Ireland confirms revamp of rules for renewable energy auctions

The move represents a significant shift in policy after previous auctions had used a ’pay-as-bid’ format ranking projects by price until the required aggregate generation capacity had been achieved.

Now, however, following a consultation process, interested parties will also need to prove they are eligible to take part by demonstrating due diligence with EU responsible business conduct standards, robust cyber and data security protocols, and their ability to deliver on their renewables projects on time and in full.

Matthew McMurray, an energy sector expert with Pinsent Masons in Belfast, said the announcement would bring clarity for companies looking to take part in future auction rounds.

“The consultation response provides a clear policy direction for future auction rounds,” he explained.

“In order to maximise chances of success in the auctions, participants will need to have a good story to tell around resilience and energy system integration. Thought should be given to the possibility of deploying hybrid generation and storage to ensure that participants are seen as part of the solution rather than contributing to already high levels of dispatch down.

“That said, the response also raises a number of significant questions in relation to eligible technologies, participation for projects under 10MW and compensation for unrealised available energy. The market will be keen to comment on these points in upcoming consultations.”

Ireland’s Department of Climate, Energy and the Environment confirmed the changes would be implemented into the renewable energy support scheme (RESS) process as part of the country’s implementation of EU net-zero laws.

The DCEE said it was introducing the changes from RESS 6 onwards, without any phased introduction process, in order to ensure consistent treatment for bidders going forward.

Following the consultation the DCEE said it would be introducing technology-specific auction pots for eligible technologies in future RESS auctions, in a move aimed at preventing a single technology from dominating auction proceedings and ensuring a broader range of renewable energy systems bid during each round. 

This approach will also mean the evaluation correction factor allowed in previous bids will be removed from the process in the future, although what technologies will be permitted, and how different pots interact, has yet to be fully determined.

Demonstrating the resilience of bidding renewable energy systems will be an award criteria for obtaining a contract, the DCEE also confirmed, with strict requirements over areas such as supply chain materials to keep bids in line with EU requirements. The weight of resilience and how well the option integrates into existing energy supply lines such as through hybrid or storage-based designs will be calculated ahead of the next auction round, it added.

The Irish government is still to make a decision on some factors after the consultation, including exemption from the requirements for projects with a capacity under 10MW, and how compensation for unrealised available energy would be handled – with further consultations to come on these areas.

Charlotte Gourley, an energy policy expert with Pinsent Masons, said the decision had set out a clear path for future RESS auctions.

“Projects that can show resilient supplychain practices and offer system solutions - especially through storage - will be in a stronger position to succeed,” she said. “Some decisions remain outstanding, such as on the treatment of smaller projects and the future role of Unrealised Available Energy Compensation. However, the direction of travel is clear: nonprice factors will now play a meaningful and consistent role in upcoming auctions.”