Key T&C changes for the third auction under the Renewable Electricity Support Scheme (RESS 3)

08 May, 2023

RESS 3 will be the third onshore auction run by the Irish Government. The aim of RESS 3 is to support additional onshore wind, solar and hybrid generation as part of the Government’s ambition to reduce emissions by 51% and deliver 80% of Ireland’s electricity from renewable energy sources by 2030. RESS 3 is expected to deliver 2,000-3,500GWh in renewable electricity. The terms and conditions of RESS 3 are broadly in line with RESS 1 and RESS 2, albeit with some key changes.

The key changes to the terms and conditions for RESS 3 include the following:

1. Letter of offer for grid connection

Projects must have a letter of offer for a grid connection to bid in the auction. This condition has been introduced to minimise speculative bids in the auction and the consequent material risk to project delivery.

2. Introduction of the Unrealised Available Energy Compensation (UAEC)

The UAEC is a payment in addition to the RESS floating feed in premium support. It is paid where a RESS project has the availability to generate, but does not generate to the level of its availability. This is a positive change from a developer’s perspective as it will “significantly de-risk RESS participant exposure to uncertainty surrounding curtailment and oversupply”.

3. Indexation

There will be a limited form of indexation throughout the support period on the operation and maintenance element of projects, with 30% of a project’s offer price to be linked annually to the Harmonised Index of Consumer Prices (HICP). This is expected to drive bid prices down compared with previous auctions where, against a backdrop of high inflation, developers included a risk premium in their bid price.

4. Price cap

Under RESS 3, the highest permitted bid will be lowered (price cap to be confirmed) to reflect the introduction of the UAEC and indexation.

5. Withdrawal from RESS

Once support commences, projects must remain in the scheme for a minimum of 12 months.

6. The Community Projects preference category will not be included in RESS 3

Support for communities developing renewable energy projects will be provided under the Small-Scale Generation Scheme (SSGS), which is due to be launched later in 2023.

We are here to help you

We have seen a number of changes as the Irish Government’s support for renewable energy projects continues to evolve from the earlier REFIT subsidy schemes to RESS 3. Given our experience working with public and private sector clients in the renewable energy sector, we are ideally positioned to assist you with financial advisory services in respect of these schemes including financial modeling, deal structuring and negotiation and strategy review.