Revealed - new renewable energy scheme to launch this year

At this crucial juncture for agriculture, the need for the Government to design a viable renewable energy scheme that allows farmers to diversify their income has never been greater. This responsibility now rests with the Department of the Environment, Climate, Communications and Transport. However, after years of eager anticipation, we now have a clearer picture of how the new Small-Scale Renewable Electricity Support Scheme (SRESS), currently being designed by Minister Eamon Ryan’s department will do that. The cabinet recently signed off on the high-level design for the SRESS, giving us an insight into how the scheme will work. This article will answer some of the key questions about the new scheme, the first phase of which has already been launched.

What is the SRESS?

The aim of the SRESS is twofold. First, the scheme will support larger non-domestic users of electricity, such as farms, public buildings, commercial and industrial entities, to install larger solar PV systems on their premises to produce their electricity.

Secondly, the scheme will finally provide a route to market for renewable electricity projects which are designed solely for exporting electricity to the grid and getting paid.

Under the scheme, farmers will be able to develop projects from 50kW up to 6MW. The scheme appears to be primarily targeted towards solar, although other technologies will be allowed.

The document states the SRESS will be a key measure in achieving the 2023 Climate Action Plan target of up to 5GW of solar PV by 2025 and 80% renewable electricity by 2030.

How will this scheme work?

The new scheme will have the option of two support mechanisms depending on the scale and nature of the project. These include a grant or long-term feed-in tariff which will be delivered in three phases.

Phase one: the self-consumer’s category

The first phase of the scheme provides capital grants for solar PV systems for businesses, public buildings, sports clubs, community organisations and farmers. The electricity must be used on-site, with only excess electricity to be exported. Grants are available for systems between 50kW and 1MW up to a maximum of €162,600.

Phase two: community and SME export projects up to 6MW

Phase two will support export projects between 1MW and 6MW which are developed by community groups or SMEs. The phase will also support export-only projects below 1MW, ie those which haven’t availed of a capital grant.

Support will be in the form of a two-way floating Feed-in Premium (FiP) tariff for the entire duration of the scheme, 15 years. Unlike large-scale projects which are participating in the Renewable Electricity Support Scheme (RESS), there won’t be a competitive auction to secure the tariff.

Support rates for this category will be determined in the final terms and conditions of the scheme due to be published by the end of 2023.

The support rate will be provided for the scheme lifetime, with successful applicants receiving a premium on the market revenues which they receive for their renewable electricity.

Phase three: all categories tariff support from 2025

It is intended that all categories of applicant, including renewable self-consumers from 50kW to 1MW, will be supported via a feed-in tariff post-2025. By then, tariff supports are expected to represent better value for money than capital grants, as electricity retail prices are expected to have returned to nearer their historical norms.

What is meant by a two-way floating FIP?

The SRESS support for export-led projects will be in the form of a two-way floating FIP. This means that renewable generators will receive a top-up when electricity prices are low to bring them to an agreed price. This top-up will be funded through the Public Service Obligation (PSO) fund. However, when electricity prices are high, the applicants pay the difference between the price they receive and the agreed price back to the State. This is facilitated through an electricity supplier. What technologies are eligible? The scheme will provide opportunities for multiple technologies, aiming to deliver diversity in both the number and types of projects. It is anticipated that the majority of applications will be solar PV installations however. Although the scheme does not propose targeted support for electricity storage technologies, it does suggest that hybrid projects incorporating battery storage will be eligible for support. What about planning permission and grid connection? In order to be eligible for the SRESS support, applicants must have a full grid connection offer and, where planning exemptions do not apply, full planning permission.

Community aspects of the SRESS Community support is a major focus of the SRESS. The development of the scheme aims to provide certainty and market access for community projects, as they might face challenges in the competitive RESS auction process.

Next steps The Climate Action Plan sets a target of launching the SRESS in quarter four of 2023. Terms and conditions, which will outline obligations and tariff levels for applicants, are set to be published later in the year.

Comment

This scheme needs to deliver a lot for farmers, and we’ll bring you more details as soon as we have them. Importantly, farmers need to have access to the same commercial renewable opportunities as their counterparts in Northern Ireland, Britain, and throughout Europe. The chance to diversify a farm’s income, while contributing to Ireland’s green energy security, just makes sense. There are very real challenges for commercial projects such as planning, grid connections, and finance, but the SRESS is the first step in the right direction.