Renewable Heat – A Lost Opportunity?
25th September 2015
Renewables at a crossroads
25th September 2015

Renewable incentives under review

windfarm2

With the Renewable Energy Feed in Tariffs closing to new applicants on December 31, the Department of Communications, Energy and Natural Resources (DCENR) has published two consultation papers outlining how it intends to replace the schemes.

DCENR has published two consultation papers outlining two schemes it hopes will ensure Ireland hits its legally binding target of producing 16 per cent of its energy requirements from renewable sources by 2020 as set out by the EU Renewable Energy Directive.

Renewable electricity support scheme
Ireland has a landmass of almost 90,000 km2 and a sea area almost 10 times that size. With one of the best offshore renewable energy resources in the world, it should be no surprise that wind energy is the largest driver of growth in renewable electricity in Ireland. In 2013, 18.2 per cent of Ireland’s electricity demand was met by wind generation.

The technologies supported under the existing support schemes are as follows:
• Wind generation (large wind and small wind categories)
• Hydro
• Biomass landfill gas
• Biomass combustion plant
• Biomass combined heat and power
• Anaerobic digestion combined heat and power.

Moving forward, an assessment will be carried out to see which of these schemes should still receive support and if there are any new schemes worth supporting. Currently, the Public Service Obligation levy is recovered from all electricity consumers and it is anticipated that this would continue for the new support scheme.

Renewable heat incentive
Although achieving the anticipated renewable energy usage in the three energy sectors (electricity, transport and heat) will be challenging, the 12 per cent for renewable heat is particularly so. It is also the least regulated and homogeneous of the sectors.

From 2016 onwards a new Renewable Heat Incentive (RHI) will promote the use of renewable heat and support the delivery of government policy while also taking account of the broader emerging policy context.

There are a number of potential beneficiaries of the RHI such as direct end users of heat who procure and operate installations, third parties who procure and operate installations such as energy services companies (ESCOs), or business/community interest parties who install and operate larger networks such as district heating schemes.

The RHI is being introduced to support the transition from fossil fuel uses to renewable heat sources. The scheme will not support the use of fossil fuels. In order to qualify for support the heat generation and utilisation will need to qualify against certain criteria. A fundamental component will be ensuring that the RHI provides an incentive for the displacement of fossil fuels but also to ensure that the RHI only provides support to the displacement of heat which would otherwise be required.

In developing both of these schemes the department is determined to make sure no overlap exists. Some technologies such as combined heat and power have potential to be eligible for both schemes but the department will ensure that any structure avoids the potential for double subsidisation. The department is now seeking evidence based submissions to inform the undertaking of the technology review for both schemes.