UK: Consultation Published On Northern Ireland Renewables Obligation (NIRO) Banding Review

Last Updated: 31 October 2011
Article by Michelle T. Davies

Northern Irish Department for Enterprise Trade and Investment (DETI) have published the NIRO Banding Consultation. The consultation sets out the proposed levels of support for generating stations from 2013-17 under the NIRO. The consultation broadly follows the proposals which were announced by the Department of Energy and Climate Change (DECC) for England and Wales and demonstrates the Northern Irish Executive's ongoing support of renewable energy technologies and its commitment to the challenging target to achieve 40% of Northern Ireland's electricity consumption from renewable sources by 2020.

The full list of the proposed bandings can be found by clicking here and the full consultation document is available by clicking here.

Please note the following key proposals:

  • CHP Uplift: Like the DECC, the DETI proposal is to end the CHP uplift under the RO for generating stations accredited after 1 April 2015. Support will then be under a combination of the RHI for the heat element and under the RO for the electricity element. The proposal is that new generating stations accredited between 1 April 2013 and 1 April 2015 will have a one-off choice to opt for support under the CHP uplift in the RO or under the Northern Ireland RHI. The NI Executive is specifically asking whether stakeholders agree with these transition arrangements.
  • Solar support increased: The DETI propose to increase the ROC level for Solar PV installations up to 10kW from the current 4 NIROC/MWh to 5 NIROC/MWh. The DETI believe this uplift will provide sufficient incentivisation for the domestic and community sector without impacting on overall NIROC costs. They also propose to retain the current NIROC levels of 4 NIROC/MWh for stations between 10kW and 50kW and 2 NIROC/MWh for stations above 50kW up to 5MW. These proposals differ from those of DECC under which solar support was reduced. In setting the higher level of NIROCS for PV they are mindful of the situation in Great Britain and if costs do fall significantly and deployment looks likely to exceed expectations the support rates will be considered. Above 5MW they propose to remain consistent with DECC and set support for Solar PV at 2 NIROCs/MWh stepping down to 1.9 NIROCs in 2015/16 and 1.8 NIROCs in 2016/17.
  • Landfill gas: DETI propose to retain the 1 NIROC/MWh for landfill gas until March 2015 after which support for this technology will cease in line with the other Renewable Obligations in England and Wales and Scotland. Unlike the rest of the UK, where generation capacity of in respect of landfill gas is expected to reduce by more than half over the next 10 to 15 years as there is no further significant deployment potential, the position in Northern Ireland is different. In addition to the 6 stations already accredited there are another potential 11 sites with a combined capacity of approximately 8MW.
  • Increased support for marine and tidal technology: the proposal is to offer support at 5 NIROC/MWh for wave and tidal technologies up to 30MW per generating station. This can only be claimed by projects that are operational before 1 April 2017, and the DETI believe that "this approach will help us to achieve the acceleration that the sector requires".
  • AD/Hydro/onshore wind:There is no small scale Feed-In Tariff in Northern Ireland so these technologies receive multiple NIROCS to give an equivalent level of support to the Great Britain FIT. They are proposing no change to the current bands up to 5MW. Above 5MW their proposals are the same as those proposed by DECC, with onshore wind going to 0.9 NIROC/MWh, hydro to 0.5 NIROC/MWh, and AD staying at 2 NIROC/MWh stepping down to 1.9 NIROC/MWh in 2015/16 and 1.8 NIROC/MWh in 2016/17.
  • New Biomass Support: The DETI have followed the DECC proposals with the introduction of two new bands for biomass; Biomass Conversion and Enhanced Co-firing. Both of the new bands are proposed to receive support of 1 NIROC/MWh from 1 April 2013. Enhanced Co-firing generating stations must use at least 15% biomass in any one month. There is also a proposal to remove the current 12.5% co-firing cap completely from 1 April 2013.
  • Proposal to extend the lifetime of the NIRO from 2033 to 2037. This will bring the NIRO into line with the end dates for the Renewable Obligations in England and Wales and Scotland.
  • Consultation on Contract for Difference (CfD) FIT and small scale FIT: The paper poses a number of questions to stakeholders on a proposed approach for Northern Ireland and suggests that a FIT CfD could work in Northern Ireland and within the all island single electricity market (SEM). A key factor in any final decision seems to be securing a commitment from the Coalition Government that any replacement for the NIRO continues to have the costs socialised across all UK consumers. If Northern Ireland does introduce a FIT CfD then they will also have to introduce a small scale FIT. Their consultation asks whether Northern Ireland should introduced the FIT CfD and also a small scale FIT.

Arlene Foster, Minister of Enterprise, Trade and Investment notes that "The purpose of the Review is to ensure that incentive levels reflect changes in technology costs and deployment over time; that they are set as cost-effectively as possible and that they help both to bring forward renewable technologies at the capacity needed to achieve our renewable energy target, while delivering value for money for consumers."

The closing date for written responses to the consultation paper is 19 January 2012. Following the closing date, all responses will be analysed and considered along with any other available evidence to help reach a final position on the proposals identified in the consultation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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