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.