From Department of the Environment, Climate and Communications
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The Minister for the Environment, Climate and Communications, Eamon Ryan, today announced the provisional results of the fourth Renewable Electricity Support Scheme (RESS 4) auction.
Following on from the success of the previous three auctions, RESS 4 has provisionally procured over 2GWh (2,071 GWh), enough to power up to half a million homes. This is a significant boost to Ireland's target of 80% renewable electricity by 2030, as set out in the government's Climate Action Plan 2024.
Speedy delivery of onshore renewables this decade is critical to Ireland's energy security and reducing energy costs to homes and businesses by ensuring that the roll-out of onshore wind and solar farms keeps pace with the growth of our economy.
The further development of renewable energy projects will stimulate local economies and attract investment. Renewable energy, particularly wind energy, is already making a significant contribution to communities across Ireland through job creation, community benefit funds, and revenue to local authorities, that can be reinvested in local communities and services.
Key aspects of the results:
The RESS 4 results compare well with other recent renewable energy auctions in Europe in terms of volume procured and auction prices when adjustments for scheme specific designs are accounted for (indexation, contract length, and so on). The provisional results of the RESS 4 auction can be viewed here.
New risk provisions have been introduced in RESS 4 to shield both developers and consumers. Design changes have been made to reduce potential risks and any associated risk premiums, for example System Operator delay or Judicial Reviews. This will also ensure the greatest value for the electricity consumer.
Minister Ryan said:
"Accelerating delivery of renewable energy will help to protect Irish households and businesses from high fossil fuel prices. To ensure that prices for Irish households and businesses continue to fall in future RESS auctions, we need a stronger pipeline of onshore wind and solar energy projects coming through our planning system and connecting to our grid.
"The provisional results of the fourth onshore Renewable Electricity Support Scheme (RESS) auction will help maximise the volume of renewables connecting to the electricity grid at the lowest cost to the consumer has proven to be a success.
"The average auction price of €96.85 per MWh is lower than both RESS 2 and RESS 3 and the auction has secured a significantly higher volume than RESS 3. The RESS annual auction programme has attracted major international investment into Ireland, creating sustainable employment and delivering for our communities and local economies.
"Ireland's future prosperity lies in renewable energy and, as a country, we are ambitious. Our ambition will create an energy-independent Ireland, with a stable electricity supply at a stable price. Delivering on our ambition through RESS and other policy measures will create tens of thousands of new green jobs for communities across the State and attract investment."
Onshore wind is the cheapest deployable renewable energy generation technology in Ireland in the medium term and is a critical enabler of Ireland's ability to attract investment and maintain competitiveness over the next decade. This is reflected in the RESS 4 auction results. Utility scale solar has a strong role to play is diversifying our energy supply and supporting wind in our renewable energy mix and the RESS scheme continues to attract a strong pipeline of solar projects.
Analysis by the Economic and Social Research Institute (ESRI) suggests that early delivery of onshore wind this decade will drive down wholesale electricity prices by up to 10%, supporting Ireland's competitiveness and investment offering attracting foreign direct investment (FDI). Design changes were made to RESS 4 to mitigate against a number of risks for developers, to ensure delivery of greater value for the electricity customer. This, in combination with technological advancements have significantly reduced the cost of onshore wind and solar energy.
As announced by the Sustainable Energy Authority of Ireland (SEAI), Ireland has achieved an unprecedented decrease in energy-related emissions with a 7.6% annual reduction last year, and a 21% decrease in electricity-related emissions. This is despite a large increase in population and energy use. This reduction is directly due to the recent boost in wind and solar renewable electricity generation and increase use of imported electricity through interconnectors to Great Britain and Northern Ireland.
Accelerating the deployment of renewable energy generation, especially onshore wind and solar this decade, is fundamental to meeting our sectoral climate targets. In 2023, our coal use was down by 50% and oil use was down 80% in the electricity sector. Coal will be phased out by the end of 2025.
The Community Benefit Fund (CBF) scheme established in RESS 1 has been maintained in RESS 4. The CBFs require generators to pay €2 per MWh generated annually to funds for communities living in nearby for the duration of the support scheme. The funds will support local community initiatives and sustainable development goals.
ENDS
The Renewable Electricity Support Scheme (RESS) received EU state aid approval in July 2020. The current scheme is approved to end 2025. RESS competitions post-2025 will be subject to further State Aid approval from the European Commission.
The RESS is a product of both independent economic analysis and public participation and consultation. The development of RESS has included an in-depth review of international best practice, across the UK, Denmark, Spain, Germany, Canada, and Scotland – world leaders in the integration of renewable electricity generation.
While RESS 4 has seen an increase in the volume of wind projects taking part and being successful in the auction, the number of wind projects remains relatively low primarily due to planning bottlenecks and judicial reviews being initiated against projects.
There is an urgent need to align county and city development plans with national targets for onshore renewable energy, particularly for onshore wind, to avoid undermining investment and slowing down the pace and scale of delivery needed to decarbonise the economy and provide a secure and affordable electricity supply to households and businesses. The inclusion of Regional Renewable Electricity Targets in the draft First Revision of the National Planning Framework is a welcome and critical step towards achieving Ireland’s national renewable electricity targets and supporting Ireland’s competitiveness and investment offering in attracting Foreign Direct Investment.
The homes powered estimate reflects the equivalent number of homes that could be powered based on an estimate of the annual generation from the capacity procured in RESS 4 and the average Irish household consumption as noted by the Commission for Regulation of Utilities (CRU).
The success of RESS auctions depends on the renewable electricity projects supply pipeline, their participation in the auction, along with evolving market, locational and technological considerations. Maintaining a continuous flow of projects – 'a steady drumbeat', helps to balance the delivery of projects year-on-year to support the connection of renewable energy projects to the electricity network by EirGrid and ESB Networks and provides a level of predictability for the industry and investors.
This is the fourth of a minimum of five envisaged auctions to occur between 2020 and 2025 which will deliver on the 2030 targets. The design of further planned RESS auction rounds post-2025 will be subject to state aid approval. The RESS provides pathways for renewable developers to plan and develop their projects. It will also allow Ireland to take advantage of new technologies as they emerge. Offshore wind projects can participate through dedicated offshore auctions.