I am delighted to be one of the 100 invited guests at this year’s Energy Symposium organised by Irish Manufacturing Research and taking place on Friday 1st March. What better place than Ashford Castle to kick off this year’s event.
It’s a great opportunity for Ireland’s leading manufacturing organisations including many RE100 companies to take a day to focus on Sustainable Manufacturing. I’ll be speaking on corporate PPAs and the current barriers that restrict their adoption in Ireland. https://energysymposium.ie/brendan-heneghan/
Can corporate Power Purchase Agreements work in Ireland?
Recently in some European countries, we have seen a move towards companies buying renewable electricity directly from generators in what are termed corporate Power Purchase Agreements (PPAs), but could this happen in Ireland, and if so what barriers need to be overcome to make this happen?
Globally, large multinational companies are actively entering into corporate PPAs to help meet their Environmental, Social and Governance (ESG) goals. Ireland is home to more than 60% of the RE100 companieswhich includes major data centre owners, large multinational pharmaceutical producers, and manufacturing entities with significant electricity usage.
To date in Ireland there have been very few direct corporate PPAs, and unless some commercial and regulatory barriers are addressed this is set to continue. Ireland can have an active corporate PPA market alongside the more traditional supports offered to renewable energy projects. Corporate offtake partners supporting the building of renewable energy projects will directly offset the cost to Irish consumers to meet 2030 renewable energy targets. Corporate PPAs can offer an alternative, or indeed complementary guaranteed revenue stream with the potential to create a mutually beneficial situation for stakeholdersincluding:
projects to meet their CSR objective and ESG goals and make positive contributions to decarbonising Ireland’s electricity generation industry.
Even though wind energy provided over 30% of the electricity generated in Ireland in 2018 there are still many barriers for renewable energy to overcome as we fully decarbonise our energy system. While Ireland has a renewable electricity potential that is the envy of many, globally there are many differences in the commercial arrangements for renewable energy, including the availability of tax incentives or renewable certificates which help explain why Ireland has been left behind in delivering corporate PPAs. In Ireland there is still a commercial gap between what corporates are prepared to pay and what is required by renewable generators to form a viableinvestment. There are a number of policy levers that could address this situation including;
Currently there are also a number of Regulatory barriers that restrict the potential for corporate PPAs in Ireland.
With these simple measures Ireland can have an active corporate PPA market alongside the more traditional supports offered to renewable energy projects, thus allowing corporate electricity users an opportunity to positively contribute to Ireland’s decarbonisation journey.