SEM Chart of the Week
Always sunny in RESS: The gang gets an auction
Senior Consultant (Ireland)
The Renewable Energy Support Scheme (RESS) auctions are fast approaching, with lots of activity from the DCCAE, EirGrid and the industry at large. By June 22nd it will all be over and the auction winners will be busy getting to grips with the contracts they’ve secured.
With the excitement around the potential for a rejuvenated renewable market, it is easy to overlook just how few projects could get a RESS contract at these auctions. With between 1000GWh – 3000GWh available, the competition could be high.
In this week’s SEM Chart of the Week, I take a look at the size of the overall pot, and what the various carve outs could mean for the participants.
A, B and C strike plan
A key feature of the design for the RESS auctions is the carve outs or “preference category” for a number of key areas:
- Community projects
- Solar projects
- All other projects
The merits for splitting up the bid stack into different preference areas are best covered in a research paper, but the principle for individual pots has been shown 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. There is a 30GWh, which equates to just under 10MW of wind, cap on the community preference category, with a 5MW capacity cap per project. This effectively means that the entire pot could be taken by 2 small projects.
The headroom for project though won’t just impact on the community developers, with the all projects group also jostling for limited capacity.
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. Although this sound reasonably high it does only equate to about 196MW of installed wind capacity.
The nightman cometh
The prospect of all the capacity being taken by a small number of projects exists, if the auction settles at the lower end of the available volumes. If this occurs, and only 1000GWh of volume is successful in the auction, the all projects category where if it were all to be taken by wind it would equate to 196MW worth of capacity.
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.
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