The long-awaited Renewable Electricity Generation Bill (the Bill) has recently been introduced to the Northern Ireland (NI) Assembly. The introduction of this Bill is an important milestone for developers and investors looking for a route to market for new NI renewable projects, particularly given the absence of a support mechanism for renewables in NI since the closure of the Northern Ireland Renewables Obligation (NIRO).

 

What does the Bill do?

The Bill grants the legislative powers required for the Department for the Economy (DfE) to provide financial assistance to encourage electricity generation in NI.

Whilst the bill itself is relatively light in detail, its passage into law is a key requirement for the DfE to deliver the proposed Renewable Electricity Price Guarantee scheme (REPG) which aims to incentivise the deployment of renewable generation at the most affordable price for customers, with the first auction launch expected in early 2027.

 

Why does it matter?

The introduction of the Bill is key in unlocking future investment in renewables in Northern Ireland. The statutory framework is necessary as it allows the secondary legislation to be passed to introduce auction-based support enabling financing for projects to move from pipeline to delivery.

By supporting increased local renewable generation through the enabling powers granted by this Bill, the DfE’s aim is to improve long-term price stability for renewable generators, encouraging investment in the renewables space in Northern Ireland.

 

Key Features of the Bill

Other than the usual enabling language that is typical of primary legislation of this nature, and similar to previous regulatory interventions in energy markets, including RHI or the recent energy pricing intervention, we’ve highlighted a couple of interesting features of the Bill below:

 

Supplier Levy

The Bill clearly envisages a supplier levy model. The funding model outlined anticipates that payments will be made by suppliers to a central counterparty responsible for managing and settling payments under the scheme.

Whilst the mechanics will follow in secondary legislation, the legislative architecture currently in place is a strong signal that the cost of the scheme will be recovered via suppliers and likely in turn passed through to electricity consumers via electricity bills.

 

Community Benefits

Notably, the Bill expressly provides for community benefits at primary legislation level.

It includes powers for the DfE to make regulations to obligate a generator participating in the scheme to make arrangements for payments to people who own or reside at a property within the locality of the generating station. The inclusion of these provisions is a unique feature of this proposed legislation and places the potential for direct generator-to-consumer payments on a statutory footing.

 

The exact wording in the legislation is below:

“The Department may make regulations that provide that, where a CfD has been entered into by a generator in respect of a generating station, the generator must make arrangements for the payment of specified sums to specified persons.”

 

The community benefits section of the Bill anticipates that the regulations may require generators to establish arrangements for payments to eligible local residents or property owners. In particular generators may be required to:

 

• make periodic payments potentially on an annual basis;
• calculate those payments by reference to the amount of electricity generated by the relevant facility or by reference to a specified cap;
• identify eligible recipients by reference to ownership or occupation at a property which is local to the facility;
• operate an application process for payments;
• ensure that the potentially eligible individuals are aware of the community benefit arrangements;
• determine applications for payment;
• demonstrate compliance with the regulations made by the DfE; and
• pay sums that are due to eligible people, with unpaid amounts potentially recoverable as a civil debt.

 

This approach has been a key topic of industry discussion for some time in relation to the practicality of generators making direct payments to local residents and may also have been a topic for debate within DfE.

 

In ROI, a statutory near-neighbour payment is embedded as a scheme condition for RESS, with a fixed per year per eligible household payment within a defined radius (1km originally, extended to 2km under RESS 5), sitting within a wider Community Benefit Fund alongside a community-initiative allocation and admin costs, with the near-neighbour and admin elements capped at a percentage of the fund value. The payments apply to occupied principal residences only, tenants (not landlords) receive them, there is one nominated adult per household and landowners already receiving turbine lease payments are excluded.

 

Developers will be monitoring this element of the final REPG scheme design closely, looking to ensure that the scheme provides for:

 

• A fixed, capped radius for eligibility;
• A clear cap on aggregate near-neighbour payments as a percentage of the total community benefit fund, to prevent an unusually dense population near one site from consuming the entire fund and crowding out the wider community allocation, together with an accessible derogation process where genuine over-subscription arises;
• Obligations to make eligible homeowners aware of eligibility to receive payments are carefully drafted and do not impose onerous obligations on developers, i.e. the scope of what must be advertised and to whom is defined precisely to avoid disputes about adequacy of notice;
• Having clear eligibility rules that are comparable with RESS and avoid the potential for developers to be drawn into disputes amongst multiple occupiers, tenants or homeowners (for example, developers could be indemnified from liability for making payments to someone who purported to be eligible, but ends up in a civil dispute with other occupiers about that eligibility); and
• Having a clear nomination or dispute-resolution mechanism defined in the scheme insofar as individuals are able to recover payments from developers.

 

Outside of RESS, there appears to be little global precedent for near neighbour payments that we have been able to identify, and as such, the practical delivery of this mechanism in NI will be a key area for consideration.

It will be important that further detail is set out in secondary legislation which must clearly delineate the respective roles of generators, electricity suppliers and any central administrative body in providing payments to local residents.

 

Next Steps

As the NI REPG Bill is currently being consulted upon, and details of the scheme rules will follow in subsequent legislation, developers have an opportunity to lobby for the changes that they want to see at either this primary stage, or when secondary legislation is consulted upon, to avoid significant administrative or legal burdens. There is also a potential concern that generators would be held liable and exposed to claims where they fail to identify an eligible person, incorrectly assess eligibility or make payment to the wrong recipient.

 

The Committee for the Economy is currently seeking views from stakeholders on the objectives, proposals and potential consequences of the Bill, and has published a survey here: Renewable Electricity Generation Bill – Northern Ireland Assembly – Citizen Space, which will remain open until 21 October 2026.

 

We will be watching closely for next steps, and will keep our clients and contacts in the renewables sector updated on any future developments.

 

For legal guidance and advice regarding navigating the new legislative framework, preparing for the REPG auction, assessing eligibility, or advising on wider energy matters, please contact Andrew Kirke, Charlotte Gourley or a member of the Energy team.

 

Relevant Links

The Renewable Electricity Generation Bill Renewable Electricity Generation Bill

Final Scheme Design for Renewable Electricity Support Scheme for Northern Ireland Final Scheme Design for a renewable electricity support scheme for Northern Ireland – Renewable Electricity Price Guarantee – (REPG)

Department for the Economy ‘Archibald introduces landmark Renewable Electricity Generation Bill’ Archibald introduces landmark Renewable Electricity Generation Bill | Department for the Economy

While great care has been taken in the preparation of the content of this article, it does not purport to be a comprehensive statement of the relevant law and full professional advice should be taken before any action is taken in reliance on any item covered.