Closure of The Northern Ireland Renewables Obligation (NIRO) on 31 March – Can your renewables project avail of a grace period?

Government incentives for renewable energy have been something of a hot potato in Northern Ireland politically over the past months, but whilst the Renewable Heat Incentive (RHI), and issues around the management of that scheme, have dominated the headlines, the main government support mechanism for renewable technologies, the NIRO, is closing to non-wind technologies on 1 April 2017.

Under the Renewables Obligation Closure Order (Northern Ireland) 2015, there is an exemption to the general closure in the form of certain “grace periods”, the most significant of which for most local generators will be the grace period for renewable generating stations that were scheduled to commission on or before 31 March 2017, but were unable to do so because of grid and/or radar connection delays outside the control of the generator (namely, those within NIE control).

The 2015 Order clarifies that evidence must be submitted alongside the application for accreditation, including:

  • evidence of an accepted agreement with NIE to carry out grid works;
  • a copy of a document from NIE confirming that at the date of receipt of the connection application for the generating station, it was NIE’s intention to complete the works no later than 31 March 2017;
  • a letter from NIE confirming that (i) the relevant grid works were completed after 31 March 2017, and (ii) in NIE’s opinion, the failure to complete the relevant grid works on or before 31 March was outside the control of the generator and was not due to any breach by it of any agreement with NIE; and
  • a declaration by the generator that, to the best of its knowledge and belief, the station would have been commissioned on or before 31 March 2017 if the relevant grid works had been completed on or before that date.

On a plain reading, this clearly shows that the project must have been in a position where commissioning would have been possible, but for delay by NIE, on or before 31 March 2017.

We are in something of a test period here, so it is not entirely clear what NIE will be able, or willing, to provide in the form of a grace period letter to potentially affected generators, and to what extent Ofgem (the government body responsible for managing the implementation of NIRO) will interrogate the terms of any such letter, or any declaration made by affected generators.

Ofgem has recently published a draft guidance note on closure of the NIRO to non-wind technologies and is running a workshop in Belfast on closure of the NIRO on the 24 January 2017, free tickets for which are available through its website.

Those in the industry would be well advised to attend, and try to familiarise themselves with Ofgem’s requirements practically, as well as the requirements of the 2015 Order, if they are hoping to rely on obtaining a grace period to ensure the financial viability of their pipeline renewables projects.

If you have any queries around the legislation, or the potential eligibility of your renewable scheme for NIRO accreditation, please contact Andrew Kirke
on 028 9055 3306, or at Andrew.Kirke@tughans.com

 

 

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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.