Proposed changes to the Northern Ireland renewables obligation

Enterprise Minister Arlene Foster published her response to the Statutory Consultation on the Northern Ireland Renewables Obligation 2010 today.

The consultation sought views on proposals to change the NI Renewables Obligations, (NIRO) 2010 and increase support for some small-scale generators.

The Minister said: "The Northern Ireland Renewables Obligation is the main support mechanism for incentivising renewable electricity generation. It has been very successful in enabling Northern Ireland to achieve almost 10% renewable electricity generation and will be essential if we are to meet our proposed 40% target by 2020."

The proposals will take effect from 1 April 2010 and make a number of administrative changes to improve the operation of the NIRO. The changes will include increased support to landfill gas in Northern Ireland and allow for greater assistance for some categories of small-scale generation, broadly in line with some elements of the Great Britain Feed-in tariff.

Arlene Foster continued: "There was a very positive response to the proposed changes in the consultation document. However, respondents were clear that they wanted a small-scale feed-in tariff in Northern Ireland. While Northern Ireland does not have the necessary legislative powers to introduce a small-scale Feed-In Tariff in Northern Ireland at present, I am confident that the proposed increase in Renewable Obligation Certificates, (ROCs) will help support new small-scale generation here.”

The Minister added: "My Department is in the process of commissioning detailed work to make an assessment of the cost of introducing a small-scale Feed-In Tariff, similar to that in GB. However, the cost to the consumer will be the key determining factor in a decision on this issue."

Commenting on the fact that the proposed enhanced ROCs will only apply to new entrants accredited from 1 April 2010, the Minister said: "I am aware that a small number of existing generators will not benefit from the proposal for enhanced ROCs. They will, however, continue to get the same support under the NIRO as they do currently and their position is consistent with similar projects elsewhere in GB. I am however willing to consider any forthcoming evidence which demonstrates that this decision will impact negatively on existing generators.”

The Minister concluded by referring to the Department of the Environment’s new planning policy for renewable energy, PPS18. "The Planning Policy Statement (PPS)18 will assist the overall growth of the renewable sector in Northern Ireland. PPS18 aims to facilitate the siting of renewable energy generating facilities in appropriate locations within the built and natural environment. This will help us to achieve the challenging targets for renewable energy as set out in the Strategic Energy Framework and to realise the benefits of renewable energy.”

Notes to editors:

1. The Northern Ireland Renewables Obligation (NIRO) is the main support mechanism for increasing the level of electricity consumption that is generated from renewable energy sources. The NIRO places an obligation on electricity suppliers to account each year for a specified and increasing amount of their sales as having been from renewable sources or to pay a buy-out fee that is proportionate to any shortfall. Suppliers comply with the NIRO by presenting Renewables Obligation Certificates (ROCs) which are issued to renewable generators according to the level of output. The NIRO operates in tandem with similar Obligations in GB and there is a UK-wide market for the ROCs which currently trade at around £45 each and hence provide financial support to the generators.

2. The changes to the NIRO proposed for implementation by 1 April 2010 will include:

• removing the present 20% cap on the NIRO;
• moving to 10% headroom from 2011;
• introducing a 20 year limit on support;
• extending RO lifetime to 2033;
• allowing for increased support for new small scale generation;
• increasing support back up to 1 ROC for landfill gas;
• allowing for NIROC revocation; and
• removing a requirement for sewage and landfill gas sustainability reporting.

3. All changes to the NIRO outlined above will need to be cleared by the European Commission for State Aid issues. However, State Aid approval has already been gained for an increase in support for landfill gas which will be implemented through legislation this year.

4. GB is introducing a variety of feed-in tariffs for small-scale generation (under 5MW), subject to state aid approval, on 1 April 2010: http://www.decc.gov.uk/en/content/cms/news/pn10_010/pn10_010.aspx

5. Northern Ireland does not currently have the legislative powers to introduce a feed-in tariff. That is why DETI has proposed to amend the NIRO to provide increased support for NI small-scale generation under the NIRO to replicate, so far as possible in NI the support levels being proposed under the FIT. The levels of support proposed for all new eligible projects from 1 April 2010 are set out on page 10 of the Government Response which can be found at: http://www.detini.gov.uk/deti-energy-template-menu-3

Existing generators will continue to benefit from current levels of support under the NIRO, which was the basis on which they invested.

6. For media enquiries please contact the DETI Press Office on 028 9052 9297. Outside office hours, please contact the Duty Press Officer via pager number 07699 715 440 and your call will be returned.