The government expects some 485 MW to come from onshore wind, while natural resources minister Dermot Ahern says AER-6 will support two offshore projects. "I am anxious to test true market interest and readiness to deliver offshore projects in the short term," he says. Other renewable technologies eligible for support are small scale hydro, landfill gas and biomass.
The 15 year power purchase contracts that developers will compete for are confined to projects that already have planning permission. The launch of the latest bidding process follows a year after contracts were awarded in AER-5, but progress so far on building AER-5 projects has been slow -- attributed by the Irish Wind Energy Association largely to the lack of adequate financial incentives. As a result of lobbying by the renewables industry, AER 6 contract prices will be fully indexed linked -- and projects that won contracts under the previous AER round will be allowed to re-enter to take advantage of the more favourable terms.
Developers will also be able to opt for an accelerated payment in the early years. "I expect this innovation will address the equity deficit quoted as a major impediment by the industry," says Ahern. The minister wants to see the projects built quickly to help meet the government's target of 500 MW of electricity from renewables by 2005. "There is no reason why some projects cannot build this year with substantial growth following in 2004 and more challenging projects generating by 2005."
Ahern sees the AER program as a major step towards delivering on Ireland's Kyoto commitments for reducing greenhouse gases. He says the next step is for consultation on a support mechanism to help Ireland meet its 2010 targets. "I am determined that whatever mechanism we choose will be put into place over the next twelve months or so and that it will be a system that will allow the renewable industry to develop apace."