ORESS 1 - Terms and Conditions for Ireland's Offshore Renewable Electricity Support Scheme
ORESS 1 - Terms and Conditions for Ireland’s Offshore Renewable Electricity Support Scheme
The final terms and conditions for the first auction under the new offshore wind renewable energy support scheme (ORESS 1) in Ireland were published in November 2022 (the ORESS 1 Terms). ORESS 1 is expected to procure approximately 2.5GW of electricity generating capacity in Ireland. ORESS 1 is the first of at least three planned ORESS auctions which will be technology-specific to offshore wind.
The subsidy will be granted through an auction-based process. The support will be structured on a two-way payment basis between the Transmission System Operator (TSO), as the administrator of the payment process, and the successful applicant, by reference to a project's individual bid price.
The first prequalification stage for applications started in December 2022. The auction will be held in the first half of 2023 and disclosure of the outcomes should happen by June 2023.
This support scheme is a part of the overall renewable energy support scheme package and certain elements require State Aid approval from the EU Commission.
Subject to State Aid clearance, the duration of the support ends on the date which is 20 years from Target Commercial Operation Date of the ORESS 1 project, which has to be achieved no later than 31 December 2031. The ORESS 1 Terms apply to the first ORESS auction only.
Set out below are the key features from ORESS 1 Terms and related documentation:
Strike price per project will be set by reference to a successful applicant's bid price (which will be subject to indexation).
The maximum offer price for the ORESS 1 Auction will be specified in the Auction Information Pack. This will be made available on the 17 April 2023.
ORESS 1 is the first of at least three planned ORESS auctions which will be technology-specific to Offshore Wind.
If the market reference price, which is intended to be the Day-Ahead Market Price, is below €0, then no support payments will be made for the hour(s) during which negative pricing applies.
A bid bond (by way of cash deposit) will need to be provided by a bidder.
Performance security (by way of an on demand instrument) will need to be provided by successful applicants in an amount equal to €20 per MWh, where the MWh value is the deemed energy quantity for one year for the ORESS 1 Project.
Subject to State Aid clearance, ORESS 1 projects which have Unrealised Available Energy in any hour will be eligible for Unrealised Available Energy Compensation.
Only "Phase 1" projects will be entitled to participate in ORESS 1. The eligibility criteria requires ORESS 1 projects to have (i) a Maritime Area Consent (MAC), and (ii) a Grid Connection Assessment. Seven projects in Ireland – the "Phase 1 Projects" – have received a MAC.
The payment by a successful applicant towards a community benefit fund is a requirement for participation in ORESS 1 and constitutes part of the government's strategy to ensure local communities benefit from energy projects in their locality.
Key timelines are:
application for qualification – closed on the 1 February 2023
auction submissions for qualified applicants – closes 3 May 2023