The new Renewable Energy Support Scheme (RESS) will provide support to renewable electricity projects in Ireland. The scheme will be a competitive auction-based funding mechanism with a primary focus on cost-effectiveness. The RESS-1 auctions are actively targeting between 1TWh – 3TWh of renewable energy that can be delivered ahead of 2022.
Analysis of the proposed scheme by Cornwall Insight Ireland shows that there is an additional incentive for those who can deliver quicker than December 2022. If a project can be operational in time for July 2021, they can earn 1.5 years of additional support from the RESS process as shown below.
Catherine Edwards, Research Analyst at Cornwall Insight Ireland, said:
“As a rule, wind projects take 12 months to finance and a further 18 months for construction making the December 2022 a sensible deadline if the auction is to take place in June 2020.
“If a project developer is confident that they can deliver in time for July 2021, it is possible that this may impact their bidding strategy. If the project could be delivered ahead of schedule, it would receive an additional 18 months of support if the bid was accepted. This bonus could incentivise developers to bid in lower prices.
“Ultimately, lower bid prices could negatively impact other projects which could be ‘outbid’ (undercut) by some of these faster build projects, including solar who are betting on an early delivery date.
“There could be a potential danger for any projects bidding at a low price on the assumption of an extra 1.5 years of support, only to then be unable to deliver their project before the deadline due to circumstances beyond their control.”