Written answers

Thursday, 8 July 2010

Department of Communications, Energy and Natural Resources

Alternative Energy Projects

10:00 pm

Photo of Paul KehoePaul Kehoe (Wexford, Fine Gael)
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Question 575: To ask the Minister for Communications, Energy and Natural Resources the reason there is a delay in extending REFIT one when the end date was known for years; the current status of the REFIT one State aid clearance application; the reason our REFIT does not include solar PV; the reason our REFIT does not reward for generation of clean green electricity; when is our REFIT going to come into line with the United Kingdom REFIT system; and if he will make a statement on the matter. [31533/10]

Photo of Eamon RyanEamon Ryan (Dublin South, Green Party)
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REFIT is the 'Renewable Energy Feed-in Tariff' scheme, which is the support scheme for renewable generation administered by the Department of Communications, Energy and Natural Resources. Prior to the introduction of REFIT, renewable generation was supported through a tendering scheme known as AER (Alternative Energy Requirement.)

State aid clearance for the original REFIT scheme was obtained from the European Commission in September 2007. The objective of REFIT was initially to provide support to deliver on Ireland's electricity directive target of 13.2% of all electricity to be from renewable sources by 2010 and to facilitate delivery of our higher national target of 15% renewable electricity by 2010. The scheme was successful in delivering the required level of capacity.

Like all support schemes for renewable technologies, REFIT is kept under review to ensure that it can continue to deliver the market build rate required at as reasonable a cost as practicable to the electricity consumer who pays the costs through a Public Service Obligation levy.

The original REFIT scheme covered small hydro (5MW and below), small wind (5MW and below), large wind (above 5MW), landfill gas and biomass combustion. Solar PV was not included for cost reasons, as the support levels traditionally required by solar PV are significantly higher than those of other technologies.

REFIT extension is designed to extend the scheme in line with delivering on our 40% 2020 target. The extension application has been submitted to DG Competition in Brussels for consideration for State Aids clearance.

By supporting a fixed price 15-year contract REFIT generation rewards clean green electricity. For example, in the current 2009/2010 PSO period, CER Decision 09/119, the estimated market price is €52 MW/h. This is well below the REFIT tariff levels and suppliers are compensated for the additional costs in accordance with the REFIT terms and conditions.

The UK uses a system of tradeable certificates called ROCs to support renewable electricity generators. The UK uses feed in tariffs in the electricity sector only for small scale micro-generators. Every Member State operates its own renewable energy support system and there is no common European support scheme in place. The REFIT scheme has delivered on its objectives to date and there are no plans to adopt the UK model in Ireland.

Photo of Paul KehoePaul Kehoe (Wexford, Fine Gael)
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Question 577: To ask the Minister for Communications, Energy and Natural Resources the reason the national renewable energy action plan draft states that there is no accredited training course for hydro when in fact there is; the further reason NREAP draft says otherwise when the Sustainable Energy Authority of Ireland website confirms there is an accredited course for hydro; NREAP draft states that membership of Renewable Energy Installer Academy also qualifies as equivalent to an SEAI registered installer, so when there is an REIA register of hydro installers the reason the NREAP draft states there is no accredited training course for hydro when NREAP draft is contradicting itself; the reason NREAP draft does infer that there is a list of microgeneration installers when in fact there is not as there is no link on the SEAI website to a microgeneration installers list; and if he will make a statement on the matter. [31535/10]

Photo of Eamon RyanEamon Ryan (Dublin South, Green Party)
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There is currently no accredited course for hydro in Ireland. The micro-hydro course on offer by the Renewable Energy Installer Academy (REIA) is not accredited as confirmed by the Sustainable Energy Authority of Ireland (SEAI) with City and Guilds and contact directly with the REIA.

The SEAI website refers to City and Guilds accredited microgeneration courses offered at the REIA. The PV and Wind courses offered are accredited to City and Guilds but the micro-hydro one is not.

Membership of REIA implies appropriate accredited training has been taken which would deem one eligible to be included on the SEAI registered list. Currently there are only registered lists for renewable heat products supported under the Greener Homes Scheme. The REIA courses for heat have been accredited under the National Framework of Qualifications.

The draft National Renewable Energy Action Plan (NREAP) notes that lists for installers of renewable heating technologies are published and lists of trained microgeneration installers are being developed.

