Renewable electricity has been the major success story in Northern Ireland in our efforts to address climate change. The NI Renewables Obligation (NIRO) has been the support mechanism behind this achievement. The majority of the NIRO related issues identified in the Northern Ireland Audit Office (NIAO) report focus on a subset of two technologies which represent a small proportion of the renewable electricity generation supported by the scheme.
The Department welcomes the fact the NIAO has recognised a number of the NIRO’s achievements. These include:
- increased levels of renewable electricity consumption from around 3% in 2005 to almost 47 per cent for the 12-month period up to 31 March 2020 (this has now increased to almost 48 per cent for the 12-month period up to 30 June 2020);
- exceeding the Executive’s 40 per cent renewable electricity consumption by 2020 target a year early; and
- the positive impact of increased levels of renewable electricity on wholesale electricity prices.
The Department also welcomes the positive messages highlighted by the NIAO following its review including:
- the NIRO operates in a manner that takes into account factors such as higher levels of fuel poverty in Northern Ireland and, as a consequence, Northern Ireland consumers pay considerably less for the NIRO than consumers in Great Britain pay for their renewables schemes;
- the resulting reduction in Green House Gases (GHG) and carbon emissions benefits the environment and society;
- the expansion of the renewables industry has led to job creation; and
- more Renewables Obligation Certificates (ROCs) are issued to Northern Ireland generators than Northern Ireland suppliers require to meet their renewables obligation; surplus ROCs are purchased by Great Britain suppliers and contribute towards meeting the Great Britain renewables obligation resulting in a net positive transfer to the local economy.
The Department notes that the NIAO report reflects the fact that the NIRO operates in parallel with the Renewables Obligations (ROs) in Great Britain. This means that the NIRO largely mirrors the Great Britain ROs, and ROCs are tradable across the UK. The approximate annual cost of the NIRO to the average Northern Ireland domestic customer in 2019 was approximately £31 ie around 5 per cent of the total bill. It is important to note that this cost is driven by the annual obligation level and is not directly linked to the level of revenue received by renewable generators by trading NIROCs in any given year.
Significant elements of the report relate to issues that sit outside the legislative remit of the Department for the Economy.
The Department will consider the recommendations and findings included in this report as it develops future renewable electricity policy.
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