Ireland’s New Small-Scale Renewable Electricity Support Scheme

The recent publication of the new Small-Scale Renewable Electricity Support Scheme Terms and Conditions introduces 15-year regulated tariff, first-come first-served Irish Government support for small renewable electricity generation projects. Our Energy team reviews the key features of the new Scheme.
The Minister for the Environment, Climate and Communications has published the Terms and Conditions (the Terms) for Ireland’s Small-Scale Renewable Electricity Support Scheme (SRESS 1). SRESS 1 is due to open for applications on 27 January 2025. The SRESS 1 - Terms and Conditions Non-Technical Guide has also been published, along with the SRESS 1 - Application Information Pack.
Unlike Ireland’s existing Renewable Electricity Support Schemes (RESS), which are available to utility-scale onshore and offshore projects, SRESS 1 support will not be allocated or priced using an auction process. Instead, SRESS 1 support will be provided at centrally set tariff rates. Support will be available to qualifying projects until aggregate quantitative limits are reached. These limits are applied across technology and sponsor types.
Support for renewable self-consumers having 50kW – 1MW renewable energy projects have been available since July 2023. The new SRESS 1 Support Scheme, however, is focused on projects that will export electricity to the grid. SRESS 1 is not open to autoproducers.
The Terms explain that the selection process includes ordering the fully completed and compliant applications by date received in their relevant generator and technology categories. Applications will then be processed based on their ranked order and Letters of Offer will be issued until the available support is fully allotted for the relevant category. Complete and compliant applications that are subsequently received will be placed on a reserve list in the order of the date they were received.
Eligible projects
The projects eligible to receive support under SRESS 1 are:
- Community Projects: SRESS 1 Projects which are always 100% legally and beneficially owned by a Renewable Energy Community (the Relevant REC), and where all profits, dividends and surpluses derived from the SRESS 1 Project are returned to the Relevant REC.
- SME Projects: SRESS 1 Projects that must always be 100% legally and beneficially owned by an SME. “SME” has an established meaning under EU law and refers to an enterprise which employs fewer than 250 persons and which has an annual turnover not exceeding €50 million, and/or an annual balance sheet total not exceeding €43 million.
- Other Export Projects: SRESS 1 Projects that: (1) are neither Community Projects nor SME Projects, and 2) rely on solar energy with an installed renewable capacity greater than 50 kW and up to, but no greater than 1 MW, to produce electricity and export it to the national grid.
In the context of Community Projects, "Renewable Energy Community” is defined as a legal entity:
- This is based on open and voluntary participation in accordance with applicable law. The entity is autonomous and effectively controlled by its shareholders or members. These shareholders or members must be located nearby, in the case of SMEs or local authorities, or resident in the proximity of the SRESS 1 Project, in the case of natural persons. The Project must be owned and developed, or proposed to be owned and developed, by this legal entity.
- The legal and beneficial shareholders or members of which are natural persons, SMEs, local authorities including municipalities, not-for-profit organisations or local community organisations.
- For any legal and beneficial shareholder or member, with the exception of “Sustainable Energy Communities” as registered with SEAI, that shareholder or member’s participation does not constitute their primary commercial or professional activity
- The primary purpose of this is to provide environmental, economic, societal or social community benefits for its legal and beneficial shareholders or members or for the local areas where it operates, rather than financial profits.
- Each shareholder or member is entitled to one vote, regardless of shareholding or membership interest, and
- Which is, or which has at least one shareholder or member that is, registered as a “Sustainable Energy Community” with SEAI.
All of the above criteria must be evidenced to the satisfaction of the Minister.
Applications for SRESS 1 support will not be open to any proposed Community Project, SME Project or Other Export Project where:
- The Applicant is active in the primary production of agricultural products or is active in the primary production of fishery and aquaculture products, and
- The Applicant does not qualify as an SME.
Eligible technology
The SRESS 1 tariffs vary according to generation technology. The renewable generation technologies that are eligible for support under SRESS 1 are:
- Solar with an Installed Renewable Capacity greater than 50 kW and up to, but no more than, 1 MW
- Solar with an Installed Renewable Capacity greater than 1 MW and up to, but no more than, 6 MW
- Wind with an Installed Renewable Capacity greater than 50 kW up to, but no more than, 6 MW, or
- Wind and Solar both located behind the meter of the SRESS 1 Project and having a combined Installed Renewable Capacity greater than 50 kW up to, but no more than, 6 MW.
In each case, the output of the project must be exported to the national grid.
Export tariff rates
The following export tariff rates will apply:
Solar (50 kW < capacity ≤ 1 MW) |
Solar (1 MW < capacity ≤ 6 MW) |
Wind (50kW < capacity ≤ 6 MW) |
|
Community Projects |
€150/MWh |
€140/MWh |
€90/MWh |
SME Projects |
€130/MWh |
€120/MWh |
€80/MWh |
Other Export Projects |
€130/MWh |
Ineligible for SRESS 1 support |
Ineligible for SRESS 1 support |
For wind and solar hybrid projects, the two technologies will not be metered and funded separately. Instead, the Minister will determine a single applicable SRESS 1 Tariff for the hybrid project. The tariff rate will be allocated to the solar and wind technologies in proportion to the capacity each contributes to the overall project. Each capacity will first be multiplied by its applicable capacity factor, which is 35% for wind and 11% for solar.
