Renewables development in Northern Ireland receives a boost

Energy Minister Arlene Foster has announced new legislation to strengthen Northern Ireland’s effectiveness in increasing renewables development.

From 1 April 2009, a system of ‘banding’ to the Northern Ireland Renewables Obligation (NIRO) has been introduced. This means that the level of support available for electricity generated from renewable sources will vary depending on the energy source and the technology used; in particular it will increase the support available for offshore developments, certain non-wind technologies and for micro-generation.

Since its introduction in 2005, the NIRO has provided the same level of support for all renewables generation. This support is in the form of tradeable Renewables Obligation Certificates (NIROCs) which green generators are awarded for each megawatt-hour (1,000 kilowatt-hours or units) of electricity generated. These NIROCs are then sold to electricity suppliers who need them to meet their obligations under the NIRO; currently NIROCs trade at prices between £40 and £50 depending on availability.

The new banding arrangements change the number of NIROCs that generators will get for their output. For example, offshore wind developments will now receive one and a half NIROCs for each megawatt-hour (MWh) while support for wave and tidal generation projects will effectively be doubled from 1 April when they will receive two NIROCs - the highest support level available. Onshore wind, which is Northern Ireland’s main source of renewable electricity, will continue to receive one NIRO for each MWh.

Commenting on the new arrangements, Energy Minister Arlene Foster said: “The changes to the NIRO will strengthen its effectiveness in increasing Northern Ireland’s renewables development.

“Since its introduction in 2005, support under the NIRO has allowed Northern Ireland to double its renewables generation to the extent that it now represents 7% of our total consumption and we are confident that we can meet our 12% target for 2012. However, we need to continue our efforts to reduce Northern Ireland’s over-dependence on imported fossil fuels; in particular, we must seek to incentivise offshore generation and those less developed non-wind technologies. That is what the banded NIRO is designed to do.”

The changes represent particularly good news for domestic installations: under the new arrangements, all micro-generation (ie installations with capacity of 50kW or less) will be eligible for the maximum two NIROC band regardless of the technology involved. This means that domestic wind turbines, unlike large scale wind projects, will receive double NIROCs. Furthermore, unlike large scale installations, the higher level will apply to all existing generators as well as new installations.

Notes to Editors:

1. The Northern Ireland Renewables Obligation (NIRO) is DETI’s main policy measure for supporting the development of renewable electricity in Northern Ireland. The NIRO was introduced on 1 April 2005 and places a legal requirement on electricity suppliers to account for a specified and increasing proportion of their electricity as having been supplied from renewable sources or to pay a buy-out fee that is proportionate to any shortfall in meeting that obligation. Suppliers provide evidence of compliance by presenting Renewables Obligation Certificates (NIROCs) which are issued to generators of renewable electricity; up until 1 April 2009 generators received 1 NIROC for each megawatt-hour (MWh) of eligible output.
2. The NIRO operates in tandem with two similar Obligations in Great Britain – the ‘RO’ in England & Wales and the ‘ROS’ in Scotland. ROCs issued in Northern Ireland under the NIRO (NIROCs) are tradeable with those issued under the two GB Obligations (GBROCs) in a UK-wide market for ROCs; both NIROCs and GBROCs are accepted as the necessary evidence under each of the obligations.
3. ROCs (both NIROCs and GBROCs) are issued by OFGEM, which, in the case of NIROCs, is acting on behalf of the Northern Ireland Authority for Utility Regulation (NIAUR).
4. For media enquiries please contact the DETI Press Office, telephone 028 9052 9297. Out of office hours, please contact the Duty Press Officer via pager number 07699 715 440 and your call will be returned.