My Department is developing a new Renewable Electricity Support Scheme (RESS) which is being designed to assist Ireland in meeting its renewable energy contribution to EU-wide targets out to 2030. The design of the new scheme has included an extensive independent economic appraisal which compared the cost of supporting a range of commercial renewable technologies including Solar PV at various scales including Utility (farm scale) to ensure that the new scheme delivers value for money for energy users whilst also delivering on the energy pillars of sustainability and security of supply. The assessment included analysis of the optimum financial support mechanisms for renewable technologies, in line with the 2014 EU State Aid Guidelines.
The new scheme will be defined by a series of renewable electricity auctions, where the most cost effective projects within an auction structure will receive financial support in the form of a premium, in addition to the price they receive from the market.
I am aware of the very strong level of interest in solar PV in Ireland and the most recent data available to me indicates that at present, there are 621 solar applications at the distribution level and 37 solar applications at the transmission level, at various stages in the grid connection application process. These applications amount to 4,398 Megawatts and 2,135 Megawatts respectively or 6,533Megawatts in total.
It is widely recognised that solar photovoltaic (PV) technology has become more cost competitive for electricity generation over the last few years, not only compared with other renewables but also compared with conventional forms of generation. Furthermore, a recent report by the the International Renewable Energy Agency (IRENA 2017) forecasts that solar PV costs will continue to fall by a further 50% out to 2020.
Notwithstanding the level of solar applicants seeking connection to the grid and acknowledging that solar PV does have a role to play in Ireland’s energy future, the cost effectiveness of the new scheme is a key policy objective. I cannot stand over a scenario whereby electricity customers are locked into higher prices now for renewable energy as renewable technology costs fall. While increasing diversity of the renewable energy mix is one of several policy objectives the new RESS is trying to deliver, falling technology costs by themselves may lead to increased diversity of the renewable portfolio over the medium term.
Following on from the recent RESS public consultation and review, a final design proposal will be brought to Government for approval in the coming months, including the overall costs and technologies to be supported. A formal application for State Aid clearance from the European Commission will then commence.
At this stage no final decisions have been made as regards which technologies will be supported under the new RESS.