Eighty-two renewable energy projects will benefit after the government confirmed the results of a new Renewable Electricity Support Scheme auction that will subsidise wind and solar electricity.
Minister Eamon Ryan (pictured) claimed the RESS scheme will deliver €1.4 billion in investment and will create more than 1,000 jobs as future auctions add more projects.
Wind farms and solar projects are subsidised through the Public Service Obligation levy (PSO) paid by all domestic and business electricity consumers. For 2020/21, the levy from consumers has been increased to €480m, an increase of over €300m on the 2019/20 PSO levy of €176m.
The levy bridges the gap between what wind farms receive for their output in the wholesale electricity market and a state-mandated ‘reference price’ i.e. a guaranteed price for their output. The PSO levy is soaring because the current reference price for wind of €71 per MHh is way above the current wholesale electricity price of €55 per MWh.
In announcing the RESS-1 outcome, minister Eamon Ryan (pictured) omitted to disclose what the reference price for wind power will be going forward.
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For RESS-1 solar projects the guaranteed price is €104 per MWh, nearly double the current wholesale price. Depending on how the market price evolves in future years, solar projects could receive huge subsidies from electricity consumers.
The wholesale price for electricity has tumbled through 2020 due to an abundance of gas supply for electricity generators.
According to Ryan: "The auction provides us with a platform for rapid deployment of onshore wind and solar projects at scale and at least cost, replacing fossil fuels in our energy grid. The results are very competitive and represent a significant saving on previous support schemes.
“Renewable electricity is a central element of our action on climate disruption, ensuring that we are on a pathway to meet our ambitious climate targets. The RESS scheme not only clearly sets us on that pathway but lays the foundations of a thriving and cost-effective renewable electricity market that supports the growth of the green economy, creates sustainable work opportunities, and ultimately benefits the consumer as renewables become more and more cost-effective.”
The 82 RESS-1 auction bidders have promised to generate 1,470GWh of wind electricity and 770GWh of solar power, involving 160 wind turbines and 1,750 hectares of solar panels.
Full details of the scheme are here and results of RESS-1 are available here.
The frequency of future RESS auctions will depend on the renewable electricity project supply pipeline, but Ryan said that a minimum of four auctions will occur between 2020 and 2025 to deliver on the 2030 targets.
