Real costs of renewables to the NI consumer
All renewable energies in NI are subsidised and at present each consumer in NI pays a levy of £17.25 per annum towards subsidising these renewables for developers. However, the NI exectutive are currently considering that we could see an almost "three-fold increase by 2020." Doubling the target to 40% would, presumably, increase this levy six-fold leaving each consumer in NI to pay a levy of upwards on £103.50 per annum.
In addition according to the Report on NIE (Northern Ireland Electricity) Grid Connections, presented to the ETI ( The Committee for Enterprise, Trade and Investment) Committee on 18th Nov 2014, NI has already exceeded the legally binding UK target of 15% by 2020. Perhaps this is hardly surprising given the subsidy level. In addition to the NIRO (Northern Ireland Renewable Obligation) subsidy costs, the same report stated that around £60million is currently being spent by the Executive on upgrading the Grid to enable 27% renewable capacity. However, to achieve the 40% target is estimated by NIE to be around £420m.
At the same time, the impact of renewables has effectively raised operating costs for conventional power plants, which have to compensate for the ups and downs of wind and solar power with more frequent start-ups and shut-downs of their own. This gives rise to extra fuel and maintenance costs, leaving conventional generators unable to cover their fixed costs (capital repayment and overheads) through the sale of their electricity. The IEA estimates that last year the wholesale price of electricity was about 23% below what power plants needed to cover the cost of supply. It is not surprising therefore that several utilities have either been shutting down or temporarily moth-balling their conventional power plants. It is the reason that virtually all EU member states are creating capacity mechanisms to reward conventional generators for remaining available to provide back-up energy for renewables when needed.
All EU member states are creating capacity mechanisms to reward conventional generators for remaining available to provide back-up energy for renewables when needed
ost "three-fold increase by 2020."
Arguably more importantly, this move should curtail opportunistic development by generators, who are no longer able to avail of the RO payment system in the mainland UK, to continue to take advantage of NI and our NIRO scheme and high renewable target of 40% - for example - solar power is best suited to the latitudes below Birmingham yet our planning system is being inundated with applications for large scale solar farms in the open countryside since the Secretary of State for the Environment, Liz Truss MP, declared them a 'blight on the countryside'. In return, more climate appropriate renewables, perhaps tidal or offshore wind generation, will come on stream in Northern Ireland if they prove to be the more economically viable without the artificial support of the ROC system.
The Executive needs to be made aware of the sever challenges it will face for not implementing correct policies and procedures if it continues to operating under the current NIRO scheme and not having measures and controls in place to manage and control these renewable energy providers i.e. no large scale solar planning policies, no Caps on NIRO (does the Executive have an unlimited supply of funds to fund the NIRO?) , decommissioning arrangements in place for large scale renewables that are not fit for purpose etc.