Renewable auction delivers cleaner, cheaper, power for Ireland

Nineteen new wind farms won contracts under the new Renewable Electricity Support Scheme according to provisional results published today which also showed wind energy prices falling sharply.  

Under the scheme wind farms and solar farms bid against each other for contracts of up to 16.5 years with only those promising to deliver power at the best value eligible to win contracts. There were specific auction pots reserved for community energy and for solar energy with wind farms competing in the general pot.

The provisional price announced today by EirGrid for contracts in the general pot was €74.08, which represents the average bid price of 19 wind farms and a number of solar projects. Auctions internationally have shown that, on average, solar energy continues to be more expensive than wind energy.

The price of €74.08 (non-indexed) is well under the existing cost of the REFIT support scheme which, as of 2019, was €80.25 (indexed) and represents a substantial saving for electricity consumers.

A total of 2,236 GWh of energy was available in the auction with onshore wind winning 1,469 GWh and solar winning 767 GWh. This works out at 479 MW of wind and 796 MW of solar as the former is able to produce far more electricity per MW.

Dr David Connolly, CEO of the Irish Wind Energy Association, said: “This auction will deliver cheaper and greener energy to power Ireland’s homes, farms and businesses.

“It is the first big step to connecting the additional 4,000 MW of onshore wind energy we need to develop by 2030 if we are to run our power system with 70 per cent renewable electricity.

“It is also fantastic that alongside these new wind farms we will be seeing solar farms connected to the grid for the first time and new community energy projects coming through.

“These new wind farms will create jobs all over Ireland, support local Councils and, under the terms of the new scheme, provide almost €3 million annually in community benefit funding to local communities in rural Ireland.

“And, most importantly, they will cut Ireland’s CO₂ emissions and help to end our dependency on imported fossil fuels.”

We can be cheaper

While the auction indicates the price of wind energy in Ireland has fallen sharply, the industry is determined to cut prices further.

Dr Connolly went on: “We can do more, we can do better and we can be cheaper. This was Ireland’s first renewable energy auction and we have already identified changes that could be made to deliver lower prices.

“A number of industry sources have pointed, for example, to the decision not to index prices as having pushed up costs by as much as 10 to 12 euro per MWh. Others had to account for the possibility that the transmission grid will not be strengthened in the coming years which would lead to wind generators being turned down or off as the system struggles to cope with rising levels of renewables.

“There are also a number of policy changes that the new Government can make that could halve the price of renewable electricity in Ireland.

“A report by energy market specialists Everoze, Saving Money, was published in June and showed how taller turbines, a more efficient planning system and a stronger grid could sharply cut the price of power for consumers right across Ireland.”

Deliver the Programme for Government

The Programme for Government commits to annual auctions and the Irish Wind Energy Association is now calling on Minister for Climate Action, Communications Networks and Transport Eamon Ryan TD to start planning for both onshore and offshore renewable auctions in 2021.

Dr Connolly continued: “With the right auction design we can deliver more power and cheaper power next year. We have started the push towards our 2030 targets and we cannot – we must not – let the momentum slip.

“We estimate we could have 6-700 MW of wind energy available to compete in next year’s auction, especially if final planning decisions can be made by An Bord Pleanála in the coming weeks, and there are likely to be a substantial number of solar projects ready to go as well.

“If the Minister stands by his commitment to deliver annual auctions then it gives us the best possible platform to build towards the 2030 targets, to decarbonise our energy supply and to cut the price of electricity.”