Certain milestones must be achieved by RESS 2 projects under the Terms and Conditions (RESS 2 Ts&Cs). Failure to meet these milestones could result in a project’s RESS 2 Letter of Offer being revoked and draws made against its performance security.
The Minister has extended the deadlines for the remaining milestones on foot of “exceptional circumstances” facing RESS 2 projects. These issues include grid reinforcement delays by EirGrid and ESB Networks, difficulty in procuring critical materials to develop grid connections for renewable energy projects and grid outage availability.
The Minister’s use of his powers to amend the deadlines on an industry-wide basis is particularly significant as this is the first time this power has been used under a RESS scheme. The Minister has chosen to make the amendments under his powers under Section 1.11 of the RESS 2 Ts&Cs. This amendment provides that subject to Article 6 of the Renewable Energy Directive, the Minister reserves the right to alter or amend any provision, Section or part of the RESS 2 Ts&Cs. This includes instances arising as a consequence of any directions, conditions or requirements of any consents, clearances or licenses.
It is interesting that the Minister has made these changes using his general power under Section 1.11, rather than the more specific deadline extension mechanism under Section 11.9.
The extended deadlines will apply to each RESS 2 project to the extent it has not already achieved the relevant milestone.
The amended milestones are as follows:
Interim Milestone Date and consequences for failure to meet Interim Milestone Date
Final Milestone Date and consequences for failure to meet Final Milestone Date
The Generator to submit a declaration to the Minister confirming that funding to construct the RESS 2 Project and achieve Commercial Operation is in place in respect of the RESS 2 Project.
If not complete by 31 December 2023, the Minister will be entitled to drawdown up to a maximum of 25% of the Performance Security (4% per month).
This date has now been extended to 31 March 2024.
If not complete by 30 June 2024, the Letter of Offer will be revoked and remaining portion of the Performance Security will be drawn down.
This date has now been extended to 30 September 2024.
The Generator shall provide a letter to the Minister confirming receipt from the TSO/DSO of the ‘Second Stage Payment’ under the Grid Connection Agreement.
If not complete by 30 June 2024, drawdown on Performance Security up to a maximum of 25% (4% per month).
This date has now been extended to 30 September 2024.
If not complete by 31 December 2024, Letter of Offer will be revoked and remaining portion of the Performance Security will be drawn down.
This date has now been extended to 31 March 2025.
The Generator shall achieve Commercial Operation.
If not complete by 31 December 2024, erosion of the contract term equivalent to the period of time between 31 December 2024 and Commercial Operation Date.
This date has now been extended to 31 December 2025.
If not complete by 31 December 2025, Letter of Offer will be revoked and remaining portion of the Performance Security will be drawn down.
This date has now been extended to 31 December 2026.
Any force majeure extension may be for a maximum period of one year to 31 December 2041. The force majeure provisions are otherwise unchanged.
Replacement performance security
If a RESS 2 project does not achieve commercial operation before 31 December 2025, the developer must replace the existing performance security with a new performance security instrument. The Minister will return the previously held performance security, provided the replacement performance security meets the requirements. Any such replacement performance security must:
Have an Expiry Date of 31 July 2027 - the required Expiry Date under the RESS 2 Ts&CS prior to this amendment was “the earlier of the date falling seven months after the Commercial Operation Date or 31 July 2026”. If a RESS 2 project achieves commercial operation earlier than the extended Longstop Date, the replacement performance security will be returned to the issuer prior to this expiry date
Be for an amount calculated in accordance with Section 8.3 of the RESS 2 Ts&CS. Where one or more demands were made under the previous performance security, the replacement performance security is required to be equal to the balance of the uncalled security
Be issued by a financial company with an approved credit rating
Subject to (a) and (b) above, be in the form set out in the RESS 2 Implementation Agreement, and
Be effective so there is no gap in security cover.
Failure to provide the replacement performance security to the Minister before 31 December 2025 will be a breach of the Implementation Agreement and the RESS 2 Ts&Cs and will be treated by the Minister as an event of default.
Duration of support
Under the amended RESS 2 Ts&Cs, where a project has achieved each milestone by the relevant Final Milestone Date and is otherwise entitled under the RESS 2 Ts&Cs to receive RESS 2 Support, it is obliged to do so:
No earlier than 1 July 2023, and
No later than 31 December 2026.
The end date for RESS 2 support is also updated from 31 December 2039 to 31 December 2040, subject to any extension due to a successful claim of force majeure.
These milestone extensions have preserved the position that the period of RESS 2 Support is subject to a maximum duration of 16.5 years and a minimum duration of 14 years.
The extensions to the deadlines under the RESS 2 Ts&Cs will come as welcome news for affected RESS 2 projects. It will be interesting to see whether this relief results in a lower attrition rate for the RESS 2 fleet, and whether similar amendments are made to the RESS 3 deadlines.
For more information on the impact of these extended deadlines on RESS 2 projects, contact a member of our Energy team.
People also ask
What is the RESS 2?
The RESS 2 is the second auction-based support scheme where grid-scale renewable electricity generation projects are invited to compete to receive a guaranteed price for the electricity they generate.
What is the RESS scheme?
The RESS is an auction-based support scheme where grid-scale renewable electricity generation projects are invited to compete to receive a guaranteed price for the electricity they generate.
How does a RESS auction work?
Projects bid competitively for the right to sell electricity at the price bid.
 Terms not defined in this note are those defined in the RESS 2 Terms and Conditions, October 2021.
Eoin is a partner in our Construction team specialising in Energy law. In addition, Eoin is our Energy sector lead. He is recognised as a leading practitioner and has advised on almost half of the renewable power on the Irish Grid.
Eoin has acted for developers, investors and funders on the development, financing, acquisition and disposal of a significant number of energy projects. Notable projects include the first solar park and largest wind farm in Ireland.
He also provides advice to clients on complex infrastructure projects during development, construction and operation.
In contentious matters, Eoin has acted for clients in a number of Court proceedings, conciliations and arbitrations representing the interests of contractors. He has also advised on the resolution of disputes in high-value matters in the energy and construction sectors.
Lecturer on the Law Society’s diploma in Environmental and Planning Law
University College Dublin, (BBLS) (Dip. Arb. Law)
Association Internationale des Jeunes Avocats (AIJA)
Irish Wind Energy Association (IWEA)
President of the Energy and Environment Commission in AIJA (International Association of Young Lawyers)
Eoin has acted for:
Acted for the National Treasury Management Agency as controller and manager of the Ireland Strategic Investment Fund on the structuring of an investment with Capital Stage AG for investment in solar projects.
Acted for NTR plc. in respect of its successful acquisition of the Bunnyconnellan wind farm.
Acted for Element Power Ireland Limited in its successful acquisition of Kilathmoy wind farm.
Acted for Nord LB in the financing of the Knockalough wind farm.
Acted for Greencoat Renewables plc. in respect of its successful acquisition of the operational Tullynamoyle II Wind Farm.
Acted for Allied Irish Banks plc. on the financing of the construction, operation and maintenance of the Killala Community Wind Farm.
Advised Cubico Sustainable Development Limited as owner of the 90 MW Cordal wind farm in relation to the termination of FIDIC based contracts and associated matters arising from the examinership of Dennis Moriarty the Kerries Limited.
Advising the Department of Communications Climate Action & Environment on the Project Agreement for the National Broadband project in respect of design, build and operate arrangements.
Advising the Environmental Protection Agency in relation to financial provision requirements for the EPA’s licensing regime including the potential for using insurance as a financial provision.
Advised Panelto Foods Unlimited on the design and construction of a multi-million euro extension of its industrial bakery and food processing factory in Longford.