Policy Support Mechanisms

POLICY SUPPORT MECHANISMS

Renewable Energy Feed-In Tariff
On May 1st 2006, the Minister for Communications, Marine and Natural Resources announced the official launch of the renewable energy feed in tariff (REFIT) scheme. The programme provides support to renewable energy projects over a fifteen year period. The new support mechanism is a change from the previous programme in that it is a fixed feed in tariff mechanism rather than a competitive tendering process. Applicants in REFIT must have planning permission and a grid connection offer for their projects and they will then be able to contract with any licensed electricity supplier up to the notified fixed prices.

The fixed price tariffs are:
Large wind energy (over 5 Megawatts) -> 5.7 cent per Kilowatt hour
Small wind energy (under 5 Megawatts) -> 5.9 cent per Kilowatt hour
Biomass (landfill gas) -> 7.0 cent per Kilowatt hour
Hydro and other biomass technologies -> 7.2 cent per Kilowatt hour.

REFIT Terms and Conditions

Biofuels Excise Relief
In Budget 2006, a five-year biofuels excise relief package was announced, aimed at placing 163 million litres of biofuels on the Irish market by 2008.  The scheme follows a pilot initiative which was rolled out in 2005.  The pilot programme aimed to kick-start the biofuels market in Ireland and result in 16 million litres of biofuels being placed on the Irish market.

The new scheme will provide excise relief on selected biofuel projects in four specific biofuel categories. These categories include:

• Biodiesel made from pure plant oil, used cooking oil and tallow, blended with fossil diesel to a maximum of 5% and sold at regular diesel pumps;

• Biodiesel in higher blends of up to 100% in specific fleets of vehicles whose engine warranties cover these blends;

• Bioethanol made from wheat, barley, whey and other feedstocks, blended with petrol to a maximum of 5% and sold at regular petrol pumps or blended up to 85% and used in flexible fuel vehicles (FFV’s);

• Pure Plant oil, which is made from crops such as oil seed rape and used in modified diesel engines as a pure 100% biofuel.

Liquid Biofuels Strategy Study for Ireland

Biofuels Obligation
On February 12th 2007, the Minister for Communications, Marine and Natural Resources announced his intention to introduce a biofuels obligation which will ensure that biofuels represent 5.75% of Ireland's transport fuel market by 2009. The obligation will allow Ireland to achieve the EU Biofuels Directive target a year in advance of the 2010 deadline.
The Minister further announced a new 2020 target of 10% market penetration of biofuels which would also be delivered by the Biofuels Obligation.

Policy Incentive Options for Liquid Biofuels Development in Ireland


Other Biofuels Supports

Finance Act 2005 allows for a 50% VRT reduction on flexible fuel vehicles which can achieve blends of bioethanol with petrol of up to 85%. This relief is in place until 31 December 2007.

The Department of Transport is also running a pilot programme offering 75% grant aid for hauliers converting their vehicles to run on pure plant oil. The Department have appointed the German Irish Chamber of Industry and Commerce to administer the programme.

Further details on the programme are available on the Biofuels for Transport website.

http://www.biofuelsfortransport.ie/temp/index.asp

Renewable Heat Deployment Programme
In Budget 2006, the Minister of Finance announced the allocation of €65 million over the period 2006 to 2010 to launch several innovative grant schemes. From this, an indicative allocation of €22M was made for a Bioheat Boiler Deployment Programme to run in the 2006 to 2010 time frame. In Budget 2007, the Minister of Finance announced the allocation of an additional €4 million to expand the Bioheat Boiler Deployment Programme to include Solar Thermal Systems and Heat Pumps.

Launched in March 2007, the Renewable Heat (ReHeat) Deployment Programme provides assistance for the deployment of renewable heating systems in industrial, commercial, public and community premises in Ireland. The programme is administered by SEI and is an expansion of the previous Bioheat Boiler Deployment Programme which supported woodchip or pellet boilers only.

Further details are available on SEI website. 

http://www.sei.ie/index.asp?docID=1003

Bio-Energy Establishment Scheme
This scheme provides establishment grants to farmers interested in planting willow and miscanthus for bioenergy (heat and electricity) purposes. Production of these crops is relatively underdeveloped in Ireland mainly due to high establishment costs. The introduction of the scheme is for a limited period and still requires EU state aid approval. The Department of Agriculture are administering the scheme with €2m being provided in 2007 and a further €2.5m and €3.5m being provided in 2008 and 2009 respectively.

The Department of Agriculture are also introducing a new €6 million bioenergy scheme to top-up the EU energy crop premium. Under this scheme farmers will receive an additional €80 per hectare on top of the existing €45 premium.

