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Tariff tweaks risk to Irish small sites

IRELAND: Developers of smaller wind power in Ireland are alarmed at the government's proposals to tweak the renewable energy support mechanism.

At the Irish Wind Energy Conference in March, Jim O'Malley of small-development firm Western Power accused the Department of Communications, Energy and Natural Resources (DCENR) of tampering with the way that the renewable energy feed-in tariff (Refit) operates for small wind.

Retailers who contract with renewable generators are compensated under the Refit for any additional costs from buying electricity from renewables. Some 400MW of operating renewables are already receiving support under the fixed-price tariff mechanism and there is over 1GW of Refit projects in development. The government is also working on plans for a further tranche of Refit, subject to EU state-aid approval. The government has not published its proposals for tweaking the Refit, but rumours about the changes have been rife.

O'Malley complained that the changes being considered by the DCENR threaten his project, which comprises five turbines totalling 4.5MW in Mayo, west Ireland. "They are altering the system when we've got turbines ordered to be installed this year," he said. "This is undermining the stability and the financial case for such projects."

Peter Bailey from Viridian said that many developers are concerned the changes will be applied retrospectively to projects already under development, not just those that will be supported in the next tranche of Refit. "Changes going forward are one thing," he said. "But if they have retrospective implications it has the potential to send out signals that this is a market that's very difficult to invest in."

Martin Finucane, head of the sustainable and renewable energy division of the DCENR, stressed that his department was looking at just a small number of issues concerning how the Refit operates.

He explained that the operational fine-tweaking relates to the technology payment, which is the difference between the basic Refit price for large wind and the prices paid to more expensive technologies, such as small wind, hydro and biomass. "It's more a question of interpretation and delivery than any fundamental change to the terms and conditions or rates of the existing scheme," he told the conference. The change is required to comply with EU state aid rules. Around 97% of Refit projects will be unaffected, he said.

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