Ireland Looks to Feed-in Tariff to Spur Renewable Energy Growth

The Department of Communications, Marine and Natural Resources in Ireland is pushing for greater acceptance and support of renewable energy technology in the country. Department Minister Noel Dempsey said that he is working to establish a new support mechanism for the country in the form of a fixed production feed-in tariff system for renewable energy project, in place of the current competitive tendering system. This support system will be designed specifically to encourage new capacity development, according to Dempsey, and will only apply to newly built projects.

The announcement was made at the annual conference of the Irish Wind Energy Association, where Dempsey outlined the importance of the new support system. Similar production-based incentive structure have been enacted in other countries like Germany and Spain, leading to great increases in renewable energy project construction at both the commercial and residential scale. “Renewable energy is at a very important stage of development in Ireland,” Dempsey said. “It is no longer a niche player, and is rapidly becoming an essential component of our electricity industry.” Ireland has a renewable energy target of 13.2 percent of power consumption coming from renewable generation sources by 2010. This would mean the country would need to have just over 1,400 MW of renewable capacity built and operating by 2010. At present, Ireland has just over 650 MW, which includes 341MW of wind, 250 MW of hydro and the balance is made up of different forms of biomass. Wind energy is seen as one of the most promising renewable energy technologies for the country, and Dempsey said it will most likely make the largest contribution in terms of achieving the 2010 targets. The potential of wind energy seems to naturally beg the question of what, if any, support mechanisms are necessary to bring the rapidly growing industry up to the same level of business as traditional power sources. “There is widespread international support given to developing renewable energy technologies, and there is no evidence of stand-alone development of any scale anywhere in the European Union,” Dempsey said. “Given the scale of development required to even achieve our target, I am satisfied that we still require a support mechanism to develop renewable energy technologies to ensure the required level of capacity actually gets developed.” In recent years, support mechanisms created for the Alternative Energy Requirement (AER) program were based on competitive tendering rounds, which offered up to a 15-year contract for successful bidders. The system was successful in keeping costs to a minimum and resulted in an impressive array of projects, Dempsey said, but it did not adequately ensure that the projects would get built. A feed-in tariff system should give wind energy developers some insurance in terms of an energy market, and encourage the full development of wind energy projects. Part of the uncertain market status for wind power came in the form of a development moratorium that was put in place at the end of 2003. Companies in the transmission industry such as EirGrid, which is also known as ESB National Grid, were concerned that the existing transmission infrastructure couldn’t handle the demands that a flood of new wind energy developments would put on it. Industry representatives from the Renewable Energy Development Group, the Commission for Energy Regulation, and the National Grid company have been working on solutions to the transmission challenge since 2003, and the moratorium was lifted in July of 2004. Dempsey said he is also working to change the minimum conditions necessary to apply for support by adding a valid grid connection offer to the existing conditions applied to AER VI, which should ensure projects that qualify for support are actually in a position to build within a reasonable timeframe. “The finer detail of establishing this process is the final gap we are working on and I am confident that we will be in a position to move forward and announce full details of the new scheme to the market within a matter of week,” Dempsey said. “I am aware that the Renewable Energy Development Group has prioritized its work to date in developing the new support mechanism given the importance of reaching our 2010 target. However, I am determined that we will take an ambitious, yet realistic approach to developing new targets, and I have specifically asked that the Renewable Energy Development Group concentrate on this area as a priority after the new support mechanism is finalized.” Editors note: Information for this story was taken directly from the speech given my Minister Dempsey. For the full text please visit the link below.
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