Energy: Ireland’s Climate Action Plan 2019

The following aspects of Ireland’s recently published Climate Action Plan are, in our view, the most significant electricity measures proposed:

Phasing Out Fossil Fuels

• The burning of coal in ESB’s Moneypoint generation plant will end by 2025, and this coal-fired generation will be replaced with low-carbon and renewable technologies

• Bord na Móna have announced that they will transition away from peat by 2028

Harnessing Renewable Energy

• The new Renewable Electricity Support Scheme (RESS) is expected to support up to an additional 4.5 GW of renewable electricity by 2030, while ensuring citizens and communities can fully participate in the future energy transition in Ireland

• The volumes and frequencies of the RESS auctions will be “increased” in order to deliver on the 70% renewable electricity target by 2030

• The first RESS auction is expected to open for applications by the end of 2019. This auction will include a suite of measures for community participation. Terms and conditions will be prepared for second and third auctions to provide a route to market for offshore wind, see above textbox on RESS Auction

• In conjunction with IDA Ireland and the wider sector, effective policy tools will be developed to harness the significant potential of Corporate PPAs to meet at least 15% of Ireland’s 2030 electricity demand from renewable sources. This will be based on input from the industry advisory group established by the SEAI

• At least 3.5 GW of offshore renewable energy (mainly offshore wind), up to 1.5 GW of grid-scale solar energy, and an increase in onshore wind capacity of up to 8.2 GW will be targeted. This will be delivered in a competitive framework of auctions and corporate contracting with a renewed focus on community and citizen participation

• Enhanced interconnection is planned, including the Celtic Interconnector to France and further interconnection to the UK

• Ireland will develop an offshore electricity grid, in tandem with new interconnection

• Ireland will put in place a planning and consenting regime and a grid connection framework for offshore wind that aims to deliver offshore wind projects, including a prioritisation of the passage of the Marine Planning and Development Management Bill and the new consenting model, as well as implementation of a new offshore grid connection policy that lines up with the RESS auction timeframes

Micro-generation

This will enable Irish energy consumers to sell excess electricity they have produced back to the grid. The proposed policy measures, to facilitate this goal, include:

• Putting a support scheme in place for micro-generation by 2021 at the latest, to address technical barriers and planning constraints, establishing a clear grid connection policy, and supporting community participation in micro-generation

• Replacing mechanical electricity meters with smart meters by 2024

• Changing the electricity market rules in early 2020 in order to enable micro-generated electricity to be sold to the grid. This should include provision for a feed-in tariff for micro-generation to be set at least at the wholesale price point

• Design market mechanisms, network tariffs, competitive auctions for renewables and a public service obligation in a way that distributes costs fairly and competitively

• To work closely with enterprise through Energy Obligated Entitites to promote initiatives within communities

Other Measures

• EirGrid’s Delivering a Secure, Sustainable Electricity System (DS3) ancillary services programme will be continued

• The further development of combined heat and power (CHP) will be supported through a range of incentives aimed at encouraging uptake. This includes the Support Scheme for Renewable Heat (SSRH) (which will support the heat output from biomass and biogas high efficiency CHP projects), the RESS (which has the potential to support the electricity output from high efficiency renewable energy CHP plants), and the Climate Action Fund (where the first call for applications included specific provision to support CHP plants)

Conclusion

Central to the electricity measures is the RESS scheme. While the scheme has already been announced by way of a high level design paper, the Climate Action Plan provides useful additional information in relation to the intended scope of the scheme, and a degree of encouragement for developers in the areas that are specifically mentioned, i.e. offshore wind, onshore wind and solar.

What has not been satisfactorily addressed is the relationship between the RESS scheme and alternative means of funding new energy, such as the use of Corporate PPAs. While a stated ambition to develop “effective policy tools” to encourage the use of Corporate PPAs is clearly welcome, it is more difficult to imagine what these policy measures might be, and how they might make a Corporate PPA more attractive than the possibility of support under RESS.

The balance of the measures have generally been announced, in other forums, already.

To discuss these aspects of the Climate Action Plan in more detail, contact a member of our Energy & Natural Resources team.

The content of this article is provided for information purposes only and does not constitute legal or other advice.