Memorandum of Understanding for bridging finance for Sustainable Energy Communities in Ireland
About this good practice
As part of the Sustainable Energy Communities Programme in Ireland, Sustainable Energy Communities (SECs) procure consultants to prepare Energy Master Plans (EMP) which provide a roadmap for the SEC towards a more sustainable future. EMP grants of between €10k and €25k are available from the Sustainable Energy Authority of Ireland (SEAI) i.e., Irish state. Previously the SEC had to finance the EMP and then recoup the grant. This prevented many SECs from getting EMP due to lack of finance.
Now there is a Good Practice which is a Memorandum of Understanding (MOU) providing an agreement between the Local Authority and the SEAI. The Local Authority will provide bridging finance to the SEC to prepare the EMP.
Key benefits for the MOU are:
1. Facilitation of community led energy master planning
2. Relationship building between public authorities and communities
The EMP is a process to establish energy use baselines and identify opportunities for improvement. The community use this to select priority projects for investment. All renewable technologies are considered but the most appropriate will be recommended.
One of the biggest hurdles SECs faces are the EMP consultant fees which have to be paid upfront and then reimbursed retrospectively by SEAI. The Memorandum of Understanding allows many more Sustainable Energy Communities produce Energy Master Plans as having the upfront finance is no longer a barrier.
Expert opinion
Resources needed
Grants for Energy Master Plans range from €10k to €25k, assuming three sustainable energy communities want to get Energy Master Plans the local authority will need approximately €8k to €20k available to pre-finance before the grant is paid as 4 milestones can be claimed.
Evidence of success
Donegal County Council has joined other local authorities (LAs) in the Country in approving the MOU process. There are now 18 LAs signed up.
Some of the LAs that have implemented the process include Mayo - 10 SECs supported, Galway – 11 SECs , Sligo – 4 SECs and Roscommon – 3 SECs.
National level MOU figures:
There are currently 65 EMPs supported through the MOU
Active (In-progress): 37, EMP Completed: 24 Evaluation: 4
Total EMP funding processed through the MOU is approx. €505,388
Potential for learning or transfer
One of the biggest hurdles Sustainable Energy Communities (SECs) face are the Energy Master Plan (EMP) consultant fees which must be paid upfront and then reimbursed retrospectively by the Irish state, the Sustainable Energy Authority of Ireland (SEAI).
Having a Memorandum of Understanding (MOU) in place allows the SEC to complete the EMP. This is widely transferrable within Ireland as any Local Authority could enter an MOU with SEAI on behalf of a SEC providing pre-financing to the SEC before the grant is paid.
Outside of Ireland if there were government grants available to SECs for EMP’s, a MOU could be put in place with a financier such as a local authority / municipality to provide costs.
This GP is scalable e.g., can set up multiple MOU’s if funds are available. It is easy to adapt to the territory from the national scope to the local one. It could also be replicated in other situations where a sustainable energy community needs upfront finance.