Feed-in tariff (Renewable Energy Feed-in Tariff - REFIT)
Updated: 08.01.2019
Author: Georgios Maroulis
In Ireland, electricity from renewable sources was promoted through a feed-in-tariff scheme. As of January 2016, there is no support scheme available for renewable energies, pending the introduction of a new support scheme in 2019.
In the framework of the REFIT schemes, the entities entitled to the feed-in tariff are those suppliers that purchase electricity from renewable sources from generators with whom they have entered into a commercially negotiated REFIT Power Purchase Agreement (PPA). There are three REFIT schemes, establishing guaranteed support prices for various sources of energy, i.e. minimum prices for each category of electricity (5.1 REFIT 1, REFIT 2, and REFIT 3). The original scheme, known as REFIT 1, only had state aid clearance to accept new applications until 31 December 2009. After that date, no new applications have been accepted under REFIT 1, although projects were granted time extension to become operational. In 2012, two newer schemes (REFIT 2 and REFIT 3) received state aid clearance and were open for new applications. REFIT 2 covered onshore wind (small and large scale), hydro (small scale), and biomass landfill gas (4.1 REFIT 2) whereas REFIT 3 covered the biomass categories of anaerobic digestion, biomass CHP, biomass combustion and biomass co-firing (4.1 REFIT 3). Project developers under REFIT 1 were allowed to apply to transfer their projects to REFIT 2 or REFIT 3 if they met the terms and conditions of these schemes. The closing date for applications for REFIT 2 and REFIT 3 was 31 December 2015. A new renewable energy support scheme is expected to be introduced in 2019.
Eligible technologies
REFIT 1, 2 and 3 are closed for new applications. REFIT 2 offered support for onshore wind, small hydro and biomass landfill gas, whereas REFIT 3 offered support for biomass categories including anaerobic digestions, biomass CHP, biomass combustion and biomass co-firing.
Wind energy | Eligible (under REFIT 2). - Onshore wind-power plants (differentiation between plants above and equal to or less than 5 MW) (5.1 REFIT 2).
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Biogas | Eligible (under REFIT 2 and REFIT 3). - Landfill gas is eligible under REFIT 2 (5.1 REFIT 2) and anaerobic digestion is eligible under REFIT 3 (5.1 REFIT 3).
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Hydro-power | Eligible (under REFIT 2). - Plants with a capacity of up to 5 MW (5.1 REFIT 2).
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Biomass | Eligible (under REFIT 3): - Biomass (CHP) (5.1 REFIT 3)
- Biomass Combustion (including co-firing with peat) (5.1 REFIT 3)
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Amount
The amount of payment is based on a reference price (5.1 REFIT 1, REFIT 2, and REFIT 3). According to the table provided in REFIT 2 and REFIT 3, the reference prices for each technology category for 2018 are as follows (prices in €ct per kWh):
Wind energy | |
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Biogas | - Landfill gas: €ct 8.59 per kWh (5.1 and 5.2 REFIT 2)
- Anaerobic Digestion (CHP, up to and including 500 kW): €ct 15.8 per kWh (5.1 and 5.2 REFIT 3)
- Anaerobic Digestion (CHP, exceeding 500 kW): €ct 13.7 per kWh (5.1 and 5.2 REFIT 3)
- Anaerobic Digestion (non-CHP, up to and including 500 kW): €ct 11.6 per kWh (5.1 and 5.2 REFIT 3)
- Anaerobic Digestion (non-CHP, exceeding 500 kW): €ct 10.5 per kWh (5.1 and 5.2 REFIT 3)
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Hydro-power | - Hydro-electric power plants: €ct 8.8 per kWh (5.1 and 5.2 REFIT 2)
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Biomass | - CHP from biomass (up to and including 1.5 MW): €ct 14.7 per kWh (5.1 and 5.2 REFIT 3)
- CHP from biomass (exceeding 1.5 MW): €ct 12.6 per kWh (5.1 and 5.2 REFIT 3)
- Biomass combustion using energy crops: €ct 10.2 per kWh (5.1and 5.2 REFIT 3)
- Biomass combustion for all other biomass: €ct 8.96 per kWh (5.1 and 5.2 REFIT 3)
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Addressees
Entitled party. The persons entitled were the electricity suppliers that have concluded a Power Purchase Agreement (PPA) with an eligible renewable generator. Renewable generators were eligible if they had been accepted by and received a "letter of offer“ (7.3 REFIT 2 and REFIT 3) from the Department of Communications, Energy and Natural Resources (DCENR). In order to receive the letter of offer, the applicant (a developer of new renewable generation) was obliged to provide the following evidence to the Department (7.4 of REFIT2):
- a proof of planning permission for the proposed new renewable generation plant;
- the grid operator's connection offer;
- the indicative date of construction.
