New Renewables-Based Electricity Generating Capacity to be Installed - AER VI

Six Alternative Energy Requirement (AER) competitions were held between 1995 and 2003. Under the AER scheme, winning bidders are entitled to a 15-year power purchase agreement whereby the ESB buys the electricity output of the winning facility at the bid price. The additional cost of electricity procured under the AER schemes is spread across all electricity consumers. The prices paid by the ESB are increased annually in line with the Consumer Price Index. For each competition a quota is set for the amount of electricity to be sourced from each technology, e.g., wind, hydro, biomass/waste. In AER I, the unit price was fixed and applicants were entitled to bid for capital grants. In subsequent competitions, a price cap for each renewable technology was set instead of a fixed price. Winning bidders in AER III were also entitled to apply for a capital grant under the ERDF Economic Infrastructure Operational Programme 1994-1999. Under AER V, the securing of planning permission as a precondition for entering the competition was introduced. Under AER VI (2003-2005), front weighting of the bid price was provided for, allowing a price increase of 35% for the first 7.5 years of the contract followed by an associated decrease of 35% for the remaining 7.5 years. AER VI aims to ensure that the 500 MW target for renewables based electricity-generating capacity is reached by 2005. (www.dcmnr.gov.ie/energy)

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