.

Primary Energy from Renewables overtook Peat back in 2011

In less positive news, the use of natural gas is still three times the level of renewables and expected to grow at a faster pace. Current plans are to convert legacy plant to natural gas and it remains the fuel of choice for commercial or domestic heating. There are good prospects that some of this will be grid-injected biogas, but the majority will be fossil-based.

Natural Gas use predicted to grow faster than Renewables

And our continued reliance on oil, particularly for private cars and home heating remains the biggest challenge for Irish energy policy. Time to walk, cycle, use public transport and drive electric. Also renewable heat supports cant come soon enough to encourage biomass and heat pumps.

Stubborn reliance on oil for heating and transport

SEAI maintain an excellent resource for charting historic and predicted energy use in Ireland: SEAI charting App

Renewable Heat Scheme Approved by Cabinet

The much-awaited renewable heat incentive has been approved by the Irish government. However the Taoiseach told us it needs a new name, to avoid unhelpful parallels with the Northern Ireland scheme of the same name, which eventually became known as the "Cash for Ash" scandal.



It is now being called the Support Scheme for Renewable Heat (or SSRH). Semantics aside, the approval of the scheme by Cabinet and the emergence of some detail is a welcome development and will allow the assessment of opportunities by customers and suppliers alike over the coming months.
 

It is expected to be open for applications towards the end of 2018, although an EU State-aid approval is required prior to this. It is worth remembering also that the UK equivalent changed significantly before and after state aid clearance, with different support levels being finally approved by the EU competition authority.

Inside a wood pellet boiler (BioXL)

The Sustainable Energy Authority of Ireland (SEAI) are charged with administering the scheme and they have to prepare a robust mechanism and T&Cs to implement the scheme.

And what of the scheme and rates proposed?

BioXL prepared an extensive piece of research and recommended rates in 2015 on behalf of the Irish Bioenergy Association. Perhaps unsurprisingly the rates announced are below the required rates that were evidenced by industry. The recommendation of tiering supports has been embraced with the introduction of five reducing-payment tiers.

The payment rates are set at a level that should be appealing for switching from oil or coal to biomass heating with wood chip or wood pellet, but will not be a competitive option for those using gas boilers or electrical heating systems. About one third of public or commercial buildings currently use some form of oil heating. It can't be expected that they would all replace their existing heating systems. A decision on heating systems is normally taken when a building is first constructed or substantially renovated, or when the existing heating system gives up. One in five making the move to green heat is perhaps a reasonable prediction over the next few years. A typical office building with a 200kW boiler could expect a support payment of €16,800/year for 15 years to make the capital investment to switch over to biomass.



Poultry shed fitted with fin radiators (BioXL)

Farm applications should also be of interest, primarily for piggeries or poultry units that have an ongoing heat requirement and wish to stop using oil. They will have the space and flexibility to adapt their business to a green heat solution and this was a popular application in Northern Ireland.

Pending legislation about near zero energy buildings (NZEB) will also make new developments consider renewable heat options more carefully.
 

Heat from anaerobic digestion has been included, but at a rate that will have limited material impact. The annual payment is capped at €36,500/year.

The possibility of grid injection of biogas has been considered but deferred to a later phase and subject to additional economic analysis. This will disapppoint those with projects in the pipeline.

The decision to provide grant support for heat pumps is sensible, given that the investment is almost entirely front-loaded. It will cut out unnecessary administration and allow tighter controls around the scheme.