- RESS4 auction is unlikely to achieve its procurement target of 2,500 GWh–4,500 GWh due to a lack of eligible and profitable projects under the new reduced cap price, according to Aurora.
- Increased lenience in eligibility is not expected to widen the pool enough to meet the procurement target.
- RESS4 is the last auction to procure capacity to meet the 2030 targets of 80% renewable electricity, 9 GW onshore wind, and 8 GW solar PV.
OXFORD (AURORA ENERGY RESEARCH)—The Irish Department of the Environment, Climate and Communications’ recent decision to reduce the Renewable Electricity Support Scheme (RESS4) auction price cap for onshore wind projects is expected to make it difficult to meet the Climate Action Plan 2024 (CAP24) capacity targets and both the Climate Change Advisory Council (CCAC) and EU carbon budgets, Aurora Energy Research, the leading global energy analytics provider, assesses.
Aurora’s latest analysis indicates that the auction is unlikely to achieve its procurement target of 2,500 GWh–4,500 GWh due to a lack of eligible and profitable projects under the new reduced cap price. The introduction of technology-specific caps, which lowered the onshore wind cap from 110 €/MWh to 93.50 €/MWh, has resulted in fewer projects being able to secure financing under a RESS4 contract.
Additionally, the increased lenience in eligibility, which now allows projects under juridical review to enter the RESS4 auction, is not expected to widen the pool enough to meet the procurement target, Aurora says.
Steph Unsworth, Senior Associate, Aurora Energy Research, comments:
“RESS4 is set to yet again severely undershoot the procurement target and clear near the price cap, as the reduction of the auction price cap for onshore wind results in few projects proving profitable under a RESS contract. As a result, this could prove an expensive, yet low volume auction. This low volume will lead to Ireland significantly missing both its renewable capacity targets and the carbon budgets.
“Projects in Ireland remain higher cost than in other European markets due to tight supply chains on the island system and financing difficulties given the arduous planning and grid connection processes. So, this low auction cap price is not high enough for projects to come online.”
The RESS4 auction is the fourth round of the Republic of Ireland’s current renewable subsidy scheme and will be held from 22 August to 29 August 2024. The long-stop date for these projects to come online is 31 December 2029, effectively making it the last auction to procure capacity to meet the 2030 targets of 80% renewable electricity, 9 GW onshore wind and 8 GW solar PV.
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Established in 2013, Aurora Energy Research is a leading global provider of power market forecasting and analytics for critical investment and financing decisions. Headquartered in Oxford, we operate out of 14 offices worldwide covering Europe, North & South America, Asia, and Australia. Our comprehensive services include market outlook packages for energy industry participants, advisory support, and innovative software solutions. We foster diversity with a team of over 600 experts with backgrounds in energy, finance, and consulting, offering unparalleled expertise across power, renewables, storage, hydrogen, carbon, and fossil commodities. Our mission is to facilitate the global energy transition through widely trusted quantitative analysis and high-quality decision support.
