Inflation link for power purchase contracts

Responding to industry pressure, the Irish government is allowing a greater proportion of power purchase contract prices to be indexed linked to inflation. The contracts will be awarded under the fifth round of the Alternative Energy Requirement (AER 5). The original AER 5 rules say that 10% of the contract price bid by renewable energy developers could be indexed to the consumer price index (CPI) to counter inflation. But Joe Jacob, minister of state at the Department of Public Enterprise (DPE), has agreed to link 25% of the price. This should cover the full operation and maintenance elements of the bid price, states the DPE. AER 5 is to be the largest competition for renewables power purchase contracts so far, aiming for 255 MW of new renewable generation. The closing date for bids from prospective generators is November 30. Jacob says: "Indexing a proportion of the bid price will allow the successful bidders some increases to match inflation. I believe this move will be welcomed by the industry and ensure that we meet our targets under the latest renewable program." The Irish Wind Energy Association (IWEA), however, believes the increase is not enough. Aidan Forde from the IWEA says: "There is still an enormous discrepancy between how conventional generation is dealt with and how wind is dealt with." He points out that state supported peat fired power stations can link 100% of contract prices to the CPI. "The IWEA is mounting a campaign to make the government take this issue seriously."