Issues

A shock end to wind subsidies

agendaNi takes a look at the Department of Enterprise, Trade and Investment’s major U-turn on wind energy subsidies.

The current wind energy subsidy for land-based wind turbines is to end in April 2016, a year earlier than planned, the department’s Minister Jonathan Bell MLA has confirmed. This news has come as a surprise to many and represents a U-turn in policy for the Minister who had, as recently as June, claimed that he would not be following in Westminster’s footsteps by bringing the existing scheme to an early close.

There are currently 35 operational on-shore wind farms (>1 turbine) in Northern Ireland with a capacity of over 600 MW, with more than the same again having been approved but not yet constructed. Proportionally, this is above the UK average, highlighting just how important this sector is to developers and investors in Northern Ireland.

 However, the Minister claimed that keeping the subsidy system in place to 2017 as he had originally intended, would have meant that every consumer in Northern Ireland would have incurred an extra £5 charge to their annual domestic electricity bill and an extra £10,000 would have been added to large energy user’s bills for a period of 20 years. Energy policy is a devolved matter for the Stormont Executive, but decisions taken at Westminster are having a knock-on effect on Northern Ireland’s policies. Under the current UK system, all onshore energy projects are guaranteed a subsidy but this system is being radically scaled back by the British Government and will be replaced by a system in which there is competition for subsidy payments, meaning renewable development will take place in the UK wherever it is most economic.

 Speaking about his decision, Minister Bell claimed the Northern Ireland would now align with Westminster’s policy “of closure to on-shore subsidies in 2016 but with a grace period for those projects with eligible criteria.” It is understood that one of those grace periods will apply to larger wind developments. Small scale wind schemes can still qualify for the subsidy providing they already have planning permission, property agreements and grid connection agreements in place while the larger ‘cluster connection’ schemes have until 30th October to get all their necessary agreements in place.

The organization Action Renewables has warned that if nothing replaces the renewables obligation then around 10,000 jobs could be lost in Northern Ireland. This decision has also been met with dismay by the Ulster Farmers’ Union who feel that small scale renewable projects should remain exempt from the change. Speaking about the decision UFU rural enterprise chairman Gary Hawkes claimed that the two week consultation period for this decision was ‘inadequate’ and that the cost to the consumer of small scale wind farms of less than 250 kW would be ‘minuscule.’ Hawkes also warned that because of grid connection problems beyond their control, many farmers who have already committed funds to wind turbine projects will not be connected until spring 2016 and will consequently be left out of pocket because of this decision.

 

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