The Irish government has set a goal of 15 percent renewable electricity directly contracted to corporates by 2030. The latest insight paper from Cornwall Insight Ireland – The dawn of corporate PPAs in Ireland? – assesses whether market conditions are right for continued CPPA growth to be able to meet the ambitious targets laid out by the government.
The key findings of the report are:
The building blocks to create a thriving CPPA market in Ireland exist
Barriers surrounding complexity and price have caused a slow start for CPPA activity
Many developers are awaiting the finalisation of the Renewable Electricity Support Scheme (RESS)
“Ireland possess the fundamental building blocks for a sustained CPPA market to develop” said James Goldsmith, Senior Consultant at Cornwall Insight Ireland. “The presence of environmentally conscious corporate buyers, an active renewable energy development community and relatively few legislative hurdles should make for a significant churn of deals flowing through. The market has been slow off the starting line with any promising activity seen lacking follow through to signed deals. This is no surprise due to the complex nature of these arrangements meaning a lot of time and effort by all parties is needed. However, as more deals are established, a standard format could potentially develop, smoothing out the process and time involved and provide an opportunity for smaller players to get involved”.
Mr Goldsmith added that pricing is key to bringing a CPPA to a close and that it is likely that until the Renewable Electricity Support Scheme (RESS) auction parameters are known, developers will be slow to enter into a CPPA. To do so may leave them frozen out of a potentially more lucrative government-backed contract that carries less risk.
“In the meantime, however, recently developed assets are unlikely to be priced competitively enough to tempt CPPA deals to come through” Goldsmith said. “It is much more likely that existing assets coming out of Renewable Energy Feed-in Tariff (REFIT) subsidy arrangements, could agree a CPPA deal with a view to re-powering further down the line.”
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