IFA Renewable Energy Project Team Leader Tom Short said the Renewable Energy Support Scheme (RESS) will exclude the meaningful participation of farm scale projects in renewable electricity generation.
“It’s clear from Government actions to date that they are only interested in supporting mega wind projects which for the most part will be built offshore and to a lesser extent large solar. These mega projects will be predominantly owned by major international companies and large international investor/hedge funds. Unfortunately, they will create minimal local employment once they are built out and are of limited benefit to local farmers and rural communities as profits in the main will be repatriated to the fund owners who reside outside Ireland.”
“The bar for participation has been set too high. Essentially, farm projects will have to compete in an auction system against mega wind and large solar that can afford to meet performance security requirements i.e. on-demand bond of €25,000/MW. If farmers want to participate, the maximum project size is limited to 5MW. However, they must relinquish majority ownership (51%) of the project to communities where the primary purpose is community benefit (environmental, economic or social) rather than financial profit. In essence, the farmer can only retain a 49% share which can be profit driven.”
Mr Short said, “The EU clearly recognises that the generation of renewable energy is more expensive than that from fossil fuels. Without financial incentives, the market will not deliver the required level of renewable energy. EU state aid rules allow for the introduction of national support schemes to overcome this market failure, including the introduction of tiered support measures. However, the Irish auction system favours big wind to the exclusion of smaller farm scale projects”.
“Farmers are willing to invest in renewable energy projects. Government policy initiatives to date fall considerably short of driving the commercial development of farm scale renewable energy projects. The inadequate provision of capital grant aid and ongoing operational supports undermines the long-term financial viability of many of these projects to the extent that commercial banks have no interest in funding them.”