Ireland Designing New Renewables Support Scheme, Discusses Best Auction Approach

Ireland’s Department of Communications, Climate Action and Environment (DCCAE) is running the final public consultation on the development and design of a new renewable energy support scheme, with the consultation period closing on 10 November. 

The new support scheme is being designed to contribute to Ireland’s 2020 renewable electricity targets and to deliver Ireland’s renewable energy ambitions out to 2030.

The consultation documents discuss both technology-neutral auction process and multiple auction categories, where emerging or nascent technologies such as solar PV or offshore wind may require separate auctions. In case of the latter, competitive bidding would be in place.

If an approach of separate auctions for some of the technologies is taken, the document on the support scheme design options recommends that each additional auction category should be based on competitive bidding with technologies eligible for each auction category competing against each other on an equal footing to receive support.

However, an economic study that DCCAE published as part of the public consultation says that a separate support mechanism for offshore wind may not be necessary. Specifically, the economic analysis states that the range of offshore wind costs are expected to overlap with that of onshore wind, with the sector having a potential to become competitive.

According to Stephen Wheeler, Managing Director of SSE Ireland, a technology-neutral approach would put Ireland’s aim of meeting its 2020 renewable energy target at risk, as technologies such as onshore and offshore wind would be competing against each other “on a pure cost-per-MWh basis” while offshore wind can deliver larger scale of future renewable energy capacity. In a piece published by Irish Independent, Wheeler makes a case for a specific auction category in the new renewable energy support scheme that would create an investment environment for offshore wind energy.

“By providing a specific auction category in the new renewable energy support scheme from the very outset for offshore wind, policymakers will provide the clear signals and mechanisms necessary to stimulate the investment required to continue to meet our low-carbon ambitions,” Stephen Wheeler writes.

“Achieving our ambitions will not be based on a single technology solution, but by creating the policy environment that supports a diversified mix of technologies that can deliver large-scale renewable power,” he further adds.

When it comes to the development process of Ireland’s new renewable energy support scheme, it is not focused on setting a new target for renewable electricity generation. The emerging scheme is highly flexible and can respond to market-driven outcomes and take advantage of maturing technologies, DCCAE states, adding that the new scheme will allow the Irish Government to control both the costs and the level of the renewable energy ambition.

According to DCCAE, the scheme is being developed in a way that can support a range of ambitions. This includes the potential objective of maintaining the target 2020 level of 40% of electricity being produced by renewables out to 2030 as the baseline ambition, with more ambitious potential objectives of 45%, 50% and 55% also being examined.

Offshore WIND Staff