GlobalData predicts that the scheme will be pivotal to Ireland’s contribution towards the EU-wide renewable energy target of 32% of overall generation by 2030 and to the 7% per annum decline in overall greenhouse gas emissions from 2021 to 2030.
70% renewables by 2030
Somik Das, Senior Power Analyst at GlobalData, comments: “Ireland encompasses a target of generating 70% of its electricity from renewables by 2030, which is presently around 40% as per GlobalData estimates. The RESS scheme is anticipated to provide a platform under which the 2030 target might just be realised if not surpassed.
Average auction price 7% lower than last year
“The weighted average price achieved in the auction was over 7% lower than last year’s Renewable Energy Feed-in-Tariff (REFiT) scheme’s wind generation price. The domino effect of the declining prices in RESS auctions will likely push down the overall wholesale electricity cost. Spikes and declines in price, driven by renewables, are anticipated to make the electricity market uncertain and volatile. To secure themselves from this uncertain volatility, market stakeholders are likely to maintain some cost margin in order to safe guard themselves from price variations , created by lower-cost renewable energy. This way the lower cost benefits of renewables might not be immediately be noticed by customers.”
Rising competition from the offshore wind segment and achieving grid parity has the potential to further drive down the cost of renewable energy in the country.
Offshore wind, PV and onshore wind
Das added: “The auction is the first in a series of five auctions that will take place until 2030 as part of the Renewable Energy Support Scheme (RESS). GlobalData tracked more than 14GW offshore wind in early and progressed stages of development in Ireland that are likely to enter ensuing auctions. The inclusion of offshore wind along with solar PV and onshore wind is predicted to make the reverse bidding even more competitive. This additional competition will likely push the price of renewable energy further down.
“Businesses looking to take a cost advantage from lower renewable energy pricing would want to make the most of the scenario and review their energy procurement strategies.” (hcn)
