Out-Law News 1 min. read

Irish government urged to progress renewables support scheme

Urgent action to progress a proposed renewable energy support scheme is needed by the Irish government if it is to avoid an investment hiatus, an expert has said.

Addressing the Irish Renewable Energy Summit, energy expert Richard Murphy of Pinsent Masons, the law firm behind Out-Law.com, said that high-level plans for the renewable electricity support scheme (RESS) were published by the government in July 2018. However, these plans have not yet been expanded on, despite the closure of the scheme's predecessor, the renewable energy feed-in tariff (REFIT) scheme.

Murphy said that it was time for the government to "fill in the blanks" on the proposed scheme.

"With the last of the current REFIT-supported projects seeking to be connected before the support deadlines, investors need clarity on key points of detail on the successor RESS scheme to ensure that the next wave of renewables development comes through in Ireland in a timely manner," he said.

"The high level design stage of the new framework was published last July, with an industry expectation that more detailed elements would be published over the subsequent months, however that has been in short supply. Policymakers must fill in considerable blanks to give confidence and certainty on returns, otherwise investors will look elsewhere," he said.

RESS is a model for delivering more of Ireland's electricity needs through renewable sources, and is part of the country's efforts to meet its EU obligations for the amount of electricity supplied by renewables.

The basic framework of the scheme is similar to that of the UK's contracts for difference (CfD) mechanism, under which businesses compete for support through a series of auctions. The Department of Communications, Climate Action and the Environment (DCCAE) said in July that it anticipated that the first auctions would take place in 2019, but the terms and conditions and exact design of the scheme have not yet been finalised. The final scheme must also be submitted to the European Commission for state aid approval.

Murphy explained that the scheme was "significantly different" from its predecessor, with the onus for project discipline and deliverability resting with the generator.

"The legal architecture to introduce a CfD mechanism is extensive, so it is imperative the department speed up the preparatory work if we are to avoid a damaging hiatus in the development pipeline," he said. "However, given that the outline proposals are based on similar principles and structures as that of the UK model already in operation there is scope for significant policy transfer."

Murphy said that Pinsent Masons, as an international firm, had "experience" of the UK scheme having been deployed "with considerable success".

"Either we look towards best practice elsewhere or we publish our own proposals, but it is time to move from concepts to contracts with the RESS scheme," he said.

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