Ireland: support for biogas energy — REFIT 3 tariffs from €104 to €157/MWh and RESS auctions

For years Ireland paid fixed REFIT 3 tariffs for electricity from anaerobic digestion, in the range from €104.3 to €156.5/MWh, depending on whether the installation operates in cogeneration and whether it exceeds 500 kW. Today support is based on RESS auctions, in which biogas can compete, but according to data from April 2023 no AD project has yet won.

REFIT 3 tariffs

In a parliamentary reply of 26 March 2013 the minister gave the REFIT 3 rates for anaerobic digestion:

The rates rewarded cogeneration: the difference between AD CHP and AD without CHP in the same capacity class was more than €40/MWh for units up to 500 kW and about €31/MWh above 500 kW. Smaller units were also rewarded, because the unit cost of a small biogas plant is higher.

RESS: competition instead of a tariff

Since 2020 Ireland has supported new renewable energy through RESS (Renewable Electricity Support Scheme): auctions in which a strike price is determined, and winners receive a two-way contract for difference for 15 years. The Commission approved the scheme under number SA.54683, with an estimated budget of EUR 7.2–12.5 billion until 2025. See the report on the Commission's decision.

According to the minister's reply of 27 April 2023, both RESS and the micro-generation scheme (MSS) include anaerobic digestion with high-efficiency cogeneration as an eligible technology, but no AD project has so far made it through the RESS auctions. MSS covers installations up to 50 kW (30 kWe for micro-cogeneration). This shows the difference between the former and the current approach: the REFIT rate was guaranteed to everyone who met the conditions, whereas in RESS a project must win a competition against technologies with lower costs.

Why biogas does not win

Auctions for all technologies reward the lowest cost of energy. Wind and solar have no fuel costs, whereas a biogas plant must buy or produce substrate and operate digesters and a generator set. When an auction has one basket for everyone, a biogas project structurally has a higher bid price. The minister's reply confirms this mechanism: the technology is admitted, but in practice does not pass the selection.

Against the background of other countries in the region

The rates from the minister's reply can be set against support levels in other countries in this series, bearing in mind the difference between a total price and a premium on top of the market price:

Irish tariffs for small cogeneration units were therefore the highest in the comparison, which corresponds to the high unit costs of small farm installations. Details on the other countries are given in the articles on Denmark, Finland and Estonia.

How to read the 2013 values

The rates come from a parliamentary reply of March 2013 and are given in euro per megawatt-hour. The actual revenue of an installation depends on the terms of the contract, such as the duration and any indexation, so before comparing with other systems it is worth checking the contract of the specific installation. For new investors the main point is that REFIT is a historical system, and current support is based on auctions.

Conclusions

• REFIT 3 tariffs for AD ranged from €104 to €157/MWh and clearly rewarded cogeneration and smaller units.
• In RESS biogas competes on price, not for a fixed tariff, so it needs additional justification: the value of heat, grid services, reduction of emissions from slurry.
• For small installations (up to 50 kW) there is a separate MSS track, independent of auctions.