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Ireland launches national support scheme for non-domestic Renewable Heat

The Irish Minister for Communications, Climate Action and Environment, Denis Naughten TD, is introducing a national Support Scheme for Renewable Heat after securing Government approval. The Scheme is meant to financially support the switch from fossil fuel heating systems to renewables for large heat demand non-domestic users. This covers commercial, industrial, agricultural, district heating, public sector and other non-domestic businesses and sectors outside the emissions trading system (ETS).

According to Minister Naughten, the new Renewable Heat scheme will “kick-start” the Irish biomass and biogas sectors such as wood pellet production from sawmill residues.

Under the 2009 Renewable Energy Directive (RED), Ireland has a target of 12 percent of its energy consumed in the heat sector to come from renewable energy sources by 2020.  Currently, 6.8 percent of the energy consumed in the heat sector is renewable.

The Support Scheme for Renewable Heat is a tangible and viable measure that will kick-start the biomass and biogas sectors. Crucially it will provide the basis to create new commercial opportunities for farmers in heat technologies including biomass boiler installations and new opportunities for foresters. It will also contribute to meeting Ireland’s 2020 renewable energy and emission reduction targets, Minister Naughten said.

Budget 2018 allocated EUR 7 million to fund the initial phase of the Support Scheme for Renewable Heat next year. according to a statement, the Scheme is designed to ensure that air quality impacts will be addressed to support sustainable biomass use in installations, using best available technology and emission abatement.

The development of the Support Scheme involved detailed economic analysis, extensive engagement with industry and the publication of two public consultations on the design and implementation of the scheme.

My Department received almost  200 submissions from the public and the final design of the scheme incorporates the findings from these submissions. Securing Cabinet approval this week was a key milestone in order to move to the next stage of the Support Scheme for Renewable Heat which will provide an opportunity for growth in the domestic biomass sector, said Minister Naughten.

The Support Scheme for Renewable Heat will consist of two types of support mechanism:

  • An on-going operational support (paid for a period up to 15 years) for new installations or installations that currently use a fossil fuel heating system and convert to using biomass heating systems or anaerobic digestion heating systems;
  • A grant of up to 30 percent to support investment in renewable heating systems that use heat pumps.

Scale reduction ratio and eligibility criteria to prevent “windfall gains”

The maximum tariffs paid will be 5.66 cents per kilowatt-hour (kWh) of energy produced from biomass heating systems and 2.95 cents per kWh of energy produced from anaerobic digestion (AD) heating systems.

The proposed tariffs (table courtesy Dept. Communications, Climate Action and Environment).

The tariffs paid will reduce with increasing output reflecting the economy of scale associated with larger systems. Other technologies and methods of support are under consideration, including biomethane grid injection, for subsequent phases of the Scheme.

The economic analysis shows that biomass and anaerobic digestion have a significant role to play in Ireland’s renewable energy future. The production of biomethane from anaerobic digestion and its injection into the natural gas grid has significant potential in Ireland. In addition to being a source of renewable energy, it can also provide an outlet for farm wastes. My Department continues to examine how best to support biomethane production and, as part of this work, we will be holding a workshop with industry early in the new year, Minister Naughten noted.

Highlighting the budgetary control measures in place, Minister Naughten added that “the lessons learned” from schemes in other jurisdictions have been included in the design of this support scheme such as eligibility criteria that projects must conform to over the period of support payments.

These criteria will ensure that heat generated under the Scheme is applied to useful purposes only. In addition, there are a number of budgetary controls in order to control overall costs including project budget caps, a Scheme budget cap and periodic reviews to prevent windfall gains, Minister Naughten said.

The Sustainable Energy Authority of Ireland (SEAI) will administer the Scheme and develop the detailed Terms and Conditions, including eligibility and sustainability criteria and these must be approved by the Minister for Communications, Climate Action and Environment.

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