Renewable Electricity Support Scheme given green light by EU
The Renewable Electricity Support Scheme (RESS) – Ireland’s scheme to support electricity production from renewable sources – has been approved by the European Commission under EU state aid rules.
The measure will contribute to the EU environmental objectives without unduly distorting competition, the commission confirmed.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said:
“This RESS will contribute to Ireland’s transition to a low carbon and environmentally sustainable economy, in line with the European Green Deal and our state aid rules.”
The RESS will contribute to the EU renewable energy target and will help Ireland reach its national target to transition away from fossil fuels and reach a share of 70% of renewables in its electricity mix by 2030, according to the commission.
The RESS, with an estimated total budget of between €7.2 billion and €12.5 billion, will run until 2025.
During this time, aid for the production of electricity from renewable sources granted under the RESS will be allocated through auctions.
Successful applicants of the RESS will receive support over 15 years in the form of a premium on top of the market price.
The competitive auctions through which the aid is granted will set a ‘strike price’. When the market price is below this ‘strike price’, beneficiaries will be entitled to receive payments equal to the difference between the two prices.
However, when the market price is above the ‘strike price‘, beneficiaries will have to make payments equal to the difference between the two prices. These payments will be returned to Irish consumers in the form of reduced electricity bills.
Projects developed by renewable energy communities will benefit from grants and loans to support the development of their projects, and will participate to auctions in a special category in order to ensure that a certain number of these projects is successful.
The communities hosting projects supported by the RESS will benefit from a fund to which all RESS beneficiaries will contribute to and that will invest in certain technologies and ‘sustainable goals’ including education, energy efficiency, sustainable energy and climate action initiatives in the area surrounding the RESS projects.
Ireland has also developed a detailed plan for evaluating the RESS, including in particular a full analysis of the costs and benefits of the innovative measures supporting the renewable energy communities, the commission noted.