Oireachtas Joint and Select Committees
Wednesday, 4 December 2019
Joint Oireachtas Committee on Climate Action
Renewable Energy - Wind, Solar and Biogas: Discussion
Mr. David Maguire:
We are grateful to the Chairman and members for affording us the privilege to present today. For those who are not aware, the ISEA has been lobbying for support for solar energy since May 2013. We are an all-island trade representative body with approximately 17 members in the solar space. It has been a very exciting month. We have seen a real sense of urgency that I have not seen in some time. The publication of the climate action plan is to be very much welcomed. The phasing out of peat stations is also to be welcomed. The approval by the Government of the renewal energy support scheme, RESS, with a revised goal to deliver up to 70% renewables in our electricity mix by 2030 is really ambitious and extraordinarily challenging. It will require a step change from both the public and private sectors in terms of how we approach renewables.
In terms of the quantum, we are proposing to deploy more than 12 GW of capacity between now and 2030. The background is that we have only managed to deploy 3.8 GW in almost two decades, which indicates the extent of the challenge that we face in the renewables sector. It is a matter of regret that we have not achieved our 2020 climate change targets. That is very disappointing, particularly as the solar industry has had more than 0.5 GW of available fully-permitted projects ready to come online before 2020. Moving forward, we have seen financing costs at a record low in terms of infrastructure, whether that is for wind, solar, biomass or others. We are also seeing a massive cost reduction in those technologies, which are also historically low. Despite our heretofore limited deployment of these technologies, our late mover advantage is that we have never been able to bring them online at a lower price than is the case today.
We have 1.3 GW of solar capacity fully permitted, with grid connections available, land and permits secured, with a further 1 GW due to receive offers for grid connection coming out of enduring connection policy, ECP-1. The industry has been investing since 2016 to be ready for the RESS auctions. While I very much welcome the Minister's announcement and the carving out of solar, it is only 10%, which represents a maximum of 300 MW in the first auction. That is a little disappointing. As an industry, we also welcome the community element. It was originally proposed in the high-level design of RESS that community schemes would not come online until the second auction but the Department has stepped forward and brought that into the first auction. We think that is a great thing to do, although it will be very challenging to get community schemes correct. We have experience of that in other jurisdictions. We also very much the proposal for a €2 community contribution for every megawatt hour of generation. In terms of community funding, we have seen challenges in other jurisdictions but there are now methodologies and technologies that can make this more efficient such as crowd-funding, where a €10 investment has the same transaction cost as €100,000. The challenge is not slowing up the deployment of the renewables while the communities raise capital. We ask the committee and the Government to consider whether the Ireland Strategic Investment Fund, ISIF, or another organ of the State could perhaps provide bridging finance to allow community finance to come on board.
Switching back to solar, the KPMG report specifically shows that we are an industry which could quite easily deploy 4 GW by 2030. We believe we can do a great deal more than that, and in the process create 7,300 jobs, and a significant value in terms of gross value added to the economy in tax take in the order of about €3 billion in that timeframe between now and 2030.
Despite the positive news we have had in the past month, some serious barriers remain in the context of the deployment of renewables and solar in Ireland. What we would like to see is more frequent auctions rather than four auctions between now and 2027. As well as being more frequent the auctions should also dovetail with when the grid is available to take those assets online. We would also like to see some consideration being given to reduce the cost and the time to connect and operate on the Irish grid system. I very much welcome the moves that ESB Networks has taken in terms of engaging with industry to look at those costs but, frankly, this is something we have been talking about for four years. We have the highest grid connection costs in Europe. That means it is a higher levelised cost of energy, LCOE, because at the end of the day it is the consumer that pays.
We would also like to see legislative change to allow private wire in Ireland, whereby a generator can connect directly to the consumer. This is quite a frustration for us coming from other jurisdictions in Europe where we are able to supply real power behind the meter and to have private wire across third party lands.
In the lead-up to the auctions, we would like to see a standardisation of rates and development contribution, which are leading to massive uncertainties in the auction process. We need a standardised local authority rate and a standardised development contribution. We would also like to see a fair price in terms of feed-in tariff for rooftop solar. Under our obligations in the renewable energy directive, I believe we are obliged to provide a fair price for the wholesale price of power for any power that a consumer does not use themselves. That is really important because it will change the behaviour of the public in terms of the way people consume and sell electricity themselves. What may help to start the rooftop deployment of solar in Ireland is this feed-in tariff along with, potentially, a reduced VAT rate for renewable energy assets on houses such as, for example, solar photovoltaic, PV.
There also needs to be legislative changes to limit the qualification for planning appeals. The wind industry has suffered greatly in the context of extended appeals and the solar industry is suffering also. It is very easy to make an appeal in Ireland, which drags out the deployment of renewables by more than a year. The climate action plan suggests that we need to deploy 8.5 GW of wind between now and 2030. This will be extremely challenging. It will never happen and we will have no chance of achieving it if we do not reform the process of planning appeals. The UK, our nearest neighbour, effectively has a planning exemption in respect of solar for rooftops of up to 2 MW. We ask for planning exemption for 0.5 MW. This would remove the barrier for those who want to install solar on business premises.
We have come along way in the past few months, but we need to overcome some real hurdles. It will require a co-ordinated effort from the public sector and the private sector. The private sector has been waiting for some time. We are ready. We now ask that the organs of the State to step up also. We are beginning to see that.