European Commission approves RESS under state aid rules

Ireland’s Renewable Electricity Support Scheme (RESS) has been approved by the European Commission.

It assessed the scheme – which has been designed to help the country reach its target of 70% renewable energy by 2030 – under EU State aid rules, finding that the aid is “necessary and has an incentive effect”.

The Commission concluded that the aid is proportionate and limited to the minimum necessary due to the amount of aid being set through auctions. The scheme is therefore in line with EU State aid rules as it promotes the generation of electricity from renewables in line with the European Green Deal but doesn’t “unduly distort” competition.

The RESS was first consulted on in 2017, securing government approval a year later. Details of the first auction were then released in December 2019, revealing that between 1,000GWh and 3,000GWh to be contracted for.

Up to 10% of this is to be set aside for solar PV, with chairman of the Irish Solar Energy Association, David Maguire, welcoming efforts to create a space for solar in the auction despite describing the limitation of 10% as “disappointing”.

The RESS is to run until 2025, although it has already faced minor delays. Its application deadline was pushed back earlier this year due to the COVID-19 pandemic, going from 2 April to 30 April 2020.

It has an estimated total budget of between €7.2 billion (£6.5 billion) and €12.5 billion (£11.3 billion). Applicants that are successful are to receive support through the RESS for over 15 years.

It is to work in a similar fashion to other support schemes, with the auctions to set a strike price. When the market price drops below this strike price successful applicants will receive payments equal to the difference between the two.

As part of the scheme, renewables projects developed by local communities will be able to benefit from grants and loans and will participate in the auctions in a separate category.

Executive vice-president of the European Commission, Margrethe Vestager, who is in charge of competition policy, said: “This Renewable Electricity Support Scheme will contribute to Ireland's transition to a low carbon and environmentally sustainable economy, in line with the European Green Deal and our State aid rules.”