Northern Ireland aims to implement a competitive auction process akin to those utilized in Great Britain and the Republic of Ireland to drive the development of renewable energy projects.
The inaugural auction is slated for next year, with projects anticipated to be operational by 2027. This initiative aligns with Stormont’s ambitious target of sourcing 80% of Northern Ireland’s electricity from renewable sources, primarily wind, by 2030.
Renewable energy accounted for approximately half of Northern Ireland’s electricity generation last year. However, the pace of new renewable energy project development has slackened following the cessation of the Northern Ireland Renewables Obligation subsidy scheme.
The proposed scheme will adopt a Contract for Difference (CfD) auction model. Under this scheme, companies will bid to develop renewable energy projects, ensuring a guaranteed price for the electricity they generate. The competitive nature of the process aims to prioritize the most efficient and cost-effective projects.
In the GB CfD scheme, if electricity prices exceed the auction-determined price, generation companies reimburse the excess to energy suppliers. Conversely, if prices dip below the guaranteed price, energy suppliers, and subsequently consumers, compensate the company for the shortfall.
The Department for the Economy has released an update on the design of the NI scheme, pending finalization after comprehensive assessment, including a financial impact evaluation to gauge potential implications on consumers’ bills.
The announcement of progress toward a new support scheme has garnered positive feedback from RenewableNI, an industry advocacy group. Director Steven Agnew emphasized the substantial pipeline of renewable projects awaiting favorable policy signals. Agnew expressed readiness to collaborate with the Department for the Economy to ensure effective implementation, safeguarding consumers from escalating energy costs while ensuring a reliable energy supply.
Agnew stressed the pivotal role of decisions made in the coming year in determining the attainment of the 2030 renewable energy target.