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We cannot afford to ignore the potential of solar power

Contrary what you may think solar irradiance in Ireland is good and comparable to much of the UK, is about 78% of that of France and better than the Netherlands, all countries that have deployed significant volumes of solar PV in recent years. In advance of an expected policy support there has been a significant interest in solar in Ireland recently with over 2.5 Gigawatts of solar PV grid connection applications into ESB Networks as of last week. That’s a massive level of investment and interest from the players in the market. It shows a real belief that policy support will be forthcoming. Coillte, Bord na Mona, SSE and now ESB have thrown their hats into the ring having all recently announced that they are seeking to diversify their generation businesses into solar and currently drafting plans to develop significant solar capacity over the coming years. Seasoned industry experts like BNRG Renewables, Power Capital and Amarenco have made significant investment in Ireland already and recruited new teams to develop solar in their home country in anticipation of policy support.

SEAI (technical advisor to government on energy matters) and the EPA (technical advisor to government on environmental matters) have announced recently that we are significantly behind reaching our 2020 targets in electricity, heat and transport. SEAI confirm that we need to deploy 250MW of wind every year between now and 2020 to achieve our renewable targets or risk significant fines from Europe. Yet the average deployment of wind in the last few years has been 177MW per annum. With the rising tide of public sentiment against wind in planning, this is highly challenging and Ireland is likely to face significant fines of over €150 million per 1% of target missed per annum. Despite the fact that large scale solar is the cheapest form of renewable energy after onshore wind and can be rapidly deployed, the SEAI failed to mention solar PV in their recent report, Ireland’s Energy Targets, Progress, Ambition & Impacts. (April 2016). This report is a ‘Summary for Policy-Makers’. This lack of inclusion of solar PV in the thinking of SEAI is a matter of concern as solar is the single most prominent form of renewable energy worldwide (Bloomberg estimate that every year in the last five years, total global investment in solar has surpassed that of wind by a material margin). Indeed The Economist this month estimates that the global new investment in solar last year was over US$161 billion, more than natural gas and coal combined. Europe is still the world leader in solar PV deployed with over 100 gigawatts of installed capacity, yet Ireland is the last EU member to award any policy support to this leading technology. Why have SEAI not mentioned solar PV as a viable renewable energy technology given it is the dominant generation technology globally and the cheapest source of renewable generation after onshore wind in Ireland?

Co-funded by SEAI, The Irish Solar Energy Association (ISEA) commissioned an independent report into the potential of solar energy in Ireland; A Brighter Future, The Potential Benefits of Solar PV in Ireland (KPMG, November 2015) which concluded that for every euro in policy support the industry would return 3 euros back into the economy and would create and sustain over 7,300 permanent jobs. It is widely accepted that solar PV supports significantly more jobs and any other form of renewable energy. As solar can deploy rapidly (1MW per week once in construction) The Report goes on to highlight that solar can make a real and immediate contribution to achieving our renewable energy targets thus avoiding significant fines. It states that Ireland could deploy over 2GW of solar PV on rooftops and in fields between 2017 and 2022 for the cost of less than 1% on the consumer bill.

Under the last support regime Ireland awarded 150MW capacity of Biomass a REFIT(Renewable Energy Feed-in-Tariff) ranging between 8 and 14 Euro cent per KWhr (similar to what solar is seeking). Yet the capacity factor for Biomass is circa 90% (i.e. it generates/operates 90% of the time) and for solar is closer to 12%. Thus on a capacity basis (as you only get paid for what you generate and not on what you install), you could deploy close to 1,000MW of solar for the cost of 150MW of Biomass.

So if solar were to receive a policy support, what could the deployment look like in Ireland? Much of the installations would be located in areas of high solar resource (along the south and east coast) which coincide with areas of demand (the population centres) thus avoiding additional transmission infrastructure (high voltage pylons etc.) and reducing thermal losses and maximising use of the existing grid infrastructure. While there may be over 400 (2.4 GW) connection applications received by ESB Networks, processing these applications has been slow and only a small number of grid offers have been issued. Few of these applications will result in projects built as they will be unviable under a competitive auction due to high grid connections costs (between 50% and 100% higher than other European countries), low solar resource, or high rental payments. Some developers have chosen areas of relatively low solar resource, possibly in an effort to secure land options on more favourable terms. Finally, in an effort to secure land in higher solar resource areas many developers have offered leases with unviable rental payments. The rents currently offered in the market range between €700 and as much as €1,750 per acre per year for 25 years. Anything over €1,000 is likely to struggle in a competitive auction.

 

While no large scale solar projects have been constructed in Ireland to date, I believe that policy support for solar in Ireland is a matter of time as the case is compelling and Ireland cannot ignore the solar opportunity. In 2014, BNRG Identified Ireland as a core strategic territory and appear to be well positioned in the market. We would be keen to grow the home market after spending over a decade deploying solar in other countries around Europe. It would give us huge satisfaction to bring our knowledge and business back home and deploy the cheapest form of renewable energy after onshore wind in Ireland.

Solar PV is a massive global business that Ireland has missed out on this far, but now we have late mover advantage with entering the sector when costs are low and we can learn from the mistakes of others and adopt best practice.  Solar can help ensure that we meet our 2020 targets and avoid costly fines, create more jobs than any other form of generation, and deliver a net gain to the Irish tax payer. We cannot afford to ignore solar.

 

 

Further Information

If you have any further queries please use the following details:

 

BNRG Renewables Ltd, Custom House Plaza 3, Harbourmaster Place, IFSC,

Dublin 1, Website: www.bnrg.ie, Email: gkavanagh@bnrg.ie, Telephone: +35317917882

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