Dáil Éireann Debate, Thursday - 16 July 2015
797. Deputy Michael Moynihan asked the Minister for Communications, Energy and Natural Resources the approximate cost of introducing a renewable heat incentive, which his Department plans to bring online next year; if he has considered including any project installed from the date the initiative is announced to retrospectively qualify once the initiative opens; the approximate cost of this; and if he will make a statement on the matter. [29963/15]
View answerThe 2009 EU Renewable Energy Directive set Ireland a legally binding target of meeting 16% of our overall energy requirements from renewable sources by 2020. To meet this target, Ireland is committed to achieving 40% renewables in electricity, 12% in heat and 10% in transport.
Measures currently in place, including Part L of the Building Regulations and the combined heat and power supported under the REFIT 3 scheme, are expected to increase the uptake of heat from renewable sources. However, analysis by the Sustainable Energy Authority of Ireland (SEAI) suggests that in the absence of further measures a shortfall in the region of two to four percentage points could emerge in the renewable heat sector. This would represent between one and two percentage points in terms of the overall renewable energy target. While the cost of such shortfall has yet to be established, the SEAI has estimated that it could be in the range of €100 million to €150 million per percentage point shortfall. This means that a shortfall in the heat sector could cost between €200 million and €300 million in renewable energy credits. There could also be penalties associated with any shortfall.
Analysis underpinning the Draft Bioenergy Plan indicates that an additional bioenergy focussed measure in the heat sector would represent the most cost effective means of meeting a number of different policy goals including addressing the potential shortfall in our renewable heat levels. The draft Plan recommends the introduction of a Renewable Heat Incentive (RHI) to incentivise larger heat users in the industrial and commercial sector to change to heating solutions that produce heat from renewable sources.
The initial public consultation on the RHI is being finalised. One of the considerations in preparation of this document is how best to support continuing investment in the renewable heat sector whilst the RHI is being consulted on. Any arrangements will be subject to budgetary and state aid approval. Ultimately the cost of the scheme and any retrospective application will be a function of the design of the support scheme and the scale of supported installations. This will be identified as the design of the scheme develops through the consultation process.