Photo of Paul KehoePaul Kehoe (Wexford, Fine Gael)
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Question 578: To ask the Minister for Communications, Energy and Natural Resources if his attention has been drawn to the fact that the draft national renewable energy action plan states that the microgeneration pilot programme was announced in February 2009 in view of the fact (details supplied) that it was announced in April 2008; the reason this discrepancy was ignored when brought to the attention of NREAP during the public consultation period; the reason the Sustainable Energy Authority of Ireland could not fill the quota of 50 sites; the reason there is no monitoring equipment yet installed; the further reason the programme is so far off the schedule indicated during the consultation meeting on 30 September 2008 at the Crowne Plaza Hotel, Santry, Dublin; the reason a pilot programme run for tried and trusted technologies rather than emerging and developing ones such as ocean energy; if the major delays in the programme will affect the feed in tariff coming into line with the United Kingdom REFIT system; and if he will make a statement on the matter. [31536/10]

Photo of Eamon RyanEamon Ryan (Dublin South, Green Party)
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While I announced plans for a microgeneration pilot trial in 2008, the Sustainable Energy Authority of Ireland's (SEAI) small- and micro- scale generation pilot field trial was actually launched on 26th February 2009, as an open call for proposals, with defined eligibility and evaluation criteria for proposed generator installations and a defined profile of sites and technologies sought.

The public consultation period on the Draft National Renewable Energy Action Plan has been completed and all submission are being considered in the context of finalising the Plan.

At the meeting of 30 September 2008, it had initially been envisaged that the SEAI pilot would be launched. However, around this time ESB was considering offering a microgeneration feed in tariff to domestic customers. ESB subsequently decided to proceed with this scheme and it was decided that it would be beneficial if both schemes could be launched concurrently, given their obvious linkages.

The target of the SEAI pilot scheme was to fund circa 50 representative sites encompassing the potential diversity of technologies, applications and site types and locations in the wider market. This included a target of 25 wind installations with different targets depending on generator type. The call for proposals effectively relied on the market to deliver eligible proposals for installations and to subsequently deliver the commissioned installations.

The initial rate of applications to the pilot was low and many applications received were incomplete and failed to meet the defined eligibility criteria. Aside from incomplete applications, the principal deficiencies in applications were largely related to evidence of product quality and certification and installer training. In many cases obtaining this evidence significantly delayed the evaluation of applications and the award of grants. Some applications did not succeed due to the fact that planning exemptions did not demonstrably apply at the proposed sites and that evidence of planning permission or confirmation of exemption could not be produced.

The first grant offer was issued in July 2009 and offers were issued as applications were received and evaluated. Over 110 applications were received up to the close of the call for proposals in September 2009. There were 63 qualifying applications, with 20 applications being withdrawn either due to lack of financing or planning constraints. There are currently 43 projects participating in the pilot field trial comprising 27 wind turbines 15 solar photovoltaic installations and 1 hydroelectric turbine.

SEAI issued a call for tender with regard to the monitoring element of the pilot. Following the decision to award the tender to a particular company, negotiations on the contract terms commenced and have proven protracted, which has led to an acknowledged delay in commencing monitoring.

The rationale for the pilot microgeneration scheme is outlined at length in the draft National Renewable Energy Action Plan currently available on the Department's website.

The principal objective of the pilot is to investigate and test technical, market and regulatory issues associated with the installation, network connection and operation of small and micro scale generation technologies. An associated programme objective is to assess measures required for supplier and product qualification to minimise the risk of adverse outcomes at small-scale and micro-generation installations, hence promoting the robust growth of a supply base.

It is recognised that the equipment used for microgeneration needs to be safe and reliable and should perform to the specified standards. Installation quality may also impact performance and safety, and therefore there is a need for standards for microgeneration installations and for installer training. By ensuring that the technical specifications and standards for equipment and installations are properly defined, the secure running of the electricity system can be maintained. There are therefore significant issues to be addressed which merited the running of the pilot trial.

In the context of developing a comprehensive microgeneration framework, the case for a wider support scheme for microgeneration is being assessed.

Photo of Paul KehoePaul Kehoe (Wexford, Fine Gael)
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Question 579: To ask the Minister for Communications, Energy and Natural Resources the reason there is a mismatch between ACA and REFIT schemes; if there are any plans to remedy this; and if he will make a statement on the matter. [31537/10]

Photo of Eamon RyanEamon Ryan (Dublin South, Green Party)
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The rules applying to the Scheme of Accelerated Capital Allowances (ACA) for Energy Efficient Equipment are set out in section 285A of the Taxes Consolidation Act 1997, as inserted by the Finance Act 2008. Those provisions require that for a particular technology to be eligible for accelerated capital allowances, an Order in required specifying the minimum energy efficiency criteria to be met by such products. The Order must also name individual products that meet these criteria. Any company paying corporation tax can claim the accelerated capital allowance based on their records of purchase of a named product.

I have made five such Orders to date on the basis of a range of criteria drawn up by the Sustainable Energy Authority of Ireland (SEAI) for 29 technologies, following a period of industry consultation in each case and based on lists of named products meeting these criteria, submitted to SEAI by manufacturers or their agents. The range of technologies eligible for the scheme will increase to almost 50 following a further Order in August listing criteria and products for additional technologies added to the Scheme by the Minister for Finance in Budget 2010.

