Elgin Energy Response to RESS – Design of a New Renewable Electricity Support Scheme
November 10, 2017
The proposed Renewable Energy Support Scheme was published by the Department of Communications, Climate Action and Environment (DCCAE) on Monday 4 September. The DCCAE invited comments and recommendations on the proposed new scheme as part of the final consultation.
Elgin Energy submitted a response on Friday 10 November, the day the consultation officially closed. In addition to answering the twenty questions therein, Elgin Energy addressed the following key issues:
- Ireland’s 2020 targets
- Community ownership
- Auction mechanism
Ireland was given a target of 16% of total energy consumed to be sourced from renewable energy by 2020. This was set by the EU as per the Renewable Energy Directive 2009/28/EC. To achieve the overall 16% target, national sub-targets have also been set for heat (12%) and electricity (40%). Ireland will fail to meet its 2020 targets and will face fines in the region of €300 – €600 million as outlined in recent government reports.
Solar is best placed to fill the gap in the short term to assist Ireland in reducing its financial obligations in the event of failure to meet these targets.
Community ownership schemes have been successfully adopted by a few European countries where citizens possessed the required investment. In this context, RESS makes reference to Denmark as the example that Ireland should follow, and provides the Ricardo Report as supporting documentation. According to this report “With changes in the levels of subsidies available in the past 17 years there have been very few new wholly owned community schemes. Prior to 1999 there were some community schemes where the community made charitable donations allowing those affected citizens with limited financial means. Now the move towards citizens investing in shared ownership projects has reversed some of the early community principles about community ethos, working together to allow citizens to in effect only consume green energy.” (sic)
RESS proposes a 20% community ownership model to be offered to all residents living within a 5km radius of a solar development. If 20% investment is not obtained within the 5km radius, then it is extended to the District Electoral Division (DED) and then onto the next etc. This model excludes those who are financially incapable of investing and could result in investment by the next town who are not located nearby the solar development.
All new renewable energy projects are already burdened with an average planning contribution of €10,000 / MW. Elgin Energy recommend that the existing development contribution is administered on a local level to support renewable schemes or local initiatives so that the local communities will see direct benefits from the development.
Elgin Energy believe that a future RESS should consider the impact of proposed developments on the community and financial viability of projects before imposing a 20% local ownership scheme. More appropriate community benefit projects should be considered to benefit every member of the community and not just those who can afford to invest.
RESS proposes a technology neutral auction scheme with the project/technology requiring the highest level of support setting the uniform-price level of support. The proposed auction scheme lacks clarity and ambition. It does not set out clear objectives, timelines, generation capacities or an auction budget.
Elgin Energy recommends Technology-Specific annual auctions, with budgetary caps being implemented. This will encourage diversification of electricity generation and reduce the risk of high prices being set for all projects qualifying for RESS. In addition, it is imperative that any proposed auction mechanism is cognisant of the CRU connection policy and the potential impact this may have on the delivery of future energy projects.
To support the various aims of RESS such as encouraging community involvement, increasing diversity of the fuel mix and ensuring value for money for the end consumer, Elgin Energy proposes the following tiered support system:
You can view our full submission below:
You can view the Public Consultation on the Design of a new Renewable Electricity Support Scheme in Ireland here.