Renewable Energy Support Scheme second auction terms and conditions published
The final terms and conditions for the second auction under the second Renewable Energy Support Scheme (RESS 2) in Ireland were published on 27 October 2021 (the RESS 2 Terms). The A&L Goodbody Energy, Infrastructure and Natural Resources team have, at a high level, drawn out some of the key features of the RESS 2 Terms and related documentation. These points focus on commercial developer-led (as opposed to community-led) energy projects.
The RESS 2 Terms apply to the second RESS auction only. The RESS 2 Terms broadly follow the terms and conditions of the first RESS auction (a link to our previous publication can be found here).
Key features of RESS 2:
- It will be an auction based process with support structured on a two way payment basis between EirGrid plc (as the administrator of the payment process) and those entities successful at auction (the Successful Applicants) by reference to a strike price
- The strike price per project will be set by reference to a Successful Applicant's bid price (which will not be subject to indexation)
- Bid prices for the auction cannot exceed €120MWh
- Supported technologies eligible for participation in the auction are onshore wind, solar, hybrid wind and solar, hybrid wind and storage, hybrid solar and storage, hydro, biomass HECHP, waste to energy HECHP and biogas HECHP
- If the market reference price is below €0 no support payments will be made for the hour(s) during which negative pricing applies
- There will be an additional specified cost of €2MWh for each Successful Applicant, plus costs of posting bid bonds, performance bonds and administering a community benefit fund. The additional specified costs of €2MWh is a contribution to each Successful Applicant's community benefit fund. The establishment by a Successful Applicant of a community benefit fund is a requirement for participation in RESS 2 and constitutes part of the government's strategy to ensure local communities benefit from energy projects in their locality
- A bid bond (by way of cash deposit) will need to be provided by an applicant (at the time they submit their application for inclusion in the RESS 2 auction process) in an amount equal to: €6 per MWh, where MWh is the Deemed Energy Quantity (Offer Quantity multiplied by a Renewable Capacity Factor) for one year of the RESS 2 Project.
- A performance bond (by way of an on demand instrument) will need to be provided by a Successful Applicant in an amount equal to: €20 per MWh where MWh is the Deemed Energy Quantity (Offer Quantity multiplied by a Renewable Capacity Factor) for one year of the RESS 2 Project.
- Main indicative timelines are:
- Application for qualification – closes 13 January 2022
- Auction submissions for qualified applicants – closes 9 May 2022
- Final auction results – 14 June 2022
- A Successful Applicant's project must achieve its commercial operation date by no later than 31 December 2025 or will lose RESS 2 support (if not complete by 31 December 2024, erosion of the contract term equivalent to the period of time between 31 December 2024 and Commercial Operation Date will occur).
For more information please contact Ross Moore, John Dallas, David McElroy, Aisling O'Donoghue, or any member of our Energy, Infrastructure & Natural Resources team.
Date published: 1 December 2021