For the emerging Irish community energy sector, the title of a 2015 article by Kate Ruddock of Friends of the Earth perhaps best summed up the issues. ‘Why does Ireland make community energy generation so difficult?’, she asked. In 2017, the situation hasn’t changed much.
To find out why, we spoke with Michael Phillips, Principal Consultant with renewables consultancy Dulas, about the issues involved with Ireland’s nascent community energy sector and what is being done to grow it.
Decentralized Energy: What is the current state of community energy in Ireland?
Michael Phillips: Overall, the community energy sector in Ireland could be described as being in its nascency. There is one 4.6 MW community energy wind farm in County Tipperary, wholly community-owned, and a couple of emerging solar farms through Claremorris & Western District Energy Co-op. There’s one microgrid and one renewable district heating project at an early stage. The primary focus is on energy demand reduction and energy efficiency measures for communities.
[Pictured: Templederry Community Wind Farm in County Tipperary]
Ireland is driven not just by the EU 2020 target on renewable energy, but also by subsequent targets. They have to be very cautious about how renewable energy is subsidized or supported, because obviously they can’t engage in preferential treatment for one energy form over another, which might be considered anti-competitive. Any subsidy arrangement has to be subject to state aid review. We know the EU is driving member states to avoid or step away from feed-in tariff (FiT) or Renewables Obligation support and go for an auction arrangement – and this is likely in Ireland.
The difficulty with the auction is that it’s very difficult for community energy schemes to understand the bidding process, to know what kind of fees they need to bid in with. They will be very disabled in a competition with a standard developer-utility network. So there are some difficulties with EU regulations and state aid rules as to how community energy would be able to be driven and advanced sufficiently within an auction arrangement.
I don’t see the Irish government backtracking on its commitments under renewable energy targets. There has been large deployment of wind over the last few years, and hopefully community energy would be realized to help achieve those targets. There is a ripe opportunity if the right structures and guidance and support are in place to enable the sector to drive itself forward.
DE: What has Dulas been doing in the community energy sector?
MP: We’re involved in projects across the UK and Ireland. While the mainstay of our work is in the commercial sector for developers and utilities on the large-scale development of renewable energy, we also have worked historically on quite a raft of community energy projects across the UK, with wind, solar and hydro.
We have a particular interest in community energy because several of us within Dulas are also associated with [Welsh] Bro Dyfi Community Renewables (BDCR). We operate two community wind turbines above the Dyfi valley with 200 shareholders, the majority in the local area. I’m also a recent past director of Community Energy Wales.
We have a good track record of designing and consenting our own community turbines; we worked on the well-regulated Awel Aman Tawe community scheme near Swansea as one of the last FiT schemes.
The ethos that drives several of our team members is to try to open up the energy sector into community ownership in the same way it’s been embraced in certain parts of Europe, and to raise awareness of its associated benefits.
DE: What are the issues involved in bringing more community energy to Ireland?
MP: There are two elements: firstly, consultation on regulatory support and subsidy arrangements; the other is around grid connection codes.
There is an astonishing amount of new solar projects that are subject to grid request offers, akin to up to 4.7 GW recorded through applications to ESB Networks (the grid operator in Ireland). There’s a huge pipeline of potential projects but a lot are applying for grid connections around the same substations; the capacity is overloaded and only a certain number of schemes will be able to be connected. This would fulfil Ireland’s obligations in terms of EU targets but the limitations are there on the grid. The consultation is a necessary prerequisite, but it has been delayed and delayed and delayed.
[Pictured: Michael Phillips]
[Irish grid operator] Eirgrid has lots of investment ongoing, but ultimately it will fall to successful developers who go through an auction arrangement (which is expected) and deliver their sites. It will be down to them to pay for electricity infrastructure upgrades. With solar farms we’re talking around a 1-3 km underground grid connection to the nearest substation.
Substations have been a locational driver for solar farms in Ireland. In terms of financial and economic feasibility and viability, solar projects need to be as close to the honeypot of the substation as they possibly can – but only to those substations which have excess capacity and the right voltage arrangements; some don’t because of the weakness of the grid. Not all schemes will be able to connect to the grid. The grumblings I get from developers are that their margins on these schemes are going to be very slim – they can’t afford to outlay too much by way of good connection costs, for example.
Developers have been, at least in my experience, averse to engaging with the community energy sector in Ireland because if they take on a further partner then that will further reduce their returns on projects. So there’s a very sluggish interface between developers and the community energy network in Ireland currently.
There has now been a succession of papers since 2015 that have accentuated the desire for a greater inclusion of community energy as part of the energy mix for Ireland. So again, very much like our experience here in Wales, we have very good policy support and good messages coming from the government, but sadly at this stage there is very little evidence that there will be a community energy strategy broadly across Ireland, and no evidence yet to say that community energy projects would benefit from preferential treatment.
Ireland has had a chequered history on renewable energy, mostly around large-scale wind, and there’s been a public backlash. The public have stronger powers of appealing decisions on new energy projects than they do in the UK, for example. A lot of schemes got bogged down because of public disenchantment with the energy strategy itself. Eighty-nine per cent of Irish people are in support of decarbonization and the renewable energy agenda; the difference is that they see large-scale utilities coming in and harnessing the resource with lip-service payment to local communities. There’s no form of engagement or sense of inclusion for communities or the broader public. So there is disenchantment and difficulty in making progress.
[Pictured: Aran Islands Energy Co-op]
Ireland gets 9.2 or 9.3 per cent of its energy from renewables. The 2020 target is 16 per cent. Everyone recognizes that the developer community will obviously be responsible for financing and bringing through a large pipeline, but community energy groups and the public more generally need to be engaged in the process.
And inclusion is not just matter of bringing it down to the community benefits package. There are a couple of initiatives the developer community can take through community ownership models, and looking at JVs with communities to allow local communities to invest in projects directly and draw benefits from projects. Also, there’s a big driver from Ireland’s sustainable energy association and other parties.
There is a proclamation by nearly 100 organizations in terms of what’s required for community energy ownership across Ireland. They’re interested in a national community energy investment fund where members of the public can pay into the fund and benefit from share interest payments based on generation and revenue.
If the Irish government is to enable community energy to really happen, it needs to evolve a strategy that includes ownership models, includes a pan-Ireland investment fund and, where possible, can provide some sort of preferential treatment to community energy schemes. It might be, for example, that there is an additional premium available to the subsidy if you have community ownership, or more tax-efficient structures that can be put in place to allow projects to get a better return.