Lack of renewables support 'risks creating two speed market in Northern Ireland'

Out-Law News | 01 Oct 2018 | 12:45 pm | 2 min. read

The Northern Irish renewable energy market risks turning into a “two-speed” environment without better support for its development, an expert has warned.

Energy expert Richard Murphy of Pinsent Masons, the law firm behind Out-Law.com, said the closure of Northern Ireland’s development support mechanism for renewables meant that Northern Ireland risked having no viable route to market for renewable technologies in the near term.

Murphy’s warning came as the Integrated Single Electricity Market (I-SEM) was launched. It is a wholesale energy market covering both Northern Ireland and Ireland.

The north-south interconnector links the Northern Ireland and Ireland electricity networks and helps ensure the market operates efficiently with no restriction in electricity flow between north and south.

The Northern Irish development support mechanism Renewables Obligations Certificate (ROCs) closed to new capacity in April last year and there is currently no sign of a replacement. Meanwhile Ireland has started work on its Renewable Electricity Support Scheme (RESS).

RESS is a model for delivering more of Ireland’s electricity needs through renewable sources, and is part of the country’s efforts to meet its EU obligations for the amount of electricity supplied by renewables.

Murphy said the collapse of the Northern Irish assembly in January 2017 was partially responsible for the lack of progress in developing a new support mechanism.

“Obviously the political impasse at Stormont has impacted on decision making but in whatever form that is resolved we have a number of options available to us,” Murphy said. “Energy is a devolved issue so we have flexibility to shape our own policy with a standalone scheme."

“We could decide to opt-in to Great Britain's Contract for Difference regime but that has already locked out onshore wind in favour of offshore wind and emerging technologies, and the Northern Ireland market has much further to travel on those fronts. Ireland's RESS scheme is still at high level design stage so the option remains open to align in that direction and shape a common framework across the island,” Murphy said.

Murphy said it was crucial for Northern Ireland to keep pace with Ireland on renewable technology.

“With I-SEM upon us and no sign of progress towards a successor regime for ROCs the concern must be that Northern Ireland would lack a viable route to market for renewable technologies in the near term,” he said. “If I-SEM is to realise its potential of a balanced grid moving energy efficiently from producer to demand we cannot have a situation where policy barriers or inaction skews a lop-sided market.”

Murphy said the local energy sector was guided by the 2010 Strategic Energy Framework (SEF) which had a lifespan up to 2020.

“Energy is an area where investment operates on a long lead time, and businesses need clarity on policy makers' direction of travel. Flagship strategies such as SEF require considerable consultation and debate between government, energy stakeholders, business and consumer representatives. Hopefully some mechanism can be found to start these conversations so any period of inertia can be kept to a minimum,” Murphy said.