In the case of CHP technologies, another requirement had to be fulfilled (7.4 REFIT 3):
- developers must demonstrate that their projects meet the High Efficiency CHP standard under the Directive 2004/08/EC and have been certified by the Commission for Energy Regulation (CER);
Obligated party. The electricity consumer is obliged to pay the REFIT costs through the PSO under the relevant legislation. The CER (Commission for Energy Regulation) calculated and certified the PSO related to the REFIT and is responsible for the ex-ante calculation and ex post correction of amounts payable to suppliers, i.e. the CER provided an estimate which could be adjusted later.
Procedure
Process flow | Until its phase-out on 31 December 2015, new renewable electricity producers had to apply to the Department of Communications to be accepted into the REFIT schemes. Amongst other documents, they had to supply proof of grid access as well as planning permission. Within 60 working days of receipt of a letter of offer, they could enter into a REFIT Power Purchase Agreement (PPA) with a licensed supplier (9.10 REFIT 2 and REFIT 3). |
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Competent authority | The Department of Communications, Energy and Natural Resources administered the REFIT schemes and processed REFIT applications. The energy regulator (CER) was responsible for the calculation and certification of the PSO REFIT payments. |
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Degression
The Department of Communications, Climate Change and Environment annually adjusts the reference prices by the increase, if any, in the consumer price index (5.2 REFIT 1, REFIT 2, and REFIT 3).
Cap
State aid clearance for REFIT 1 was for 400 MW of new renewable generation (4.1 REFIT 1). State aid clearance for REFIT 2 was for 4000 MW of new renewable generation in the onshore wind, biomass landfill gas and small hydro categories (4.1 REFIT 2). REFIT 3 covered 310 MW of certain biomass-related categories, divided as follows: 15 MW of anaerobic digestion (including AD CHP), 170 MW of biomass CHP, and 125 MW of biomass combustion (including biomass co-firing with peat) (4.1 REFIT 3).
Eligibility period
Until its phase-out on 31 December 2015, the eligibility to the REFIT scheme was limited to the following conditions:
- Limited eligibility period. The duration of support was limited and depended on the term of the individual Power Purchase Agreement (PPA); however, the term of the agreement could not exceed a period of 15 years (8.1 REFIT 1, REFIT 2, REFIT 3). The PPA included the purchasing terms, such as the price and the minimum amount of electricity to be purchased. For REFIT 1 the support could not extend beyond 2027 (1.3 REFIT 1 in conjunction with art.7 (4) (a) ERA) and for REFIT 2 and 3 beyond 2032 (art.7 (4) (b) ERA).
- Premature termination. An applicant could withdraw the project from the schemes (REFIT 2 and REFIT 3) and leave the PPA for the open market by giving a notice (12 months prior to the date of the withdrawal) to the Minister of Communications, Energy and Natural Resources and the supplier (8.7 REFIT 2 and REFIT 3).
Distribution of costs
Consumers | The REFIT schemes were funded through the Public Service Obligation (PSO) and charged to all electricity consumers via a surcharge on the electricity bill (6.1 REFIT 2 in conjunction with s. 39 ERA). Thus, the consumers bore the costs of the support system, which were included in the electricity prices. |
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Plant operator | The CER calculated and certified the PSO REFIT payments and was responsible for the ex-ante calculation and ex post correction of amounts payable to suppliers. Anyone in receipt of REFIT payments should be listed in the annual REFIT statutory instrument (6 REFIT 2 and REFIT 3). The payments were sent to the suppliers by the transmission system operator (EirGrid). |
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