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£8 million a year to keep NIRO going?

Last updated on 11/05/2016
The Department of Energy and Climate Change is planning to close one year early the Renewable Obligations (RO) support scheme for onshore wind turbines. DETI has said it will keep the scheme open here until 2017 but hasn’t revealed the bill that we will incur if we have to meet the cost from our own resources.  

Below are my calculations for the assessment that it could cost Stormont at least £8m a year to retain the RO support programme for wind turbines a year longer than in Great Britain.

I’ve gone into detail so that anyone can see how I’ve come up with the figures.

In 2013/14 according to the annual Ofgem Renewables Annual report, wind farms here in Northern Ireland attracted 1.58m ROCs for the 1.47m MWh they produced. That’s about 1.07 Renewable Obligation Certificates or ROCs for every MWh generated by the turbines.

The wind developers’ organisation NI-RIG report there was 562 MW of installed wind capacity in 2013 and 750MW in 2014. That would imply an installed capacity across the 2013/14 financial year of around 610 MW.

The Ofgem figures, showing those turbines in that year generated 1.47 MWh, suggest that their efficiency was 27.5%. That’s 1,470,000 divided by 5,343,600 - the number of hours in the year (8760) multiplied by the installed capacity in MW (610). That accords with other estimates of efficiency.

NIE report that there is around 500 MW of renewable generation, as they put it, in the delivery pipe. The vast bulk of that will be wind. 

Let is assume that by keeping open the RO for wind a year longer than in the rest of the UK, 80 MW of new wind capacity is installed. 

That will produce across a year: 80 x 27.5% x 8760 or 192,720 MWh which would, on past experience, attract 206,210 ROCs. 

A RoC should be worth about £45 a MWh in 2016/17 judging by current values.

This all means that if we have to foot the entire bill for keeping the Renewables Obligation scheme going beyond the cut off point in 2016, the bill to Stormont could be £9.3m a year.

It must be acknowledged that large scale wind turbine developments now only get 0.9 ROCs per MWh. Assuming all the installed capacity is large scale, the number of ROCs comes out at 173,448 producing a possible bill of £7.8m a year.

Sounds like a lot of money but it could be worth it to enhance our ability to attract companies which want to source green energy. And then of course there is the battle against climate change in which we ought to play our part.

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