Renewables Obligation Order (Northern Ireland) 2006

Explanatory Note

(This note is not part of the Order)

This Order is made under Article 52 of the Energy (Northern Ireland) Order 2003 and imposes an obligation (“the renewables obligation”) on all electricity suppliers, who are licensed under the Electricity (Northern Ireland) Order 1992, to supply to customers in Northern Ireland specified amounts of electricity generated from renewable sources. As alternatives, in respect of all or part of an electricity supplier’s renewables obligation, an electricity supplier is permitted to provide evidence that other licensed electricity suppliers have supplied electricity generated using renewable sources instead of it or to make a payment to the Northern Ireland Authority for Energy Regulation (“the Authority”). Renewable sources include sources of energy such as wind, water, solar and biomass.

The Order revokes and replaces, with amendments, the Renewables Obligation Order (Northern Ireland) 2005 (“the 2005 Order”). The structure of the Order is different from the structure of the 2005 Order and some of the longer and more complex provisions of the 2005 Order have been split out into separate articles in this Order.

In content, the provisions of this Order are similar to those of the 2005 Order; however, new provisions have been added relating to the calculation of NIROC eligibility for electricity generated by combined heat and power generating stations which are fuelled wholly or partly by waste (Article 7(1)(c) and 9(6)).

The new provisions of the Order also modify the existing provisions relating to the procedure to be followed by the Authority in issuing NIROCs, with the aim of introducing additional flexibility in that procedure (Article 4(3) to (6)). This is achieved by allowing the Authority discretion in deciding whether to accept revisions to the figures used in calculating the number of NIROCs which the station is entitled to, where such revisions are made after the deadline set in the Order.

Provisions have also been inserted into the Order detailing a preliminary accreditation procedure (Article 27). An application for preliminary accreditation is made to the Authority by a person proposing to operate or construct a generating station before the station has been commissioned. The Authority may grant preliminary accreditation if the proposed generating station would be capable of generating electricity from eligible renewable sources as defined in Article 5 of the Order. The Order sets out the circumstances in which the Authority may refuse to grant accreditation once preliminary accreditation has been granted.

Article 2 contains the interpretation provisions for the Order

Article 3 imposes the renewables obligation on electricity suppliers. The renewables obligation requires the electricity supplier to produce evidence of the supply of electricity generated from renewable sources to the Authority. The evidence required is in the form of certificates issued by the Authority (and which are referred to in the Order as “NIROCs”).

Article 4 and Schedule 2 provide for how the amount of an electricity supplier’s renewables obligation is to be determined.

Articles 5 to 9 and 13 determine what types of electricity generated from renewable sources are eligible to satisfy an electricity supplier’s renewables obligation.

Article 10 relates to arrangements whereby electricity generated by a generating station is sold to an electricity supplier and then purchased back by the operator of the generating station.

Article 11 provides that, instead of producing NIROCs to the Authority, an electricity supplier may discharge (in whole or part) its renewables obligation by making a payment to the Authority.

Article 12 provides for suppliers to discharge their renewables obligation by tendering eligible GBROCs – ie Renewable Obligation Certificates issued by the Gas and Electricity Markets Authority (“GEMA”) under the GB Renewables Obligation Orders. Schedule 1 outlines the conditions governing GBROC eligibility.

Articles 14 to 16, 18, 19 and Schedule 3 provide for the issue of NIROCs by the Authority and the maintenance by it of a register of NIROCs.

Article 17 provides for NIROCs issued in respect of electricity generated under Northern Ireland Non-Fossil Fuel Arrangements to be issued by reference to financial bids with the person making the highest bid being the person to whom the NIROCs are to be issued.

Article 20 provides for the revocation of NIROCs in specified circumstances.

Article 21 contains special arrangements enabling generating stations with a declared net capacity of 50 kilowatts or less to be able to claim NIROCs on an annual rather than monthly basis.

Article 22 provides how payments made to the Authority by electricity suppliers under Article 11 are to be divided amongst those electricity suppliers subject to the renewables obligations in Great Britain and in Northern Ireland.

Article 23 provides for an electricity supplier to be treated as having discharged its renewables obligation by making a late payment in accordance with that Article. The late payment must be made during a specified period and is subject to a surcharge which rises on a daily basis. If a supplier only makes a partial late payment the remaining part of its renewables obligation not covered by the partial late payment, remains outstanding and the supplier is still in default of its renewables obligation.

Article 24 provides for the Authority to obtain information to enable it to carry out its functions under the Order.

Article 25 provides for the exchange of information between the Authority and the GEMA relating to GBROCs produced to the Authority under Article 3 and NIROCs produced to GEMA under the GB Renewables Obligation Orders.

Article 26 makes provision relating to the functions of the Authority under the Order.

Article 27 provides for the preliminary accreditation and accreditation of generating stations. In order to be eligible to claim NIROCs in respect of electricity generated from renewable sources, a generating station must have obtained accreditation from the Authority.

Article 28 revokes the 2005 Order and provides for savings in respect of the obligations of each electricity supplier to produce evidence and other information in respect of the renewables obligation, or make payments to the Authority, and to furnish information to DETI and DTI, in respect of periods prior to the coming into force of this Order.

This Order re-enacts the provisions of the 2005 Order which gave effect to Article 3.1 of the European Directive on the promotion of electricity produced from renewable energy sources in the internal market (Directive 2001/77/EC) [O.J. No.L283/33 27.10.2001].