Specific Details
Renewables Submission - Budget 2019
Intended results
To highlight that IFA sees a role for farmers in achieving the targets set down in the EU Energy Directive which mandates Ireland to achieve 16% of our energy requirements from renewable sources, by 2020.
That farmers could achieve these targets through farm-scale, community or farmer-led Renewable Electricity Projects (REE) projects.
That IFA's proposals for REE projects would be taken on board as follows:
* Feed-In Tariffs - proposed price support bidding process put forward by the Department of Communications, Climate Action and Environment is not suitable for REE projects. Such projects would not have the economies of scale to successfully compete in a competitive bidding process.
In order to deliver on Government’s ambition of promoting economic development and supporting community and citizen participation in the transition to a low carbon economy it is essential such projects are not part of the competitive bidding process. A guaranteed Feed-In Tariff must be delivered. The generation Feed-In Tariff should be 17c/kWh, guaranteed for 20 years and linked to CPI. An increased generation Feed-In Tariff for roof mounted solar projects, should also be introduced.
* Technology specific base price
Current renewables policy supports a least cost and technology neutral approach to the delivery of renewable energy in Ireland. This is not compatible with Government’s energy policy objective of broadening and diversifying the renewable technology mix and cannot be achieved if there is a continuation of the least cost strategy, which has resulted in vast disruption to rural communities and the reliance on a single technology, large scale on-shore wind.
The IFA does not support the proposal to hold technology neutral auctions. Instead the process should include a guaranteed base price for REE projects, and discriminate in favour of alternative energy sources including solar, hydro and anaerobic digestion.
To deliver on the Government’s high-level commitment of supporting REE projects, a budget of €100m should be ring-fenced from the current PSO levy funds collected. This represents approximately one-fifth of the overall budget. This ring-fencing should also be extended beyond total capacity of each auction, to include ring fencing at connection point (substation etc) to include REE projects.
* Grid connection policy
Grid connection policy should be linked directly with landowners who gave the original permission for the grid connection application to be made. This would prohibit speculative trading of grid connections.
The proposal to universally impose bid bonds or penalties should be reviewed, as it would be a disproportionate cost burden for certain projects. For REE projects, the proposal for bid bonds and penalties should be removed as this requirement may act as a barrier to adoption.
* Opportunities for micro-energy generation
The development of a micro-generation renewables sector in Ireland will support the rural economy and also provide an opportunity for a wider number of citizens to displace their fossil fuel use. There is need for a budget and implementation timeframe for micro-generation, in line with Government policy.
A clear statement of intent is required for micro-energy generation, which includes: • A ring-fenced budget from the PSO levy • Timeframe for implementation • Planning and development charges exemption for all farm-scale renewable projects • Grid connection preference and waivering of connection costs for farm-scale projects
* Financial supports for community-led projects
The provision of finance for REE projects will be essential to support early stage adoption. This must be complemented by the introduction of a robust Feed-In Tariff structure, which includes an increased tariff REE projects and roof-mounted solar projects. There would also be an on-going requirement for the terms and cost finance to be monitored, to ensure the project financing costs remain competitive.
The terms of existing investment mechanisms, such as the Employment and Investment Incentive Scheme, should be tailored to accommodate the inclusion of investments for REE projects.
* Community participation in renewable energy
Community participation in renewable energy production must be at the centre of future Government policy. To achieve this IFA proposes an additional generation Feed-In Tariff of 2.5c/kWh, in addition to the standard generation Feed-In Tariff.
REE projects, grid access and electricity infrastructure costs should be waivered and grid access should be ring-fenced. Furthermore such projects should be supported through the innovation process through the provision of information and advice to help guide and assist projects during uncertainty.
In addition, a requirement for an annual community contribution during the duration of large-scale renewable projects should be mandatory and legislated for. This contribution should be the greater of 1.5% of turnover or €2/MWh. This annual contribution should be used to support rural regeneration, working closely with initiatives such as the LEADER programme.
Paschal Donohoe
Minister (Department of Finance)
Michael W. D'Arcy
Minister of State (Department of Finance)