EU officials back Government’s green energy scheme

EU officials have backed Government plans to get families and employers to pay up to €12.5 billion to support new green energy projects.

The Government plans to introduce a scheme that will guarantee prices paid to wind and solar power generators for the electricity that they produce as it bids to cut the Republic’s greenhouse gas emissions.

The European Commission confirmed on Monday that it has approved the scheme as it would contribute to EU environmental goals without distorting competition.

Commission vice-president Margrethe Vestager said the scheme would aid the Republic's move to a low-carbon economy and was in line with State aid rules and the European green deal.

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The new Renewable Energy Support Scheme will have a budget of between €7.2 billion and €12.5 million over five years to 2025, according to the commission. The Department of Communications, Climate Action and Environment confirmed that homes and businesses would pay for this through the public service obligation charged on their electricity bills.

This charge, currently levied at €2.84 a month for homes but likely to increase from October, helps fund renewable power projects.

The new scheme will be based on auctions that favour the cheaper, more efficient, generators.

Unlike the current price-support scheme, there will be scope for cash to be returned to consumers where it is not paid to generators.

The Government also hopes that some renewable generators will not need support as they will be able to agree deals directly with businesses to buy the electricity they produce.

The prospect of the Republic offering billions of euro in price supports prompted energy players including Germany's Innogy and Norwegian group, Statkraft, to pledge to spend up to €6 billion on building wind farms in the Irish Sea.

Offshore and onshore wind generators, along with businesses that produce electricity from solar power, will primarily benefit from the new scheme.

Eamon Ryan, Minister for Communications, Climate Action and Environment, welcomed the commission's decision. "It endorses the Government's commitment to the green deal and launches a renewable energy revolution in Ireland, " he said.

Government greenhouse gas reduction targets include a pledge that the Republic will produce 70 per cent of its electricity needs from renewable generators by 2030. Renewable generators, particularly onshore wind farms, produce close to 40 per cent of electricity used here now.