2016 will go down as the year that the solar industry turned its attention to Ireland, it seems the possibility of a subsidy and fewer opportunities for solar elsewhere in Europe have made it a prime candidate for the industry to pin its hopes on.
With the solar pipeline now reaching over 5GW and still no clarity on what the government support scheme will look like or even how much solar it will support, we look back over some of the key milestones and events of 2016 and what it means for the solar industry going into 2017.
At the end of 2015 the pipeline of solar projects was just 1.6GW, however, as the majority of these projects were 5MW or below this was made up of over 300 individual projects. Compare this to the end of 2016 we now have around 560 projects totalling 5.1GW, the average project size has increased to 15MW, although this is somewhat skewed by several 95MW projects.
At the beginning of the year, it was rumoured that a support scheme would be announced in Q3 and this drove a huge number of project applications in the first half of the year, by June the pipeline had reached 3.3GW. As the year progressed it became clear that due to political changes and a change in government that any announcement would be delayed and the current assumption is that an announcement on the support for solar will be made in the first quarter of 2017. The result is that we end the year with a 240% increase in the capacity of the pipeline but still no details on what support will be made available for solar.
The huge pipeline that has developed has taken everyone by surprise and in November minister Denis Naughten tried to manage expectations with a speech in which he stated that the support scheme would not help the entire pipeline to be built out.
The pipeline is not just causing concern for the politicians but also for the organisations that manage the grid, including ESB at the distribution level and Eirgrid at the transmission level. ESB has made clear that the current process for processing these applications is not appropriate for this volume of applications but in the absence of an alternative they will continue with their sequential processing until CER introduce new regulations for managing the pipeline.
Eirgrid has also seen an increase in the number of applications being submitted directly to it for larger projects to be connected to the transmission grid, these projects range from 25MW to 95MW. Due to the unprecedented number of projects being submitted it was not initially clear how they would be processed, however, Information has recently been released by Eirgrid to clarify this point. It revealed that there are two options for these projects, either they will require a new substation to be built or they must join the queue of projects looking to connect at the appropriate substation and they will be processed sequentially. This means that Eirgrid will have to work with ESB on processing the applications sequentially.
The development of the solar pipeline has also raised many questions for different stakeholders. It has been widely accepted that the whole pipeline of projects won’t be built out but with significant investments already being made by developers on land acquisition, planning and grid connection it remains to be seen what will happen to those projects that aren’t successful. This is of particular concern to farmers and landowners who have signed agreements for the use of their land.
One area of the solar market which has seen more success in 2016 was rooftop solar. With several installations completed using grants from SEAI and an increasing demand from corporates for green energy. However, these projects have been possible due to grants but it is hoped that there will be separate support for rooftop projects in the support scheme when it is announced.
Another area closely linked with solar and renewables is energy storage and there is already interest in developing energy storage in Ireland. Applications have been submitted to ESB for both stand-alone and co-located with renewables and there are already some test projects taking place. This is likely to continue into 2017 and we will start to see some more clarity on what role energy storage will be able to play in the DS3 to perform grid services.
As we reach the end of 2016 the number of applications for new solar projects has slowed, so at least for the first part of 2017 and until we see some movement from the government on the support scheme, the main focus for developers will be to progress those existing applications. It is likely that whatever scheme is introduced, planning permission and a valid grid contract will be a prerequisite and developers with projects already at this stage will stand a better chance of being successful.
Whatever happens going forward, it is clear that there is a huge amount of interest in developing solar projects in Ireland and that solar can play an important role in helping to meet renewables targets. Hopefully 2017 will bring some much needed clarity to the industry and by this time next year we will see projects under, or at least nearing, construction.