The Small-Scale Renewable Electricity Scheme (SRESS) is set to open later this month. SRESS is the new flagship scheme designed to enable farmers, SMEs and community groups to develop small-scale solar farms, wind turbines and line rooftops with solar panels by providing a fixed tariff rate for exported electricity over a 15-year period.
The scheme is an opportunity to develop a vibrant, thriving farm-scale wind and solar farm industry – akin to what is available across the border in Northern Ireland or in other parts of Europe. However, the scheme has been seen as a disappointment by farmers due to low tarrif rates.
For small-scale solar farms, a viable farm project may be achievable only under highly favourable conditions. If you can secure planning permission, are located within a reasonable distance of an electricity grid with sufficient capacity, have access to low-cost finance and can procure equipment and services at competitive prices, then a project might be viable.
The same applies to large-scale solar rooftop export projects, but the feasibility becomes even more challenging here. As for wind energy, nearly every model I’ve reviewed struggles to make a feasible case due to the low tariff rates.
SRESS V RESS
The Department of Environment, Climate and Communications states that, for the farmer and SME category, SRESS guarantees tariffs that are 20%-30% higher than the average price in the third Renewable Electricity Support Scheme (RESS), which is designed for large-scale wind and solar farms.
However, in the latest RESS auction, large, multimillion-euro wind farms secured a price of just over €0.09/kWh. In contrast, farmers who wish to install a single wind turbine on their farm under SRESS will receive only €0.08/kWh.
Solar farms under RESS achieved prices of approximately €0.10/kWh. Comparatively, small-scale solar projects under SRESS receive between €0.12 and €0.13/kWh. The reason large-scale solar farms now cover hundreds of acres is to take advantage of economies of scale. Despite the marginally higher tariffs for small-scale solar, it isn’t enough to offset the significantly higher per-unit costs associated with smaller installations.
We spoke to the main farm and renewable organisations about the scheme. Here is what those who got back to us had to say.
Publish model – MREF
The Micro-Renewable Energy Federation (MREF) has called on the Minister for the Environment and his Department to publish the economic model behind the new SRESS to show farmers, businesses and communities how investing in small-scale renewable projects under this scheme makes economic sense.
MREF chair, Ciarán Kells, said that MREF’s assessment is that the proposed renewable export scheme for systems up to 6MW only makes economic sense if no borrowings are required.
“Very few, if any farmers, businesses or communities will be able to invest into a SRESS project without significant borrowings. There is little incentive for participating in a SRESS project if all the income from the project ends up repaying debt and maintaining the project over the 15-year life of the scheme.”
Kells said that all stakeholders need to understand the economic modelling behind the SRESS initiative: “As we called for last August, the minister and his department should immediately release this detail and demonstrate to potential community and business investors how this new SRESS makes for a good return on the money they are being asked to invest.”
Unrealistic prospect - INHFA
Richard Mannion, National secretary of the Irish Natura & Hill Farmers Association (INHFA) said: “As a person working on energy self-sufficiency in my community over the last number of years, I will not be getting excited by the launch of the SRESS.
“Through our Solar Meitheal project, we have worked extensively with householders, aiming to achieve energy self-sufficiency using small-scale hybrid wind and solar installations. However, under the SRESS, the scale of installations required – 50kW to 6MW for solar and 1MW to 6MW for wind – does not align with the needs or capabilities of community groups like ours.
“Given the capacity and standard of the local grid network, even without a formal grid connection assessment, it is clear that a connection is unfeasible in our area. The nearest substation is 30km away, and the financial burden of funding a connection over this distance would only be justifiable with multiple 6MW turbines – an unrealistic prospect for community-led initiatives” Mannion said.
Be aware - ISEA
The Irish Solar Energy Association (ISEA) welcomed the publication of the terms and conditions for the SRESS. However, Conall Bolger, CEO of ISEA, added: “There are some practical details of which applicants should be aware. Eligible projects receive payment through a power purchase agreement (PPA) with a supplier which have some legally required timelines and processes. The ability to change PPA provider is a bit constrained under the rules, so we’d suggest shopping around.
“The final PPA price negotiated with a supplier may not exactly match the published tariffs. Suppliers are exposed to a range of costs in managing these contracts, for example they aren’t compensated for projects being turned down for system reasons or if the market price falls below zero. There may be value in getting a few quotes for comparison.
“There are set volumes of project to be supported under the different categories. Practically, it will be a case of first come first served, and the scheme is not planned to be reviewed for three years.”
Bolger concluded: “This announcement is ultimately a good news story, though people need to enter the process with their eyes open.”
Align rates - IWFA
Paddy Phelan of the Irish Wind Farmers Association (IWFA) said: “While we welcome the Government’s ambition to support community-led renewable energy projects, we urge the department to carefully consider industry feedback to ensure the scheme’s success”.
He said that, his members remain concerned about key challenges related to grid access, restrictive ownership models, market pricing and dispatch risk that could undermine the ability of small wind projects to thrive under the current framework. The imbalance in support rates between wind and solar technologies risks sidelining community wind initiatives and limiting opportunities for SMEs, he continued.
It’s strongly recommended after the closing of the first call for projects that the rates offered for wind are aligned with those of solar, concluded Phelan.
Index linked - ICMSA
Welcoming the launch of the SRESS, the chair of the Irish Creamery Milk Suppliers Association (ICMSA) Farm Business Committee, Pat O’Brien, described the scheme as a positive step in the right direction, that provides a diversification option for farmers with suitable land for renewable projects.
In terms of making it a viable option for farmers to construct renewable projects themselves – rather than via developers – O’Brien said that it is important that the Government clarify firstly that the payment will be index-linked and secondly that the issue of grid capacity, grid connection, associated costs and planning timeframe issues need to be resolved as they represent major barriers for farmers considering renewable projects.
Disparity in tariffs – IGG
Clive Carter, secretary of the Irish Grain Growers (IGG) said the announcement lacks serious ambition to meet our renewable and Climate Action Plan targets. The tariff rates for export aren’t where they should be to encourage farmers, that have incredible potential in the area of renewable energy, particularly with solar on shed roofs with the investment required, he said.
The disparity in tariff rates and linking farmers with SMEs adds to the potential issues, many farms are also very limited in the grid network and can only operate from single-phase, while upgrading to three-phase puts this out of reach for the majority of farmers, Carter continued.
Concerned - WEI
Justin Moran, director of external affairs with Wind Energy Ireland, said: “Supporting communities and SMEs to develop and own renewable energy projects is important not just to decarbonising our energy supply, but to ensuring people, particularly in rural Ireland, can fully share in the benefits of Ireland’s energy revolution.
“The publication of the terms and conditions for SRESS just before Christmas is very welcome, but we would remain concerned that the tariff for wind energy projects is set too low and hope that, as the scheme is rolled out, close attention is paid to the effect those rates are having on participation.”