Key Contacts: Niall Donnelly – Partner | Alice Whittaker – Partner | Alison Hardiman – Consultant | John O’Donoghue – Partner | Angelyn Rowan – Partner | Kerri Crossen – Partner | Eoghan Doyle – Partner | Simon O’Neill – Partner | Max Bail – Senior Associate |
The Initial Decision and Consultation Response confirms that Article 26 of the Net Zero Industry Act will be fully integrated into the Renewable Electricity Support Scheme from RESS 6 onwards, and marks a significant shift in how non-price factors will influence Irish renewable electricity auctions. While price remains the primary driver of allocation, developers will now need to engage in a more complex scoring environment that rewards resilient supply chains and energy system integration, and that will evolve further through the forthcoming RESS 6 consultation. We consider some of the key decisions in our latest briefing.
Timing
The Department of Climate Energy and the Environment (“DCEE”) has confirmed that the NZIA regime will apply to 100% of capacity auctioned from RESS 6, and has rejected a phased or partial approach despite stakeholder concerns about supply chain readiness. Article 26 will therefore be embedded as a feature of all future RESS auctions, with further refinements to be consulted on in the RESS 6 process but no transitional relief in terms of volume covered.
Pre-qualification and compliance
Pre-qualification will remain anchored in three existing criteria, responsible business conduct, cybersecurity and data security and ability to deliver, with no new gateway requirements added under NZIA at this stage. DCEE is therefore signalling continuity with the RESS 5 framework in areas such as planning permission, grid connection offers and security.
For responsible business conduct, DCEE will require self-declaration at auction coupled with reliance on the Corporate Sustainability Due Diligence Directive reporting framework for entities within scope of the relevant accounting Directive, and a single widely used corporate responsibility standard for entities outside that regime, with the stated aim of minimising administrative burden while preserving robust due diligence. For cybersecurity, bidders will also self-declare at auction, with NIS2 certification for the energy sector to be accepted as preferred evidence once available, and other recognised standards potentially acceptable in the interim.
DCEE confirms that ability to deliver requirements, including planning consent, grid offer and security instruments, will remain aligned with RESS 5, and that no new NZIA specific delivery tests will be introduced at pre-qualification. On Article 5 of the Implementing Regulation, DCEE clarifies that the United Kingdom is not treated as a high risk third country for the purposes of data transfer, and confirms that restrictions linked to Article 5(b) will be applied only where applicants or key suppliers are located in or subject to such high risk jurisdictions.
Award criteria, weighting and scoring
Two non-price award criteria will be used, resilience and energy system integration, both operating on an additive scoring basis within the 30% maximum weighting allowed for non-price factors under NZIA. Resilience will not be used as a pre-qualification hurdle but as an award criterion, on the basis that positive incentives are more likely to encourage gradual diversification of supply chains without excluding otherwise viable projects or creating short term feasibility issues.
Stakeholders expressed a preference for higher price weightings and a more limited role for energy system integration, and DCEE has decided that only two weighting options (options 4 and 5) will be developed further, both using multiple technology specific pots and retaining a price weighting between 70% and 85%, resilience at 5% and energy system integration between 10% and 25%. The final split between price and energy system integration will be fixed in advance of the next auction, taking account of developments in hybrid and storage technologies.
The price scoring methodology will continue to use a linear approach but will be redesigned so that all scores are determined solely by parameters published before the auction, with explicit references to the lowest bid or other ex post variables removed, in order to avoid distortions from outliers and to enhance predictability. A revised price formula will be brought forward in the detailed auction documentation for RESS 6.
Resilience and energy system integration design
DCEE will assess all eight components on the European Commission list of main specific components for each technology when awarding resilience points, rather than limiting the assessment to components currently characterised as high risk for dependency. This is intended to provide a stable and forward looking framework and to reflect mandatory conditions in the Implementing Regulation, while allowing early movers who diversify wider elements of their supply chain to be rewarded.
A strict 100% threshold will apply for each component when scoring resilience, meaning that to obtain points for a given component all products of that type used in the project must be sourced from entities other than those in the Commission list of third country dependencies, and any mixed sourcing between European and listed third country suppliers will result in zero score for that component. Compliance will be based on self-declaration at auction and documentary evidence at delivery, with DCEE to publish a non-exhaustive list of acceptable documentation and to use the Accelerating Renewable Electricity Taskforce to refine evidentiary expectations over time.
The energy system integration criterion will be updated to place greater emphasis on storage configurations and duration, with a focus on rewarding projects that provide longer duration flexibility and more material system benefits. Locational aspects and explicit recognition of grid forming inverters or other system services will not be incorporated at this stage, due to concerns about complexity, overlap with grid connection and system services markets, and the risk that static locational signals could quickly become misaligned with evolving network conditions.
Technology pots, evaluation factor and force majeure
DCEE has decided to move to multiple technology specific pots for future RESS auctions, which is intended to allow technology specific NZIA criteria to be applied more consistently, to avoid a single technology dominating outcomes and to remove the need for an evaluation correction factor. A budget will not be published in advance and existing auction parameters will be retained per pot, with more detailed rules on pot interaction and reallocation to be explored in the RESS 6 consultation.
As a consequence of adopting multiple pots, the evaluation correction factor will be removed, reflecting both practical difficulties in setting an objective value ex ante and the requirement under NZIA that non price factors operate additively rather than through a multiplicative mechanism. DCEE considers that removing the evaluation correction factor will simplify evaluation, increase transparency for bidders and ensure that non-price criteria are reflected through clearly measurable scoring.
Force majeure provisions will be extended to cover non-compliance with non-price commitments, including resilience and energy system integration, but access to this relief will be tightly constrained to exceptional circumstances wholly outside the applicant’s control and supported by robust evidence. DCEE stresses that force majeure will not be available as a general mechanism to unwind auction commitments and will mirror the strict structure used for existing RESS force majeure clauses.
Issues flagged for RESS 6 consultation
Several key design questions are explicitly deferred to the forthcoming RESS 6 consultation, including the number and scope of technology pots, with a stated provisional position to limit eligibility to onshore wind and solar photovoltaic on the basis of market maturity and the technology specific nature of NZIA criteria. DCEE also intends to consult on rules governing competition ratios and the potential for reallocation between pots where bid volumes are unbalanced, in order to protect competitive tension and support efficient capacity allocation.
DCEE will also revisit the interaction between energy system integration and Unrealised Available Energy Compensation, noting that high dispatch down levels for some projects may be better addressed through incentivising storage rather than strengthening UAEC, and that there is a risk of conflicting signals if both are used simultaneously without adjustment. In addition, further evidence will be sought on whether projects of 10 MW or less should be removed from RESS altogether and supported through a separate scheme that takes advantage of the NZIA exemption for small installations, including analysis of whether compliance costs and supply chain structures differ materially by project size.
Conclusion
Taken together, these initial decisions confirm that future RESS rounds will be more structurally complex but still grounded in a familiar price based auction framework, with non-price criteria shaping outcomes at the margin rather than replacing competition on strike price. Developers will need to prepare for more intensive supply chain diligence, enhanced documentation on resilience and energy system integration, and a move to technology specific pots, while monitoring the RESS 6 consultation closely for further changes on pot design, UAEC and the treatment of smaller projects.
