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Alternative Energy Projects

Dáil Éireann Debate, Wednesday - 23 May 2012

Wednesday, 23 May 2012

Ceisteanna (160, 161)

Kevin Humphreys

Ceist:

161 Deputy Kevin Humphreys asked the Minister for Communications, Energy and Natural Resources the action that has been taken on the recommendation of the National Competitiveness Council in the Ireland’s Competitiveness Challenge 2011 report to revise the REFIT scheme to phase out price supports for onshore wind projects; and if he will make a statement on the matter. [25812/12]

Amharc ar fhreagra

Freagraí scríofa

The feed in tariff or REFIT scheme underpins investment in renewable energy to meet Ireland's legally binding renewable target, by providing sufficient certainty to developers to finance projects through the guarantee of a minimum price for wind exported to the grid over a 15 year period. Such schemes are common across EU Member States.

The original REFIT scheme for which state aid approval was obtained in 2007 has supported a significant expansion in wind energy in a relatively short period. In March 2012, my Department launched the next phase of the REFIT scheme for onshore wind, known as REFIT 2.

While similar in many respects to the first scheme, some dimensions of the scheme have been re-designed to ensure support costs continue to be cost efficient. Under REFIT 2, when the electricity market payment exceeds the combination of the REFIT reference price plus balancing payment, no payment from the Public Service Obligation levy is made under the scheme. Currently the average market payment in the Single Electricity Market is broadly similar to or slightly higher than the REFIT reference price.

The structure of REFIT 2 means that if the market payment rises above the REFIT reference price plus balancing payment due, for example, to high fossil fuel prices, there is no support cost for wind on the system under the scheme. Conversely, at times when a large amount of wind is available on the system, the wholesale electricity market price is reduced meaning that consumers pay less for all electricity. The ESRI and the Commission for Energy Regulation (CER) have demonstrated that wind provides a useful hedge against high fossil fuel prices.

To be eligible for the REFIT 2 scheme, projects must be built by 31/12/15. No decision has been taken as to what, if any, support scheme will apply to onshore wind projects after that date. The costs of developing onshore wind will be kept under review as the technology continues to mature over the next number of years. In compliance with the third International Energy Market Directive, the structure of the all island electricity market will require change. Decisions on how renewable energy development will be encouraged in future will be taken in the context of developing the new electricity market structure.

Kevin Humphreys

Ceist:

162 Deputy Kevin Humphreys asked the Minister for Communications, Energy and Natural Resources the action that has been taken on the recommendation of the National Competitiveness Council in the Ireland’s Competitiveness Challenge 2011 report to support emerging energy renewables technologies such as wave, tidal and offshore wind, with funding mechanisms through research and development rather than price support mechanisms such as REFIT; and if he will make a statement on the matter. [25813/12]

Amharc ar fhreagra

There are no feed in tariff schemes in place for offshore wind, wave or tidal energy technologies. The Government decided earlier this year to encourage the development of offshore wind as an export opportunity rather than as a contributor to the domestic electricity market and therefore a feed in tariff support mechanism is not being introduced for offshore wind. Wave and tidal technology is still at the RD&D stage globally and is not yet a commercially viable technology. There is no electricity from wave or tidal sources being exported to the Irish electricity grid, hence a feed in tariff would not be payable at this stage in any event and any such support scheme would be subject to Government and State-Aid approval. I have no plans to bring forward such a proposal. The Ocean Energy Development Unit in the Sustainable Energy Authority of Ireland (SEAI) administers the R&D support programme for wave and tidal technologies. To date, 33 wave and tidal projects have received funding from SEAI under the Prototype Development Fund.

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