The planting of up to 1,400ha of miscanthus and willow will be supported by the 2012 Bioenergy Scheme, which was launched last week.
The €1.6m fund enables farmers to apply for grants of up to €1,300/ha to cover 50pc of the cost of establishment.
It had originally been anticipated within the industry that grant aid for just 600ha would be forthcoming this year.
However, the Department confirmed that the area to be supported would be more than double that figure.
Announcing next year's scheme, Minister for Agriculture Simon Coveney predicted a surge in demand for bioenergy crops once the proposed REFIT tariffs were passed by the Cabinet.
"The 2012 scheme will consolidate the progress made since 2007 in developing the energy crops sector in Ireland and has the potential to support 1,400 additional hectares in 2012," Mr Coveney said.
"I have decided to amend the terms and conditions of the scheme so that participants are no longer required to maintain the crop for seven years as a condition of grant aid.
"The removal of this condition should help to make the scheme more attractive to farmers without reducing their commitment to establishing and properly managing the crop once they make the planting investment."
Companies involved in the miscanthus and willow sector welcomed the Department's announcement.
Joe Hogan, of Limerick-based JHM Crops, said the decision to increase the area of grant aided plantings would give the sector a "huge boost".
"This move, and the progress on REFIT, will make a massive difference," Mr Hogan said.
He said JHM Crops had people interested in planting up to 1,000ac of miscanthus next year. However, the final acreage planted would depend on the prospective growers getting finance for planting.
The grant aid package for the planting of willow and miscanthus crops is funded under the Targeted Agriculture Modernisation Scheme, which was re-opened as part of the Budget.
The bioenergy schemes have supported the planting of more than 3,000ha of energy crops since 2007.
The closing date for the submission of applications for pre-planting approval is Wednesday, January 18.
Details of the 2012 Bioenergy Scheme and application forms can be obtained from Biofuels Policy Unit, Department of Agriculture, Portlaoise, Co Laois or at www.agriculture.gov.ie.