With a lot of uncertainty around the impacts of COVID-19 on global supply chains and renewable project delivery we are starting to see the effects in the Irish Energy market, notably the announcement that prequalification for the Renewable Energy Support Scheme in Ireland will be extended.
In December 2019, the Department of Communications, Climate Action and Environment (DCCAE) detailed further information regarding the RESS timelines, and Minister Bruton confirmed that the government had approved the design of RESS-1. The auction was originally planned to commence in June 2020 and would see the first projects eligible for support in 2021 and become fully operational in 2022.
However, when COVID-19 was first identified in China, it caused an economic slowdown leading to a significant fall in demand. This led to fears of over-supply for fuel and oil products and a reduction in prices. As the economic impacts of COVID-19 are spreading globally, oil prices are falling rapidly. This has reverberated into the carbon market, with the price of EUA’s falling more than 30% to a 16-month low of just over €15/tCO2e. The energy industry is likely to continue to feel the effects of this drop in oil and gas prices and the ongoing impact of COVID-19 for a prolonged recovery period.