Slow and steady wins the CPPA race in Ireland

The Corporate Power Purchase Agreement (CPPA) market in Ireland is being targeted by the government as a viable route to help achieve its 2030 renewable energy targets. The Irish government has set out a goal of 15% of renewable electricity directly contracted to corporates by 2030.

The latest insight paper from Cornwall Insight Ireland – The dawn of corporate PPAs in Ireland? – assesses whether market conditions are right for continued CPPA growth to be able to meet the ambitious targets laid out by the government.

Key findings of the report are:

  • The building blocks to create a thriving CPPA market in Ireland exist
  • Barriers surrounding complexity and price have caused a slow start for CPPA activity
  • Many developers are awaiting the finalisation of the Renewable Electricity Support Scheme (RESS)

James Goldsmith, Senior Consultant at Cornwall Insight Ireland, said:

“Ireland possess the fundamental building blocks for a sustained CPPA market to develop. The presence of environmentally conscious corporate buyers, an active renewable energy development community and relatively few legislative hurdles should make for a significant churn of deals flowing through.

“The market has been slow off the starting line with any promising activity seen lacking follow through to signed deals. This is no surprise due to the complex nature of these arrangements meaning a lot of time and effort by all parties is needed. However, as more deals are established, a standard format could potentially develop, smoothing out the process and time involved and provide an opportunity for smaller players to get involved.

“Pricing is key to bringing a CPPA to a close. It is likely that until the Renewable Electricity Support Scheme (RESS) auction parameters are known, developers will be slow to enter into a CPPA. To do so may leave them frozen out of a potentially more lucrative government-backed contract that carries less risk.

“In the meantime, however, recently developed assets are unlikely to be priced competitively enough to tempt CPPA deals to come through. It is much more likely that existing assets coming out of Renewable Energy Feed-in Tariff (REFIT) subsidy arrangements, could agree a CPPA deal with a view to re-powering further down the line.”