Microgenerators of electricity are incentivised under the Northern Ireland renewables obligation (NIRO), which is the main mechanism for supporting renewable electricity generation in Northern Ireland. Approximately 90% of those receiving support are microgenerators. In 2010, I increased the incentive level for new microgenerators using wind, hydro and solar photovoltaic technologies. In addition, in July this year I launched a consultation on a £25 million renewable heat incentive, which recommends support for generators, including microgenerators, to install renewable heat technologies over the next four years.
I have indicated to the House on many occasions that we did not have the authority to embrace the feed-in tariff (FIT) because we did not have the legislative capability. It came about in England and Wales through a change that came at a late stage to the Bill that was going through the House of Lords. It, therefore, did not include Northern Ireland, and we could not bring it in to Northern Ireland at that time. I did, however, ask officials to look at whether the feed-in tariff would be better for Northern Ireland than what we have currently, namely the Northern Ireland renewables obligation.
The cost of the NIRO is spread right across the UK, so the FIT would, more likely than not, apply just to Northern Ireland. In other words, the cost would just be spread across consumers in Northern Ireland. That would mean that it would cost more to implement the FIT for consumers here in Northern Ireland. I did not think that that was a road that we would want to go down, given the context of where we are on energy. However, as the Member will probably know, electricity market reform is very much on the agenda of the Department of Energy and Climate Change (DECC). Officials are working with DECC to ensure that Northern Ireland gets the proper incentivisation model moving forward. So this is an area of flux, and we very much need to be in the middle of it with DECC to make sure that Northern Ireland’s voice is heard.
I am very interested in the Minister’s answer to Mr McCallister. Is the Minister indicating that her preference for microgeneration would be to have a feed-in tariff sometime in the future? As the Minister probably knows, it has been very successful in other jurisdictions. Given the paper that DECC produced recently, it might be the way forward for Northern Ireland.
As the Chair of the Committee knows, we looked at the issue in the previous mandate when he and his Committee carried out its work on energy. As I indicated then, we did not have the legislative authority, but we did some work. We very much wanted to look at the FIT as a possibility. We were not going to close our minds to it, because it is happening in the rest of the United Kingdom and, indeed, in the Republic of Ireland. However, I am concerned that the costs associated with introducing and administering a FIT could increase the cost to electricity consumers.
I know that, in all the things that relate to energy, we have to balance competing goals and look at sustainability and competitiveness. We also have to look at the cost to consumers, which is always part of the mix when I look at these matters. However, matters have moved on since the debate that we had last year about having a FIT just for Northern Ireland. Electricity market reform indicates the end of the renewables obligation in the United Kingdom in 2017, and, therefore, we will probably have to look at a new mechanism. We are discussing what that new mechanism will be, and I am sure that the Committee will be very much involved in that.
I thank the Member for his question. This issue comes up from time to time among people who are trying to manage wind generation and find they are having difficulties not just with that wind generation but with the new anaerobic digestion. People can have difficulties getting a price indication from NIE, and there can be a delay with the grid connection.
As the Member probably knows, NIE operates under a regulatory framework determined by the Utility Regulator as detailed in its licence from him. It is required under that licence to provide a connection offer to all generation connecting into the distribution system in line with its connection charging statement. I think part of the difficulty is that the price indication is given at the end of the planning process, so it does not happen concurrently but consecutively. That causes some delay. However, I understand that NIE has recognised that it needs to have adequate resources in place to meet the increasing number of connection requests.
To me, an increasing number of connection requests indicates that more and more people are availing themselves of a mix of renewable energies. I understand that NIE is recruiting staff to deal with connections as well as recruiting managerial and administrative staff. I hope that we will see a more streamlined version of what is happening and has been happening over the past number of years. If we are to have the amount of renewables that we have targeted for ourselves, we need to get those renewables connected to the grid.
I am not aware of the detail of the Member’s question about Scotland, but I am happy to take some information from him. I had an interesting exchange recently with some members of the Fermanagh Trust about community benefits from wind farms. I have asked officials to look at that issue because we know that, in some cases, companies bring a great deal of community benefit to areas where wind farms are hosted. I hope that other companies do the same. Huge investment has been made in wind farms, and communities should benefit from that. I am aware, given that conversation, that some areas of the United Kingdom seem to benefit a great deal more than some of the host communities here in Northern Ireland, and I have asked officials to look at that.