The alternative energy requirement programme generally supports new renewable energy based electricity generating stations by allowing developers to enter into guaranteed demand contracts with the ESB for up to 15 years.
The guaranteed revenue streams are sufficient to allow developers to negotiate acceptable terms with debt and equity providers. AER VI aims to complete the current Government target to add 500 megawatts from previously supported technologies by 2005. A further 78 megawatts will be supported for the first time in offshore wind and biomass combined heat and power categories. I took account of the views of the sector in developing the terms and conditions of AER VI resulting in a more favourable approach to indexation of the contract price and an optional front-loading of part of the cash flow.
Last Thursday, I attended the annual conference of the Irish Wind Energy Association and the clear message to me regarding AER VI was that the terms and conditions are sufficient and if I am to change anything I should increase the capacity limits. This reflects significant confidence by developers in the competition. I am confident therefore that the terms and conditions which I have set for the competition are sufficient to ensure that the current target of 500 megawatts is met on time and that the offshore and biomass-CHP options can be properly evaluated.