Further details are available on the Department of Agriculture website.

http://www.agriculture.gov.ie/index.jsp?file=schemes/bioenergy/bioenergy.xml

Greener Homes Scheme
The Greener Homes Scheme was allocated €27m in the Budget 2006 package figure.  Budget 2007 provided for an additional increase of €5m in 2007 and provision for additional spending of €7m in 2008 and €8m in 2009.

The scheme provides grant assistance to homeowners who intend to purchase a new renewable energy heating system for either new or existing homes. The scheme is administered by SEI and aims to increase the use of renewable energy and sustainable energy technologies in Irish homes.

Further details are available on the SEI website. 

http://www.sei.ie/greenerhomes

Combined Heat and Power Scheme
In the 2006 Budget, an indicative allocation of €11M was made for a CHP programme to run in the 2006 to 2010 time frame. The new SEI CHP Deployment Programme will provide grant support to assist the deployment of small-scale (<1MWe) fossil fired CHP and biomass (anaerobic digestion (AD) and wood residue) CHP systems. It supersedes the “Combined Heat and Power RD&D” Programme.

At present the Programme includes feasibility studies, to assist investigation into the application of CHP across all size ranges and technologies and investment grant support for small-scale fossil fired CHP with a capacity ≥ 50kWe and < 1MWe. The Programme will ultimately include biomass CHP and anaerobic digestion CHP systems and micro CHP, and these remaining technologies will be launched through specific calls.

Further details are available on the SEI website. 

http://www.sei.ie/chpgrants

Corporate Tax Relief for Investment in Renewable Energy Generation
Section 486 Corporate Tax Relief came into effect in 1999. Corporate equity investments in certain renewable energy projects are eligible for tax relief in the form of deduction from company’s profits for an investment in new ordinary shares in a qualifying company. Relief is capped at 50% of all capital investments (excluding land), net of grants, on a single project.

Budget 2007 announced that the qualifying period for the scheme of tax relief for corporate investment in certain renewable energy projects was being extended from 31 December 2006 to 31 December 2011. The extension is still subject to state aid clearance by the European Commission.


Business Expansion Scheme
Business Expansion Tax Relief was introduced as an incentive to private investors to invest long-term equity capital in companies (particularly new and smaller ones) where it would be otherwise difficult to raise funding. Investments in renewable energy qualify for BES relief. Individual investors holding a BES equity investment for a minimum period of five years can benefit from tax relief, at their marginal rate, in respect of investments of up to € 31,750 per year. The aggregate that a company can raise was increased under the Finance Act 2004 from €750,000 to €1,000,000.

Budget 2007 announced that the scheme was being renewed from 1 January 2007 for a seven year period to 31 December 2013. It is proposed that the BES company limit be increased from its current level of €1million to €2million, subject to a maximum of €1.5 million to be raised in a twelve month period. It is also proposed that the investor limit be increased from its current level of €31,750 to €150,000. The new investor and company limits for BES will apply as respects the tax year 2007 and subsequent years, once the relevant provisions of the Finance Act have come into operation and approval from the European Commission has been received.


Renewable Energy RD&D Programme
In August 2002, SEI launched the Renewable Energy RD&D programme. The focus of the programme is to stimulate the application and further deployment of renewable energy technologies, particularly those close to market viability.

The programme was allocated an indicative budget of €16 million. It gives priority to supporting:

• Research aimed at developing policy options for enhanced deployment;
• Research to define the market structure for renewable energy technologies with high penetration potential;
• Research aimed at cost reduction, improved reliability and /or opening new markets;
• Demonstration of non-technical innovation;
• Feasibility studies for renewable energy projects;
• Demonstration aimed at high risk, high reward projects;
• Investigation into core areas, common to many renewable technologies, such as the electricity system, regulation, technical standards, fiscal and support measures, finance, markets, planning and policy.

Further details are available on the SEI website
http://www.sei.ie/index.asp?locID=317&docID=-1
 
Renewable Energy Research, Development & Demonstration – Programme Overview

Charles Parsons Energy Research Awards
The Minister for Communications, Marine and Natural Resources announced the establishment of the awards in 2006. The Awards are designed to develop and stimulate overall energy research capacity, particularly in certain priority areas.

It provides funding for research groups active in energy research and research training. In particular:

• Full time Researchers;
• PhD studentships for engineering graduates;
• Summer student placements.


Further details are available on the DCMNR website.

http://www.dcmnr.gov.ie/Energy/Guide+for+Applicants.htm

EU Programmes
SEI is the National Delegate and National Contact Point (NCP) for the Research and Technological Development (RTD) 7th Framework Programme and the NCP for Intelligent Energy Europe Programme. These programmes provide funding for energy related research and projects.

Further details on both programmes are available on the DG Research website.

http://ec.europa.eu/research/

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