A report from RenewableNI has set out how supportive Department for the Economy (DfE) policy can reduce the cost of renewable electricity for consumers.
“Supporting Renewables – Understanding policy impact on the cost to the consumers of renewable development in Northern Ireland” investigated how DfE’s renewable electricity support scheme can boost attractiveness in investing in renewable projects in Northern Ireland and reduce the cost to consumers by addressing certain risks.
Cornwall Insight, the report’s author, revealed the key factors that will de-risk investment and result in lower prices are a longer fixed-term contract, indexation and compensation on curtailment and oversupply (dispatch down).
The report also addresses the industry concern that a new support scheme would be mandatory, limiting the potential for other routes-to-market including power purchase agreements.
Detailed analysis calculated that a non-mandatory renewable support scheme that is 100% linked to Consumer Price Index, compensates on all dispatch down and for over 20 years could reduce the base bid price by almost 50%.
The report also concluded these were “quick wins” as inclusion of them in the support scheme is under the control of DfE.
RenewableNI Director, Steven Agnew, said: “Renewable development has stagnated in NI since the closure of the last support scheme.
“Investors are currently put off by extended timelines, higher costs and lack of government support, creating risks for projects.
“DfE needs to protect its consumers from high costs of energy and ensure a security of supply, and they need to do it by 2030 to meet the legal obligation of 80% renewable electricity by 2030.
“Launching a new support scheme that addresses the concerns of potential investors and developers will ensure that the Department is able to achieve these goals.”
Report author Lisa Foley, Principal Cornwall Insight, added: “Northern Ireland’s renewable energy developers are facing an uphill battle, grappling with risks that outweigh the potential gains of investing in renewable schemes.
“The report reveals six key challenges to investment – ranging from high costs and delays to market barriers – that were echoed consistently in our conversations with industry experts.”