Minister Ryan announces launch of third onshore Renewable Electricity Support Scheme (RESS 3)

• Government approves key design features of the third onshore Renewable Electricity Support Scheme (RESS 3) auction
• Significant volume of new renewable electricity generation expected to be procured

The Minister for the Environment, Climate and Communications, Eamon Ryan TD, has announced details of the third Renewable Electricity Support Scheme (RESS 3) auction, which has received Government approval.

The RESS is an auction-based scheme, which invites renewable electricity projects to bid for capacity and receive a guaranteed price for the electricity they generate. 

Delivery of the third onshore RESS auction is one of the key actions set out in Climate Action Plan 2023, launched by the Government in December 2022. Climate Action Plan 2023 sets out targets, measures and actions across every sector to ensure that we meet our commitments under the new climate action legislative framework.

The goal of generating 80% of our electricity from renewable energy by the end of the decade will contribute to Ireland’s greenhouse gas (GHG) emissions reduction targets by substituting primarily wind and solar electricity generation for fossil fuel electricity generation, as well as displacing emissions in other sectors, for example, through the electrification of car transport and residential heat.

Minister Ryan said:

“Today, I am announcing the details of the third onshore auction under the Renewable Electricity Support Scheme. Ireland remains heavily reliant on fossil fuel. We must radically reduce this dependence and make the transition to cleaner, indigenous renewable energy. Increased renewable energy will insulate Ireland from the volatility of international gas and carbon prices, which are near an all-time high.

“We are exiting from generating electricity from peat and coal and moving to clean, renewable sources of power, like wind and solar. RESS is one of the primary policies set out in the Programme for Government and the Climate Action Plan to address Ireland’s climate challenges over the coming years.

“The RESS programme and the launch of the third onshore auction will be a major step in meeting the Government’s ambition of reducing emissions by 51% by 2030 and delivering 80% renewable electricity by 2030. The RESS auctions are part of a broader programme to accelerate the deployment of renewables and have been designed to deliver on our commitments to decarbonise our electricity grid, harness our natural resources and bring renewable energy into the heart of our communities.

“Climate Action Plan 2023 recognises the need for transformational policies, measures and actions that are needed to meet the electricity sector’s carbon budget programme and sectoral emissions ceilings. This includes facilitating large-scale deployment of renewables. This will be critical to decarbonising the power sector. It will enable the electrification of other technologies and remove our dependence on fossils fuels, and the associated exposure to high market prices.”

Broadly similar design to RESS 1 and RESS 2

The structure of first two auctions was largely supported by stakeholders. The key design principles from RESS 1 and RESS 2 have been maintained — to ensure high project delivery rates and competitive outcomes.

The Government has approved the proposed elements of the RESS scheme, which are consistent with the state aid approval for RESS auctions through to 2025.

Community benefits

The obligatory Community Benefit Fund (CBF) scheme established in RESS 1 has been maintained in RESS 3. The CBFs will generate a significant volume of capital for communities living in close proximity to renewable projects each year for the duration of the support scheme. These will support local community initiatives and the Sustainable Development Goals (SDGs).

Community participation

The Community projects preference category will be removed from RESS 3. Support for communities for the development of renewable projects will now transition to the non-competitive Small-Scale Generation Scheme (SSGS), which is due to be launched later this year. This scheme will align more closely to the capacity of the community energy sector, thus ensuring a more sustainable delivery of the renewable energy community target of 500MW by 2030.

Key changes:

• introduction of a new provision to significantly de-risk RESS participant exposure to uncertainty surrounding curtailment and oversupply.
• introduction of a limited form of indexation on the operation and maintenance element of projects.
• changing the eligibility criteria to only allow projects in receipt of a letter of offer for a grid connection to take part in the auction. This will minimise the risks associated with projects speculatively bidding in the auction and the consequent significant risk to project delivery.

EirGrid has published the provisional auction timetable on their RESS project site. This will be updated later this month and the final terms and conditions will published on the Department’s RESS site. Participation in the auction is set to open in May.

It is anticipated that RESS 3 will deliver in the range of between 2,000GWh and 3,500GWh in renewable electricity generation across 2026 and 2027. The Department is committed to frequent auctions and an acceleration of the connection of new renewables to the grid.

Further information is available on www.gov.ie.

The Renewable Electricity Support Scheme received EU state aid approval in July 2020.

The RESS is a product of both independent economic analysis and public participation and consultation. The development of RESS included an in-depth review of international best practice across the UK, Denmark, Spain, Germany, Canada and Scotland; world leaders in community-led renewable electricity projects.

RESS auctions

The frequency of future RESS auctions is dependent on the renewable electricity project supply pipeline along with evolving market, locational and technological considerations.

This is the third of a minimum of five envisaged auctions to occur between 2020 and 2025 that will deliver on the 2030 targets. This will provide pathways for renewable developers, including offshore wind projects through dedicated offshore auctions, to plan and develop their projects. It will also allow Ireland to take advantage of new technologies as they emerge.

An updated roadmap of future auctions was published in April, which sets out the indicative timelines and volumes for auctions over the coming decade and provides clarity for developers in relation to when they need to have their projects ‘auction ready’.

Increasing technology diversity

As technologies such as solar and storage mature, and costs decrease, Ireland will be able to take advantage of falling costs of technology throughout the next decade, which in turn will lead to greater diversification of its renewable and flexibility portfolio.