RESS-1 Provisional List of ‘Winners’ Announced
Monday, 10 August 2020
On Tuesday, 4 August, EirGrid published the provisional results
of the first auction under the Renewable Electricity Support Scheme (“RESS”).
The provisional list of ‘winners’ includes 63 solar farms
(comprising 796MW of capacity), and 19 onshore wind farms (comprising 479MW of
capacity). All of these projects already hold planning permission and grid
connection offers, meaning the Irish renewables industry is set for a
significant ramp up in construction levels, which will most likely start to
become evident early next year. The successful projects must be exporting power
by 31 December 2023 in order to comply with the RESS Terms and Conditions.
The auction was split into three different pots or categories,
namely: (i) Community (ii) Solar and (iii) All Projects. This ring-fenced category
structure was designed so as to act as a safeguard for community projects and
solar projects when faced with onshore wind farms that may have had a lower cost
advantage when bidding into the auction.
The end outcome is that Ireland should shortly see seven new
community-led renewable electricity projects being added to the electricity
generation mix and that Ireland will finally fall in line with the rest of
Europe in terms of seeing its first grid-scale solar projects being connected
to the Irish electricity grid.
Across the three categories, the average price for successful
projects was €74.08/MWh. Given that many existing Irish onshore wind farms
currently benefit from support of circa €80/MWh under the Renewable Energy
Feed-In Tariff scheme (“REFIT” - the
renewables support scheme that preceded RESS), the RESS provisional auction
results vindicate having a competitive auction process in terms of reducing the
impact on the final electricity consumer via the PSO levy. Furthermore, the solar industry will
undoubtedly point out to any of its sceptics from a price/value perspective,
that this is very real evidence that solar is competitive with wind in Ireland
and can deliver real value for consumers. Indeed, if the decision had been made
to index link the bid prices for the duration of the RESS support, as is the
case with REFIT support, some industry sources have estimated that in the
region of €10/MWh might potentially have been shaved off the average bid price.
Industry eyes will now move to 10 September when the final
results are due to be published. In the meantime, no doubt, the projects
appearing in the provisional list will be looking firmly towards firming up on
existing financing arrangements that were a pre-requisite to competing in the RESS-1
auction and proceeding with appointments of their teams of professional
advisors and contractors.
Some unsuccessful projects may well already be considering the merits of waiting for a future RESS auction (should their respective project consents have the flexibility to facilitate that) or other route to market options e.g. corporate power purchase agreements. The announcement last Friday, 7 August of the CPPA between Facebook and Brookfield, which extends to some Irish renewable assets, is a reminder that RESS is not the only avenue for development stage renewable electricity projects.
In order to view the RESS-1 Provisional Auction Results, please click here.
