I propose to take Questions Nos. 72, 116, and 138 together.
The Green Paper on Sustainable Energy 1999 established a target to add 500 megawatts of new renewable energy based electricity generating plant to the electricity network by 2005. The initial implementation programme planned to support this target by allocating support contracts under AER V and VI of the alternative energy requirement, AER, support programme. The 500 MW had EU State aids clearance prior to the commencement of AER VI.
The AER VI competition included an offshore wind category for the first time. It was decided following a study conducted by Byrne O'Cleirigh on behalf of Sustainable Energy Ireland, SEI, that support would be offered for two 25 megawatt demonstration projects. The cost of electricity produced from offshore plants supported by AER VI will impose a higher charge per unit on consumers than the onshore equivalent. Support was also proposed for up to 28 megawatts of biomass powered combined heat and power, CHP, plant. Both the offshore wind and biomass CHP categories were subject to State aids clearance from the EU Commission. State aids clearance does not exist for any further capacity in these categories and, therefore, I will not be offering any additional offshore wind contracts.
When the results of AER VI were announced in July of 2003, it was also indicated to the market that support would be offered for an additional 140 megawatts above the original 500 megawatts target again subject to State aids approval. My Department applied to the European Commission for the necessary approval at that time. However despite ongoing correspondence with the Commission it was not until August of this year that the additional capacity was cleared and not until September that my Department was notified of this clearance.
My Department's role in the AER support programme is to design and administer each AER round and to select the successful applicants. The associated formal contracts, in the form of power purchase agreements or PPAs, are issued by ESB customer service. However, ESB customer service will not be in a position to execute the PPAs until a related order under section 39 of the Electricity Regulation Act 1999 is published.
It was not possible to progress a draft order to conclusion in advance of the Commission State aids decision and any special conditions which might arise. The draft order is now at an advanced stage of preparation and I will announce the allocations, by category and by applicants, of all remaining unallocated AER VI support very shortly.
Each successful applicant in AER VI will have ongoing obligations to my Department to comply with the published terms and conditions of AER VI and to ESB customer service to comply with the terms and conditions of the formal contracts.