In common with the other RESS schemes, SRESS projects will not be permitted to seek a Guarantee of Origin for any exported electricity that is also supported by SRESS.
Planning permission
SRESS 1 Projects must have a full and final grant of planning permission. The permission must cover the construction of the electricity generating plant at the site, which must be an Eligible Technology. The planning permission must not have an expiry date or a decommissioning requirement prior to the expected end of the term of SRESS 1 support, ie the date which falls 15 years after the start of SRESS support.
Grid connection
SME Projects and Other Export Projects: In each case, the proposed SRESS 1 Project must have accepted a grid connection offer and be party to a Grid Connection Agreement.
Community Projects: The proposed SRESS 1 Project must have a Grid Connection Assessment for a potential grid connection agreement. If entered into, this agreement must provide sufficient capacity to accommodate the Installed Renewable Capacity of the SRESS 1 Project. It must also have a term lasting at least as long as the SRESS 1 Support Period.
The Terms also state that several SRESS 1 Projects are not eligible to apply for SRESS 1 under certain conditions. These conditions include proposed SRESS 1 Projects and projects that received a Letter of Offer, which connect to the national grid at the same location or a near-contiguous location. Configurations involving a SRESS 1 Project and one or more non-SRESS 1 Projects connecting to the national grid at the same or a nearby location are also affected unless specific criteria are met:
- Each project has a unique grid connection agreement
- The projects are not under the control of the same person or have a material contractual relationship with each other such as a PPA, management agreement, cooperation agreement, co-development agreement, shared construction or operational contracts or similar arrangements, and
- The relevant SRESS 1 Project has not been included, in whole or in part, in an offer for a RESS Project in a RESS Competition
Site
Applicants must have control of the relevant site and the right to access this site to develop and operate the proposed SRESS 1 Project. Proposed SRESS 1 Projects cannot be reliant on any infrastructure or rights attaching to another SRESS 1 Project or any other project.
Longstop date
“Longstop Date” regarding Commercial Operation means:
- For Community Projects: 57 months from the date of the Letter of Offer for the relevant SRESS 1 Project, and
- For SME Projects and Other Export Projects: 48 months from the date of the Letter of Offer for the relevant SRESS 1 Project
However, a later date may be permissible, once it is extended under the Terms.
The generator is required to achieve commercial operation by 57 months from the date of the Letter of Offer, ie the Longstop Date. The consequence for not meeting this milestone by this date is that the Letter of Offer may be revoked by the Minister.
SRESS 1 Export Tariff indexation
30% of each SRESS 1 Export Tariff will be adjusted (upwards or downwards) on 1 January each year. The adjustment will reflect any movement in the EU Harmonised Index of Consumer Prices between 27 January 2025 and the relevant indexation date.
Review of the SRESS 1 Export Tariffs
The Minister will review and potentially revise the SRESS 1 Export Tariffs offered to new applicants after three calendar years have passed since the SRESS 1 Commencement Date. However, this will not occur if the Scheme has already closed to applications by that time.
2-way floating feed In premium (FIP)
As with Ireland’s other Renewable Electricity Support Schemes (RESS and ORESS), financial support under SRESS 1 is structured as a ”2-way floating feed in premium”. This means that, again in common with RESS and ORESS, a project supported under SRESS 1 will need to sell its exported electricity under a power purchase agreement where a licensed electricity supplier is the off-taker.
SRESS 1 withdrawal
Withdrawal from SRESS 1 is provided for, where:
- A Generator has received a Letter of Offer but SRESS 1 support has not yet commenced, or
- The project has achieved commercial operation by the Longstop Date in accordance with the Terms and its Letter of Offer. In addition, the project must have also satisfied obligations to pay difference payments and reconciliation payments.
An additional feature of SRESS 1 is that all SRESS 1 projects must establish a Community Benefit Fund. However, the Minister has the discretion to exempt any Other Export Project that has received a Letter of Offer from the obligation to establish and contribute to a Community Benefit Fund. Instead, the Minister can require an Other Export Project to put in place an alternative arrangement that is appropriate for the size and nature of the project.
Comment
SRESS 1 represents a welcome addition of State support for renewable electricity installations. It is designed for projects that could not avail of or were not best suited to the RESS, ORESS or the Micro-generation Support Scheme (MSS).
The absence of an auction procedure is a welcome feature of SRESS 1, as it streamlines the process. Successful applicants are still required to satisfy the various criteria and submit their applications on time. However, the process is not a competitive process and applicants will not run the risk of making an unsuccessful bid, which is a risk under the other RESS schemes. The Terms note that SRESS has been designed to promote investment in small-scale renewable energy generation by certain project owners for which a competitive auction-based framework would not be cost-effective or feasible.
The webpage accompanying the Terms explains that the tariffs depend on whether a project is an SME or a REC. A higher rate is provided for RECs due to the additional hurdles they face when setting up projects. It goes on to explain that this includes planning, grid connection and financing. In addition, it is reflective of a public policy preference for community involvement in renewable energy projects.
The Terms represent a key step in Ireland’s promotion of electricity generation from renewable sources.
For more information, please contact a member of our Energy team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.
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