McGrigors: ROC re-banding
Richard Murphy of McGrigors LLP discusses the mood in the market with the ROC Re-banding proposals for Northern Ireland.
Hot on the heels of the ROC re-banding consultations in Great Britain, the recently published Department of Enterprise, Trade and Investment (DETI) ROC banding consultation has met with a broadly positive response in the local market.
Whilst the document is still only consultative at the time of writing this article, it does provide specific insights into a transitional regime for UK renewables, starting in April 2012 and ending in March 2017. During this period the multiples of ROCs, or bands which producers benefit from, have been tweaked.
For the majority of technologies, DETI proposes to remain consistent with the proposals in Great Britain.
The few instances where Northern Ireland proposes to differ from the rest of the United Kingdom include continued support for landfill gas at 1 ROC/MWh to 2015 and, in the absence of a feed-in-tariff for small-scale projects in Northern Ireland (up to 5 MW), continued enhanced support for small-scale technologies including onshore wind, anaerobic digestion and solar under the NIRO.
The key changes to the ROC system are that onshore wind will drop from 1 to 0.9 ROCs while offshore wind is going to have a phased drop of 0.1 ROCs per annum from April 2015, down to 1.9 ROCs for 2015-16 and 1.8 in 2016-17. Not the 0.5 slash to incentives feared.
Marine energy has received a big boost with wave energy receiving a hike from 2 ROCs to 5 ROCs for projects up to a 30 MW cap, while for facilities above that cap it will be 2 ROCs.
Tidal – which is currently 2 ROCs for all technologies – has a range of options with tidal stream having the same incentives in place as has been proposed for wave energy.
Across the board for different technologies, there is a slight drop in ROCs for waste-related and solar energy (above 5 MW) alongside broadly continued support for biomass.
Gary Connolly, Chairman of the Northern Ireland Renewables Industry Group (NIRIG), says: “The measures to support wave and tidal energy are particularly welcome and will help build a domestic market big enough to drive innovation and lower cost.
“Onshore wind is already the least expensive form of renewable energy on a mass scale and is currently providing the largest share of renewable electricity. These measures must not put its future deployment in doubt.”
The mood in the market is fairly positive with most saying that they had expected onshore wind to be more heavily impacted than by the loss of just 0.1 ROC. As to offshore wind, the consensus seems to be that the fall in the number of ROCs over the coming years matches what industry believes will be the fall in capex as the sector matures.
As to the marine energy sector, B9 Offshore Developments – which is developing the Thetis tidal scheme at Torr Head in Northern Ireland – Managing Director Michael Harper welcomed the news as a great boost for the local industry.
Harper says: “By proposing to move the ROC banding in Northern Ireland into line with the current level of 5 ROCs for wave in Scotland, DETI has given a positive signal which will incentivise inward investment in what has the potential to be a world-leading, high growth success story for Northern Ireland.”
For more information on the new banding levels proposed for Northern Ireland, please visit our website to access a recent market briefing: www.mcgrigors.com/e-bulletin/energy/eb-2011-10-31.html or contact Richard Murphy (Director, Head of Energy Group in Belfast) on
+44 (0) 28 9089 4844 or by Email at richard.murphy@mcgrigors.com
