RESS 5 ‘is our last chance to bring in wind or solar projects before hefty EU fines for missing our goals kick in in 2030’
The auction – the fifth to take place under the Renewable Electricity Support Scheme (RESS) – is designed to set an energy price for new renewables projects and is the last one that is likely to bring new carbon-free power projects onto the grid ahead of 2030.
RESS 5 – as the auction is called – is likely the last time Ireland can hope to attract new wind and solar projects that can be operational before huge EU fines the country is facing in 2030 for missing renewables targets kick in, warned industry expert Steph Unsworth from Aurora Energy Research.
The signs for the success of the RESS 5 auction are not good, said Unsworth, who is the Ireland lead for the renewable-energy focused consultancy.
Fines from the EU levied against Ireland for missing 2030 targets –of anything between €2bn and €8bn – are “inevitable” but successful delivery of RESS 5 “can bring the fines down”, she said.
“This is the last feasible auction, which is going to bring on capacity by 2030, which means it’s the breaking point for hitting those targets,” she said. “It doesn’t mean that Ireland can’t still reach net zero, but it means things do need to change after this auction if we want to reach net zero by 2050.”
RESS 5, set to take place from August 28 to September 10, is vital to the delivery of the Government’s 2030 decarbonisation targets of 8GW of onshore wind and 9GW of solar PV, which would bring renewable generation as a proportion of demand in the electricity system to 80pc.
But without adjustments to the auction price caps that have been set at previous RESS auctions, Aurora believes the procurement targets are unlikely to be met and RESS 5 will be “another costly auction that will likely fail to meet the targets”.
While Ireland has huge potential for renewables, she said, it is also a very difficult place to develop renewables projects successfully.
“Even when we look back at RESS 1 and RESS 2, which in the grand scheme of things weren’t bad auctions that brought on a lot of capacity, that capacity hasn’t actually been delivered yet. There’s been a lot of withdrawals from those auctions, and we’ve had to extend the timelines as well.”
Grid connections and the planning system have proven extremely difficult for projects, with some developments blocked by judicial review for as long as five years, she said.
“This all just erodes the business case, which means that when people are looking into these auctions they require very, very high prices for projects to prove profitable, due to all of these different issues.”
But Unsworth said that she is optimistic that some of the problems are now being dealt with, even if this is too late to impact the 2030 fines.
“We’re starting to see a lot of reforms people have been begging for. So I think, in a year or two, we could be looking at a much more positive Irish market,” she said.
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