Latest State auction for onshore renewable energy falls short of initial procurement target

The fourth auction under the Government’s Renewable Electricity Support Scheme (RESS 4) showed that 1,146 GWh of wind energy bids were successful alongside 925 GWh of solar energy.

The successful wind farm bidders were Drumnahough Wind Farm, Futurenergy’s Carrownagowan Wind Farm, Upperchurch Wind Farm and Springfield Renewables’ Castlebanny Wind Farm. Photo: Eamonn Farrell/RollingNews.ie

Provisional results of the latest State-run auction for onshore renewable energy development once again failed to meet initial procurement levels, which puts the Government’s ambitious 2030 climate targets further out of reach.

The fourth auction under the Government’s Renewable Electricity Support Scheme (RESS 4) showed that 1,146 Gigawatt hour (GWh) of wind energy applicants were successful alongside 925 GWh of solar energy. 

This is well-below the initial procurement target of 2,500 GWh–4,500 GWh set out at the start of the auction process and adds to previous disappointment from auctions that went before it. 

Solar projects by far outweighed the number of successful wind farm bids with just four wind farms winning contracts.

The successful wind farm bidders were Drumnahough Wind Farm, Futurenergy’s Carrownagowan Wind Farm, Upperchurch Wind Farm and Springfield Renewables’ Castlebanny Wind Farm.

A total of 56 projects applied to participate in the RESS 4 qualification process and 43 of these qualified to participate in the RESS4 auction. Of those that did not qualify, 10 projects decided to formally withdraw from the process.

Out of the 43 that qualified, 27 projects have been provisionally successful in the auction and 16 projects have been provisionally unsuccessful in the auction.

The auction set the average price for wind energy was €90.47 per megawatt hour, while the average price of solar energy was €104.76 per megawatt hour.

These prices are lower than some had anticipated which may be positive news for Irish electricity consumers but may have also deterred bidders according to previous research by leading analysis group Aurora.

“The reduction of the auction price cap for onshore wind results in few projects proving profitable under a RESS contract. As a result, this could prove an expensive, yet low volume auction,” said Steph Unsworth, senior associate at Aurora Energy Research.

“This low volume will lead to Ireland significantly missing both its renewable capacity targets and the carbon budgets,” she added.

Meanwhile, Wind Energy Ireland chief executive Noel Cunniffe said the provisional results "represent a positive step towards delivering the Climate Action Plan."

However, he reiterated calls for Government to examine ways to increase the volume of renewable energy entering future auctions.

The industry has continually called for further investment in An Bord Pleanála (ABP) with planning backlogs long miring the development of renewable energy projects in the Republic.

Wind Energy Ireland has also highlighted the need to have a strengthened electricity grid in place to distribute energy that will be produced by new wind farms to our local communities.

“Without a strengthened electricity grid, power will be lost and force projects to charge more for the power they produce or mean they cannot compete in the auction at all,” said Mr Cunniffe.

“It is also critical to ensure that national efforts to speed up the delivery of renewable energy projects are not impeded by county councils across Ireland amending County Development Plans to block the development of new wind farms,” he added.

This was a key point of contention for Statkraft Ireland vice-president for wind and solar development Donal O’Sullivan in a recent interview with the Irish Examiner.

Local councillors have allegedly de-zoned areas previously designated for onshore renewable energy development, leading to planning refusal for some developers looking to get projects off the ground in certain areas.

“There’s a crisis coming where the county councils haven’t zoned enough land,” Mr O’Sullivan said.

Statkraft Ireland, part of The Statkraft Group, a state-owned energy company from Norway and Europe’s largest generator of renewable energy, submitted plans for an onshore project on a designated site for wind energy development but Mr O’Sullivan said the application was eventually refused as “the area was re-zoned due to local political pressure”.

Despite obstacles in the reneable energy sector, Mr Cunniffe welcomed the changes introduced by Government to the design of the auction, “such as new measures to reduce the impact of grid and planning delays, which have allowed projects to bid in for a contract at a competitive price to deliver value for consumers. We are seeing the positive effects of those new measures in today’s results.”

The final auction results will be published by Eirgrid on September 25.