The Government is to attempt to more than double the amount of renewable energy supplied to the national grid over the next four years, Minister for Energy Noel Dempsey announced yesterday.
In response to increasing oil prices, concern over oil supplies and the proliferation of greenhouse gases, Mr Dempsey is to increase the share of electricity generated from renewable sources from the current level of 5.2 per cent to 13.2 per cent, by 2010.
The ambitious target will provide enough renewable energy to meet the needs of about 260,000 households and will prevent the emission of more than one million tonnes of greenhouse gases annually.
Renewable energy generators are to be offered contracts for 15 years, and between them will be required to generate at least 400 megawatts of electricity each year.
This will redirect about €75 million a year away from spending on imported fuel (and about €1 billion over the 15-year life of the contracts).
Mr Dempsey said the move would also create 300 new jobs in generation and maintenance, and 1,100 jobs in the construction of the plants.
The extra 400 megawatts of electricity generated will bring the total amount derived from renewable sources (such as wind farms) in the Republic to about 1,450 megawatts each year.
There is, however, a strong possibility that, as the State's consumption of electricity expands, more than 400 megawatts annually will be required from renewable sources to maintain percentage levels.
To be known as the Renewable Energy Feed In Tariff (Refit) programme, the scheme will see investment of about €440 million by alternative energy developers.
It will also cost consumers a total of €120 million in price supports over the lifetime of the 15-year programme. The support is paid by consumers through the public service levy on electricity bills.
According to Mr Dempsey, Refit is capable of reducing dependency on imported oil by more than 2.5 million barrels a year.
Most of the new energy will come from wind projects. However, the programme is also available to biomass-powered projects, small-scale hydro projects and projects capturing harmful landfill gas emissions.
"This new programme is a major step by the Government towards delivering Ireland's commitments under the Kyoto agreement," said Mr Dempsey.
"It is now a matter for project developers to seize the opportunity and deliver projects quickly," he continued.
Mr Dempsey said the Government will be considering targets for the post-2010 period in the context of the Green Paper on energy which he will be publishing this summer.
Under previous support programmes for supplies of alternative energy, developers were asked to bid prices at which they were willing to sell electricity to the ESB for 15 years. The lowest-priced bids, up to capacity limits announced in the competition notes, received contracts with the ESB.
The contracts obliged the ESB to purchase the electricity produced for 15 years at the prices bid. The ESB was compensated for the net additional costs it incurred from a public service levy funded by electricity consumers
This time, however, project developers are to be free to negotiate with any electricity suppliers in the liberalised electricity market. The purchase price is negotiated between the generator and supplier directly.
Contracting suppliers will be compensated for additional costs with money raised by the public service levy funded by electricity consumers.
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