Éamon Ó Cuív (Galway West, Fianna Fail)
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436. To ask the Minister for Communications, Energy and Natural Resources the assistance available to develop or upgrade micro hydro electric schemes; his plans to develop such assistance; and if he will make a statement on the matter. [50303/13]

Pat Rabbitte (Dublin South West, Labour)
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There are a number of supports currently available for developing or upgrading micro-hydroelectric schemes in Ireland.The primary support mechanism for the support of renewables, including hydropower, is the Renewable Energy Feed-In-Tariff (REFIT) schemes. These schemes were introduced to incentivise the development of renewable electricity generation capacity necessary to allow Ireland to meet its target of 40% of electricity demand from renewable generation by 2020. REFIT is based around 15 year Power Purchase Agreements between generators and suppliers which provide developers with the certainty necessary to finance their projects. REFIT is funded from the Public Service Obligation levy. The REFIT 1 scheme is now closed for applications. The REFIT 2 scheme was opened for applications in March 2012 and has a deadline of the end of 2017 for qualifying projects.

A number of tax based support measures are also available. Tax relief is available under Section 486b of the 1998 Finance Act, on capital directly invested in renewable energy assets. All renewable electricity generating technologies can avail of Section 486B of the Tax Consolidation Act (TCA) 1997 which allows an investor to claim the lesser of 50% of all capital expenditure (excluding lands) or €9.525 million for a single project. Investment by a company or group under this scheme is capped at €12.7 million per annum. Corporate investors in renewable energy projects can claim tax relief on equity investment in capital assets.

The Employment and Investment Incentive Scheme allows individual investors to obtain income tax relief on investments in renewable energy in each tax year. This scheme supersedes the previous Business Expansion Scheme. It provides a minimum tax relief of 30% with an additional 11% accruing at the end of the third and final year if the business has expanded to employ a designated number of people (or if the investment was used for R&D). The scheme has an investment cap of €750,000 and is thus suited to micro-hydroelectricity generating projects. An Accelerated Capital Allowance scheme also allows companies to offset the cost of investment in qualifying renewable energy generation technologies against their tax liabilities in Year 1 rather than over a more prolonged period of years, thus aiding their cash flow.

Finally, renewable energy is also an eligible activity for EU rural development funding identified in the European Agriculture Fund for Rural Development. Individuals or companies developing or upgrading micro-hydroelectric generators may apply for funding under the regional Leader Partnerships.