To date, it has not proved feasible to establish minimum energy efficiency criteria to be met by commercial scale hydro electric power solutions or to name specific hydro products in an Order. Modern hydro solutions such as screw turbines tend to be bespoke solutions, designed by the manufacturer for each individual site. As such, there are few, if any, "off the shelf" products that can be named in an Order. While it may be possible to establish the efficiency of a particular hydro solution after installation on site, given the volume of products named in ACA Orders (close to 7,000 at present), the ACA Scheme does not and cannot seek to establish the energy efficiency of solutions after they are installed on a company's site. Rather, the energy efficiency of standard products available for purchase by any buyer is established before they are named in the Order and compared to the minimum criteria for the scheme. This is possible for solar PV and wind turbine solutions as standard products are available on the market, but at present is not feasible for hydro.

There is at present no REFIT tariff for solar PV. The cost of REFIT tariffs are recovered on the basis of public service obligation levies on electricity users. The high cost of solar PV generation makes a PSO levy for this technology impractical at this time. However, given continued technological development, the matter will be kept under regular review.

Photo of Paul KehoePaul Kehoe (Wexford, Fine Gael)
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Question 580: To ask the Minister for Communications, Energy and Natural Resources when suppliers will be obliged to buy electricity from renewable generators; when the PPA period will be extended to come in line with the United Kingdom and other European countries; and if he will make a statement on the matter. [31538/10]

Photo of Eamon RyanEamon Ryan (Dublin South, Green Party)
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REFIT is the 'Renewable Energy Feed-in Tariff' scheme, which is the support scheme for renewable generation administered by the Department of Communications, Energy and Natural Resources.

The original REFIT scheme covered small hydro (5MW and below), small wind (5MW and below), large wind (above 5MW), landfill gas and biomass combustion. I have announced the expansion of REFIT under certain terms and conditions to cover additional technology categories, namely ocean energy (wave and tidal), offshore wind, anaerobic digestion high efficiency CHP and biomass co-firing.

The REFIT scheme allows generators of electricity from renewable sources (in the technologies covered) to secure the necessary investor confidence to finance debts. Renewable generators enter into 15-year power purchase agreements with suppliers at negotiated and fixed prices. Via the Public Service Obligation (PSO) levy mechanism, REFIT compensates participating retail electricity suppliers according to the REFIT terms and conditions for the net additional costs attributable to their participation in the scheme and purchase of electricity from the relevant generators in the REFIT scheme.

The length of the power purchase agreements in Ireland (15 years) for renewable generation eligible for REFIT compares favourably with the length of power purchase agreements in other EU Member States and offers the necessary stability to secure financing.

Insofar as the UK is concerned, their main support scheme is not a feed-in tariff scheme, but a Green Certificate scheme. The Renewables Obligation is the main support scheme for renewable electricity projects in the UK. It places an obligation on UK suppliers of electricity to source an increasing proportion of their electricity from renewable sources. A Renewables Obligation Certificate (ROC) is a green certificate issued to an accredited generator for eligible renewable electricity generated within the United Kingdom and supplied to customers within the United Kingdom by a licensed electricity supplier.

In terms of harmonisation of support schemes, this is something that the European Commission has been looking at for several years. In SEC(2008) 57 published in January 2008, the Commission staff working document on the support of electricity from renewable energy sources which accompanied the proposed Renewable Energy Directive, the European Commission concluded that it was inappropriate to harmonise European support schemes at that time. Ireland does not have any plans to harmonise our support scheme with any other Member State at present.

Photo of Paul KehoePaul Kehoe (Wexford, Fine Gael)
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Question 581: To ask the Minister for Communications, Energy and Natural Resources the reason the greener home scheme is rewarding persons for installing a larger surface area of inferior solar panels that have poor annual yield and penalising people who install a smaller surface area of superior solar panels that have a very good annual yield; and if he will make a statement on the matter. [31539/10]

Photo of Eamon RyanEamon Ryan (Dublin South, Green Party)
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I am informed by Sustainable Energy Ireland (SEAI) that there are two types of solar technology supported by the Greener Homes scheme, namely evacuated tubes and flat plates. Evacuated tube solar products are more efficient than flat plate products if compared on an area basis.

SEAI also indicate that evacuated tubes are, however, not suitable for all applications, and thus a significant market remains for flat plate products. To ensure the consumer will utilise the more effective technology when appropriate, Greener Homes Scheme gives a greater subsidy per unit area for evacuated tube systems than it does for flat plate products - €300/m2 for evacuated tube products and €250/m2 for flat plate products.

The Greener Homes Scheme supports the installation by householders of renewable energy heating technologies including wood-pellet and chip stoves and boilers, gasification boilers, solar panels and geothermal heat pumps. The grant is a fixed amount, based upon the particular technology selected, towards the cost of purchase and installation of the chosen scheme. Products and installers must be selected from published Sustainable Energy Authority of Ireland (SEAI) registered lists. The net number of applications from 2006 to date under the Scheme is 29,000. Nearly 25,000 installations have been completed under the Scheme. Exchequer funding to date has amounted to just under €62m.

The Greener Homes Scheme has created a stable market in domestic renewable energy technologies and has supported the development of the renewable heating industry.

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