Update on RESS 4 auction

RESS 4 is the fourth onshore Renewable Electricity Support Scheme auction held by the Government of Ireland and is seen as a pivotal component of meeting Ireland’s ambitious targets of 80% renewable electricity (RES-E) by 2030. The provisional auction results were published by the Department for the Environment, Climate and Communications (DECC) on September 9^th 2024. Our Sustainable Futures team explain the auction results below.

2,071 GWh of renewable generation was provisionally successful in this year’s auction. This is a significant improvement from last year’s RESS 3 auction result, which delivered less than half of the minimum 2,000 GWh target. However, the RESS 4 successful volumes are at the lower end of the 2,000 – 5,500 GWh indicative auction volume target range set by DECC and will award less energy than both the RESS 1 and RESS 2 auctions.

Overall, provisionally successful projects in the RESS 4 auction are set to increase Ireland’s renewable energy capacity by more than 20%.

Despite provisionally awarding twice as much renewable energy as RESS 3, only 4 more projects were successful in RESS 4 when compared to the RESS 3 results. However, 16 projects were provisionally unsuccessful in the auction, which is twice the number of the RESS 3 auction indicating a strengthening of Ireland’s renewable generation pipeline. In terms of deemed energy, 80% of RESS 4 applicants were successful. This is higher than both RESS 3 (76%) and RESS 2 (73%) but lower than RESS 1 (88%).

Of the 27 provisionally successful projects in RESS only 4 are onshore wind with the remainder of projects being solar PV. No other eligible technologies (hybrid wind and solar, hybrid wind and storage, hybrid solar and storage, hybrid wind and solar and storage, hydro, biomass High Efficiency Combined Heat and Power (HECHP), waste-to-energy HECHP, biogas HECHP) were successful.

Commonly cited reasons for the scarcity of wind projects competing in RESS include issues with securing the necessary planning consents and projects opting for Corporate Power Purchase Agreements (CPPAs) as an alternative route to market with estimates of up to 150MW of projects opting to seek a CPPA over a RESS 4 contract.

As seen in the graphic below, the 4 provisionally successful onshore wind projects are all in the top half of rated capacity. Owing to onshore wind’s higher capacity factor, which in Ireland is c. 3 times higher than that of solar PV, these projects rank higher than all the solar PV projects in terms deemed energy. 

At €96.85 per MWh, the average price of provisionally securing renewable projects decreased by €3.62 per MWh from RESS 3 to RESS 4. This unanticipated decrease is welcome news for Irish energy consumers. In fact, the average RESS 4 price is also slightly lower than the year-to-date price of wholesale electricity at c. €98 per MWh. The average RESS 4 price is also lower than that of RESS 2, however that auction did not include the 30% partial indexation which was introduced last year.

For the first time since RESS 1, the average price per technology were also presented in the provisional RESS 4 auction results. Reflecting its position as the cheapest form of renewable energy in the Irish market, the average price of onshore wind was €90.47 per MWh while the price of solar PV was €104.76.  

Overall, the provisional results of RESS 4 shows a considerable improvement from RESS 3. Combined with technological developments, the structural changes introduced in RESS 4 have contributed to securing increased volumes of energy at lower prices. Measures to reduce risk associate with planning and grid delays are seen as particularly important to the improved results from this year’s auction.

However, the success of future RESS auctions require significant improvements in the planning system and the electricity grid. Key industry voices continue to call for increased resourcing and improved systems in both national and local planning bodies as a necessity to deliver on the 2030 80% RES-E target.  

Similarly, Ireland’s electricity grid urgently needs significant investment and upgrade to enable the connection of new renewable energy assets. Strong political support and direction is required to underpin the change for both planning and grid.

Looking ahead to next year’s RESS 5 auction, it is hoped that the positive developments from the provisional RESS 4 results will continue. While a lot of work remains to enable acceleration of Irish renewable energy generation deployment, continued developer appetite and promised improvements in statutory bodies lend promise for the future.

With aligning visions for a future powered by renewable energy, increased collaboration between Government and Industry could hold the key to accelerate deployment of solar PV, onshore wind, and other renewable generation assets.