Northern Ireland news

Renewables industry research casts doubt on finance watchdog's figures

Northern Ireland has a proportionately greater number of single wind turbines than Britain. Picture by Mal McCann

RESEARCH carried out by the north's renewables sector claims the findings of a finance watchdog report were skewed because it underestimated the cost of installing small scale single wind turbines.

A report last year from the Northern Ireland Audit Office highlighted "excessive" subsidies paid to the owners of single wind turbines, saying some investors received a 20 per cent-plus rate of return, enabling them to cover the cost of installation within the first four years of a 20-year scheme.

The report into the Northern Ireland Renewables Obligations (NIRO) scheme found that those generating renewable electricity would be paid up to £5 billion from consumers' bills over the lifetime of the scheme.

Much of the cost is burdened by consumers in Britain, who pay more than £80 a year towards the subsidy compared to around £28 in the north.

But due to measures introduced by Arlene Foster in 2014 when she was economy minister, support for single turbines in the north is considerably higher than in Britain, which the audit office believes is one of the reasons the region has a proportionately greater number – up to three times as many per square kilometre.

RenewableNI, which is headed by former Green Party leader Steven Agnew, said the watchdog's report was "not fit for purpose" as it based its calculations on returns to wind turbine owners on a sole turbine not connected to the grid.

The group commissioned consultancy firm KMPG to conduct research on its behalf, which has identified a rate of return for investors of almost 10 per cent, less than half the figure highlighted by the audit office – meaning it would take twice as long to recoup the installation costs.

RenewableNI said there were also other wider benefits to generating renewable energy which the finance watchdog had not considered.

"This review carried out by experts in the field, reveals not only the true cost to consumers of the NIRO scheme but also the far-reaching positive benefits of small-scale wind for the economy, jobs and the environment, at a reasonable rate of return that falls under government estimates," Mr Agnew said.

“Small-scale wind also brings with it job creation, enhanced security of supply and the ability to infill pockets of grid capacity which can’t accommodate larger projects – all at the price of 1 pence per turbine to the Northern Ireland consumer."

An audit office spokesman said that because of commercial sensitivities its calculations had been based on a "limited number of actual invoices" relating to standalone turbines and their installation costs. It also used data from Ofgem (Office of Gas and Electricity Markets) and the Utility Regulator, and included an allowance for annual servicing costs.

"RenewableNI have told us they have been able to obtain considerably more information regarding actual costs from members of their trade association and these have been used in their report," the audit office spokesman said.

"It is very difficult to estimate the precise rate of return on an average turbine because much of the information required to do so is commercially sensitive and therefore not publicly available."

The audit office urged RenewableNI to share its data to enable the Department for the Economy to carry out a review of actual rates of return.

  • This article was amended on January 22 2021

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