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The Future of Northern Ireland Renewables Support
20th October 2015
A rapid decision on the future of renewables support in Northern Ireland (NI) is needed to deliver continued investment and the resulting economic benefits. As energy policy is devolved to NI, key decisions on future renewables support will be made by the NI Government.
The NI Executive indicated in the ‘Call for Evidence on the implementation of the Contract for Difference (CfD) scheme in Northern Ireland’ that it has not made a final decision on the support scheme:
“the Minister for Enterprise, Trade and Investment, in conjunction with her NI Executive colleagues, will review the earlier decision on whether the CfD scheme should be implemented in NI in light of the responses to this call for evidence and further stakeholder engagement.”
On 30 September 2015, the Department of Enterprise, Trade and Investment (DETI) issued a consultation paper on the early closure of the NI Renewables Obligation (NIRO) subsidy scheme for onshore wind. After a short consultation period, of two weeks, it is proposed that NI align with the Department of Energy & Climate Change (DECC) policy of closure of the Renewables Obligation (RO) to onshore wind on 1 April 2016, with grace periods for projects which meet certain criteria. The Minister for Enterprise, Trade and Investment has indicated that a key driver of this proposal is that, after April 2016, the cost of any new projects supported by NIRO would be borne solely by the relatively small number of NI energy consumers rather than by all consumers across the UK.
In making a decision on the future of renewables support in NI, it is important to take a broad view including:
Impact on renewables deployment:
Jobs, taxes and other economic benefits;
Cost of electricity and particularly on the major issue of fuel poverty; and
NI’s “CfD balance of payments”, subsidy payments to local projects less payments by NI consumers to fund the CfD.
To support this debate, this paper provides an overview of the current position on renewables support in NI, a summary of the CfD and an assessment of the economic implications of three different ways forward:
Full participation in the Great Britain (GB) CfD;
A NI specific variant of the CfD; and
An All Island renewables support scheme.
We conclude that a CfD variant specifically designed around the situation in NI will deliver the greatest net benefit to NI.
To read our thought leadership paper on the support for Northern Ireland renewables please fill out the form below.
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