Renewable Energy

Oral Answers to Questions — Enterprise, Trade and Investment – in the Northern Ireland Assembly at 2:45 pm on 9th February 2016.

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Photo of Kieran McCarthy Kieran McCarthy Alliance 2:45 pm, 9th February 2016

1. Mr McCarthy asked the Minister of Enterprise, Trade and Investment how he will ensure a stable regulatory environment for the local development of renewable energy. (AQO 9595/11-16)

Photo of Paul Givan Paul Givan DUP

3. Mr Givan asked the Minister of Enterprise, Trade and Investment for an update on the renewables obligation for small-scale onshore wind. (AQO 9597/11-16)

Photo of Danny Kennedy Danny Kennedy UUP

11. Mr Kennedy asked the Minister of Enterprise, Trade and Investment for an update on the closure of the Northern Ireland renewables obligation for onshore wind power. (AQO 9605/11-16)

Photo of Jonathan Bell Jonathan Bell DUP

With your permission, Mr Deputy Speaker, I will answer questions 1, 3 and 11 together. Our renewables record has been very successful to date. That has been due to a combination of being able to harness our natural resources whilst ensuring that the support costs are spread much more widely than our Northern Ireland consumer base. However, this means that we are also unavoidably influenced by national policy decisions, as borne out by the proposed early closure of the renewable obligations across the United Kingdom to onshore wind. I am mindful of the uncertainty that has been created around early closure to wind. My priority, at present, is to ensure that we have a timely and managed closure of the existing scheme in Northern Ireland. I want to provide the certainty that delivers the most renewable deployment for the least cost to Northern Ireland consumers.

Photo of Kieran McCarthy Kieran McCarthy Alliance

I thank the Minister for his reply. Will he tell the Assembly what he plans to do during the next six months, under the moratorium on the new grid connections?

Photo of Jonathan Bell Jonathan Bell DUP

There have been significant difficulties with the grid connections and grid connection offers. The Member is correct; NIE had to set aside its normal 90-day period for making grid connection offers due to the surge in applications that followed the regulator's determination that NIE could not require planning permission before making a grid connection. The grid simply could not accommodate the level of increase. It requires specialist analysis and, potentially, significant investment, which would have to be paid for by consumers. NIE is already committed to connecting projects which will almost double our installed renewable capacity. That is a huge challenge. I do not have powers to intervene. I cannot direct NIE or the Systems Operator for Northern Ireland (SONI) to prioritise one technology over another.

Photo of Paul Givan Paul Givan DUP

In discussions with the Department of Energy and Climate Change (DECC), has it outlined what the proposed backstop power, which is now included in the Energy Bill, will mean and what the consequences of that could be for the Northern Ireland renewables obligation certificate (ROC)?

Photo of Jonathan Bell Jonathan Bell DUP

DECC has included a backstop power in its proposed Energy Bill, as the Member said, to protect GB consumers should Northern Ireland take a different approach to the Northern Ireland renewables obligation (NIRO) closure than that taken in GB. The backstop power will give DECC powers to prevent GB suppliers redeeming Northern Ireland ROCs from projects that accredit from 1 April 2016 and do not meet the closure eligibility criteria that were equivalent to those in GB. This provides little comfort for those projects and has the potential to have wider implications for the whole renewables industry here.

Photo of Danny Kennedy Danny Kennedy UUP

I am interested in the ministerial responses thus far. How does the Minister intend to deal with the ongoing uncertainty created by his decision on the NIRO issue last summer? Does he accept that the delay since his closure consultation last October has created all sorts of problems for the renewables sector here? Does he have any plans to support the development of the industry after the NIRO ends? Will he bring, and how will he bring, certainty for investors, including many in my constituency?

Photo of Jonathan Bell Jonathan Bell DUP

I want to bring certainty as soon as possible. I am considering a range of options. I think that the Member will agree that DECC changed the policy. Yes, we can do what we choose to do where we have devolved powers, but DECC changed the policy, not once but a number of times. I have spoken to the Secretary of State for Energy and Climate Change. I went to London and I said, "Look, under the coalition Government, the previous Minister agreed with you a line which was then put out to the industry. The Conservative Party then came into power as a single party and moved the goalposts for onshore wind". They moved the goalposts, not me. They then changed their position at different times.

I want to assure the House that I will always look at what delivers the best value to Northern Ireland. Unfortunately, I have had to deal with changing positions from DECC, and that has led to the uncertainty that we have. I will try to bring it to a conclusion as quickly as possible to allow people to go forward; however, let no one misunderstand that the changing position has come from the Department of Energy and Climate Change.

Photo of Máirtín Ó Muilleoir Máirtín Ó Muilleoir Sinn Féin

Go raibh maith agat, a LeasCheann Comhairle. Mo bhuíochas fosta leis an Aire as na freagraí go dtí seo. We all have some sympathy with the Minister in that these decisions have emerged from London, but I want to move on past the ROC to the renewable heat incentive (RHI). This morning, we spent two distressing hours in the Committee for Enterprise, Trade and Investment listening to officials tell us that another bombshell has been dropped on the renewable industry sector and that the RHI is to be removed.

Photo of John Dallat John Dallat Social Democratic and Labour Party

Order. Can we have a question, please?

Photo of Máirtín Ó Muilleoir Máirtín Ó Muilleoir Sinn Féin

Can the Minister guarantee that he will give us clarity on that issue, work in collaboration with the sector, and include the Committee as he reaches a decision? Let the date not be next week, Minister.

Photo of Jonathan Bell Jonathan Bell DUP

At the end of last year, there was an increase in demand for the renewable heat incentive scheme. My Department faces a huge budgetary pressure, given the Chancellor of the Exchequer's decision to limit the amount of money paid to Northern Ireland out of the UK pot for renewable heat. That is why, last week, I signalled my intention to ease that financial pressure, which could amount to over £27 million, by announcing the immediate closure of the scheme and bringing forward an order to suspend the scheme as soon as possible. I want everyone to know that I am listening to the industry and to individuals who are installing renewable heat boilers. I will come back to try to give that clarity at the earliest possible date.

Photo of Alban Maginness Alban Maginness Social Democratic and Labour Party

Unlike the previous questioner, I really do not have very much sympathy with the Minister in relation to his summary decision on the renewable heat initiative. It is not acceptable. It will impact adversely on many small installers. Will he review his decision or take remedial action to strengthen those small tradesmen?

Photo of Jonathan Bell Jonathan Bell DUP

I think that the Member has misunderstood what the Chancellor of the Exchequer has done with regard to renewable heat and the fact that the goalposts have been moved and that a limit has been put on Northern Ireland. If we go beyond that limit, we have to bear the costs ourselves. It was introduced in November 2012 to the non-domestic sector and in 2014 to the domestic sector, and it has been taken up very successfully. To date, over 3,500 renewable heating installations have been incentivised. Uptake has been higher than in GB. We have exceeded the Northern Ireland Executive's 2015 target, which was 4%. About 6% of Northern Ireland's heating needs is now provided through renewable heating technologies. The Member would do well to look at the Chancellor's autumn statement and what follows it and also consider the costs to Northern Ireland.