An Economic Review of Small-Scale Wind in Northern Ireland

An Economic Review of Small-Scale Wind in Northern Ireland

An independent economic review of small-scale wind in Northern Ireland that has found that an average small-scale wind turbine costs the individual consumer just 1pence over its 20 year lifespan. A cost which is partially offset by reductions in the wholesale electricity price and other wider economic benefits including increased employment and reductions in carbon emissions.

Carried out by KPMG on behalf of RenewableNI, the report ‘An Economic Review of Small Scale Wind, examines the socio-economic impact of small-scale wind including costs to the consumer. It also reviews government support for the sector and evolution of support schemes including the NI Renewable Obligation (NIRO), as well as de-rated turbines and expected average rate of returns for operators.

The review comes on the back of a report released by the Northern Ireland Audit Office last year which examined the NIRO but did not have access to commercial data.

The KPMG report found that the average small-scale wind turbine is expected to achieve an annual return (IRR) of [9.7%] which is broadly in line with the Government’s target return of 10.2%. The annual cost of the NIRO to each NI consumer in 2019 was £31 and remains below the level forecast (£33) when the enhanced support for small-scale wind was introduced in 2009.

Key findings in ‘An Economic Review of Small-Scale Wind in Northern Ireland’ show that the sector contributes £45 million per year to the economy and has created 500 jobs, while also reducing the import costs for non-renewable fuels by £7million per year and can power c.88,000 NI homes annually.
Welcoming the report, Steven Agnew, Head of RenewableNI said;

“2021 is a strategically important year for the renewables sector as we look forward to the publication of an energy strategy that will help us reach our decarbonisation targets, while also creating growth opportunities. It is therefore important to recognise the real value of the small-scale wind sector which, as this report shows, has far reaching positive benefits.”

“There has been a misconception recently about the value of small-scale wind locally and the impact of the NIRO scheme. 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.

“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 NI consumer.

“The renewable electricity industry as a whole stands ready to invest in Northern Ireland and power the green recovery that is needed as we tackle the twin Covid and climate crises. Setting an 80% target for renewable electricity generation by 2030 for instance could create over £1billion of direct investment in NI over the next decade, while also savings 3.5 million tonnes of CO2 equivalent.”

Farm Energy NI are members of Renewable NI and their Small-Scale Working Group. Along with other companies working within the renewable sector, we contributed to this report on behalf of our own members.

Link to the Report An Economic Review of Small Scale Wind