Budget 2024 – what are the main asks for renewables?

With the budget for 2024 less than a week away and negotiations on the package set to go down to the wire, various lobby organisations are using every last minute to convey their key budget requirements for the year ahead.

Despite the momentum towards renewable energy development being the fastest it’s ever been, there are still many measures, ranging from simple and cost-effective to complex and expensive, that need to be taken in order to encourage more developments.

This week, we will run through the key budget requests for 2024 from various organisations ahead of the big day.

IFA

The Irish Farmers Association (IFA) focused heavily on encouraging microgeneration of electricity, which was very similar to last year’s asks. It called for farmers who receive grant aid to support the installation of renewable energy systems to be allowed to sell any surplus electricity in full.

It also called for the removal of planning impediments for microgeneration projects and the establishment of new capital grants of approximately 50% for farmers to invest in microgeneration.

The IFA says this will require a new financial support programme for on-farm microgeneration with a separate structure and set of rules.

This money should come from outside of CAP Pillar II funds, it says. The IFA wants to see the delivery of a meaningful “Feed in Tariff” with no limits on export volume to the grid and a redefining of the meaning of “communities” in the Renewable Electricity Support Scheme (RESS) to include virtual farming communities and partners. Interestingly, it called for the removal or reducing of network charges for inter-farming community trading, which currently does not exist.

However, it was very weak on anaerobic digestion (AD), which could represent the split within the IFA on the technology as some view it as a nitrates solution and diversification option, while others see it as a threat.

In its 2024 submission, it called for the scale-up of renewable energy on smaller-scaled farms with technologies such as AD but provided no detail on this. This is a stark climbdown from its strong 2023 budget submission where it called for the establishment of a new “anaerobic digestion support scheme”, financed by the Department of Environment, Climate & Communications and independent of TAMS.

IrBEA

The Irish Bioenergy Association (IrBEA) pre-budget submission calls for the introduction of a number of key measures and supports to drive the development of the biomass, biomethane and biofuels sector.

IrBEA is calling for a dedicated fund to drive the development of the sector and Government’s biomethane target of 5.7TWh, which needs to be part of the soon-to-be-launched biomethane strategy.

This budget is an opportunity to provide the financial and market certainty required to kickstart the sector and allow those who have plans to develop AD plants to mobilise their projects, the submission states.

In addition, IrBEA calls for the finance act to give equal revenue tax treatment to large-scale biomass chipping equipment compared to other similar large plant and equipment, such as concrete pumps.

It also wants this budget to provide additional resourcing to statutory planning agencies so that it can have the capacity to deal with and assess planning applications for renewable projects, such as AD plants, in an efficient and timely manner.

There are still many measures that need to be taken in order to encourage more developments

IrBEA members support an increase in carbon tax provided that fuel poverty measures are enhanced and that the funds generated from increases in carbon taxes be ringfenced to support the development of bioenergy and other renewable energy projects.

ICMSA

The Irish Creamery Milk Suppliers Association (ICMSA) has also called for funding for AD and co-operatives to invest in AD.

It has also demanded a reduced VAT rate on renewable products and services, and for an energy assessment grant to be made available for farmer sole traders.

Irish Solar Energy Association

Among the key asks from the Irish Solar Energy Association is for the Government to review the conditions of access to Capital Acquisitions Tax agricultural relief and Capital Gains Tax retirement relief, which act as barriers to solar development.

The group has called for the removal of the 50% restriction on solar PV land coverage. It also wants to see the broadening of the “active farmer” and “agricultural property” definition to support agri-solar farming/land leasing for agri-solar purposes. This would increase the volumes of local land available for solar farms.

Wind Energy Ireland

Wind Energy Ireland is calling for more resources for planning. While it recognises the additional recruitment in An Bord Pleanála and funding for the National Parks & Wildlife Service (NPWS) in recent budgets, the group says it is still well short of what is needed. It has called on an increased investment in skills development to build the workforce the Irish renewable energy industry needs.

It also called for an increase in the R&D tax credit rate to 50% for R&D carried out on green technologies, which currently stands at 25% for qualifying initiatives.

KPMG

KPMG wants the Government to introduce measures to incentivise sustainable aviation fuel (SAF) manufacturing in Ireland, mobilise private finance for green investment, incentivise the development and use of green technology, support green agriculture, promote sustainable building and accelerate the transition to sustainable transport.

Among the specific measures called for, it wants to see the increase of the R&D tax credit rate to 50% for R&D carried out on green technologies.

In terms of agriculture, it called for enhancing CGT retirement relief to ensure that relief remains available in circumstances where a farmer makes their land available to deliver renewable energy through solar, wind or AD, or re-wilds their land, increases wetlands or plants native trees.

It also wants to see the removal of the 50% land restriction on CAT agricultural relief.

Micro-Renewable Energy Federation

The Micro-Renewable Energy Federation wants the main pillar banks, credit unions and other financial institutions to be mandated to provide loans at interest rates of below 5% for renewable energy investments by all stakeholders.

It also wants the Government to provide a new €250/kWh grant support to encourage businesses and homes to utilise battery storage.

The group has also called on the Government to ensure that structures are put in place to allow microgenerators to buy from one electricity supplier and sell surplus power generated to a different electricity supplier.

It has also called on a special grid application process to be put in place for small-scale renewable energy applications of up to 6MW and investment to ensure that everyone who wants to connect to the grid and export surplus generation can do so and get connected within two months.

Engineers Ireland

Engineers Ireland has called for consideration to be given to the use of hybrid grid connections. These connections allow the synergy of conventional energy generation and new renewable energy such as from wind, green hydrogen or solar farms.

It also wants the Government to support the provision of a liquified natural gas and regasification units as part of the near to medium-term solution to providing energy security for Ireland to prevent possible future disruptions to gas supply.

IBEC

IBEC has called for an additional €450m in a fund to drive zero carbon investment in industry by scaling up and expanding industry supports to 2026.

It also wants to see the accelerated capital allowance for energy-efficient equipment, which is due to end in 2023, maintained to ensure the uptake of low-carbon technologies.

It says that capital allowances should be increased to a super deduction of 130% of capital outlay, including other costs such as retrofitting – to bring forward investment in our low carbon future.

It also wants the full rollout of microgeneration and to classify hydrotreated vegetable oil (HVO) classed as a renewable fuel and extend the diesel rebate scheme to HVO.

Environmental Pillar

The Environmental Pillar wants to see the creation of a Climate and Nature Restoration fund of €8bn from the projected budget surplus over the next four years to finance future climate and nature infrastructural and capital investments (eg renewable energy), including nature-based solutions.