Lack of headroom in RESS will see projects jostle for limited capacity
Analysis from Cornwall Insight Ireland shows what impact the preference category carve-outs mean for participants. With just 30GWh available to community projects, equating to just under 10MW of wind capacity the entire pot could be taken up by two small projects of 5MW each.
The upcoming Renewable Energy Support Scheme (RESS) has caused excitement across the industry and with between 1000GWh - 3000GWh available, the competition could be high. A key feature of the design for the RESS auctions is the carve-outs or "preference category" for several key areas: community projects, solar projects and all other projects.
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Analysis from Cornwall Insight Ireland shows what impact the preference category carve-outs mean
for participants. With just 30GWh available to community projects, equating to just under 10MW of wind capacity the entire pot could be taken up by two small projects of 5MW each.
If the solar and community preference categories take up their full allocation, this could leave the rest of the renewable industry battling it out over as little as 670GWh, in a worst-case scenario.
James Goldsmith, Senior Consultant at Cornwall Insight Ireland, said:
"The merits for splitting up the bid stack into different preference areas could be disputed, but the principle has been shown to be effective in other renewable subsidy schemes across Europe. For community-led projects, the preference category is to be welcomed, but the lack of headroom within it means that it could be extremely challenging to walk away with a contract from the RESS auctions.
"The lack of auction headroom for projects won't just impact on the community developers, with the ‘all projects' group also jostling for limited capacity. The worst-case scenario for the renewable industry would leave 670GWh available in the auction if the solar and community projects take up their full allocation. This sounds reasonably high on the face of it; however, it does only equate to about 196MW of installed wind capacity.
"If the auction settles towards the lower end of the available volumes, the prospect of all the capacity being taken by a small number of projects exists. If this occurs, and only 1000GWh of volume is successful in the auction the all project category could be taken by just a couple of projects.
"While the prospect of RESS starting is great news for the renewable industry as a whole in Ireland. The outcome of the results might leave a lot of companies hungry for more and quickly."
-Ends
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