A New Renewable Energy Support Scheme for Northern Ireland and the role of Planning

In February 2023, the Department for the Economy issued a consultation to gather insights for the development of a Renewable Electricity Support Scheme (RESS) in Northern Ireland to meet with the target region's goal for 80% of electricity consumption from renewable sources by 2030 as set out in The Climate Change Act (Northern Ireland) 2022 (CCA).

In early April 2024, the Department issued its “Proposed High Level Design” on the RESS, and this has been roundly welcomed by the Clean Energy sector in Northern Ireland. And rightly so; the last renewables support scheme in Northern Ireland ended in 2017, and it is probably no surprise that substantial new clean energy development in the region mostly ended with it. Meeting the gulf between the current level of around 45% renewable generation and the 80% target mandated by the CCA in less than 6 years needs a new RESS to drive that increase. That RESS must be acceptable to developers and funders alike, but also protect consumers from significant increases in bills.

This is no short order, and whilst the high-level details of the proposed RESS have been met with enthusiasm, the devil will – as always – be in the subsequent detail to emerge hopefully later this year.

Much commentary is already available on the proposed RESS. In brief summary, the design proposes a Contract for Difference structure that includes a variety of eligible technologies, from onshore wind and solar PV to emerging sources like tidal and wave energy as well as storage infrastructure like BESS. Contract terms have been proposed for 15 years and in terms of a minimum project size, a threshold of 5MW is proposed but may be adjusted based on industry feedback.

The proposal outlines auction years aimed at meeting energy targets by 2030, with the 2025/26 period focusing on procuring projects at advanced stages and about 30% of the energy volumes through ‘Pot 1’. In 2027, the objective shifts to acquiring the remaining 70% of the required energy volumes and increasing the procurement from ‘Pot 2’ to diversify the supply mix.

As the Department now moves towards finalising the scheme, stakeholder feedback is intended to continue into 2024 to shape the final detailed design in preparation for the first auction. This includes crucial decisions on contract lengths, pricing mechanisms, and funding sources; all geared towards establishing what is hoped to be a robust, equitable, and sustainable support scheme for Northern Ireland's renewable energy sector.

Much work is still required to develop the fine detail, and industry engagement is both welcomed by the Department and essential to the success of the scheme. Outside of the RESS design however and outwith the control of the Department for the Economy, there is another significant element that goes to the very heart of the scheme’s success. Perhaps unsurprisingly, that is planning.

One of the key eligibility criteria for entry into both the 2025/26 and 2027 auctions, along with a grid connection, will be a valid planning permission. The Department estimates that the 30% contribution from Auction 1 will be from projects that are already in the planning pipeline. With the best will in the world, as matters currently stand, this seems overly ambitious. The stark fact is that the Northern Ireland planning system struggles to deliver decisions on major infrastructure projects in a timely fashion – and this also assumes that those decisions will be positive.

Both the 2025/26 and 2027 auctions will require a substantial shortening in determination times for planning applications if there are to be a realistic number of development proposals entering into the auction processes. Developers are extremely keen to bring projects forward for both auctions, but on current planning decision times, even 2027 seems ambitious for large scale onshore renewables projects to be determined.

In this context it is notable that in response to the scathing Northern Ireland Audit Office's March 2022 report "Planning in Northern Ireland" and the subsequent views and recommendations from the Public Accounts Committee (PAC), the Department for Infrastructure (DfI) has faced calls for immediate action to address deficiencies within the planning system. In a Memorandum of Response published on 18 April 2024, DfI has accepted and responded to each of the Public Accounts Committee’s 12 recommendations, outlining what steps it has taken and will take to address concerns raised in PAC report.

DfI reports it has already taken steps to address the immediate concerns of the Committee. They have recognised the need for a fundamental review of the planning system and established an interim Regional Planning Commission comprised of independent stakeholders which the Department believes will address the need for cultural shift in planning. This commission had its inaugural meeting in February of 2023 and aims to identify and promote long-term strategic change in the planning system. It is also advising on the Department’s Planning Improvement Programme (PIP), which will have 40 targeted actions, addressing the PAC’s call for immediate, short-term action and expediting the delivery of outcomes within a fixed time frame.

These are of course all welcome actions, but the DfI is only responsible for the relatively small number of “regionally significant” planning applications that are submitted to it, so improvements to the planning system must also cut across to local councils which are currently responsible for determining applications for energy development less than 30MW. Further, both the DfI and local councils are reliant upon the same consultees to advise on specific aspects of applications, and many of these consultees are extremely slow in turning around responses, which adds further delays to application processing times.

To complicate matters further, there is a substantial risk of a disconnect between the objectives of the CCA and the RESS and the Local Development Plan (LDP) system led by each local council. Some new LDPs are already in place and others are well along in the drafting and public examination process. All of the adopted or draft LDPs were designed in light of the current Strategic Planning Policy Statement (SPPS) and broadly follow the policies in the SPPS relating to renewables development. Whilst the Department has proposed changes to clean energy policy in the SPPS, any final changes will need to factor in the requirements of both the CCA 80% target and the needs of the RESS. However, this may come too late to adapt draft LDPs, and those recently adopted are unlikely to be amended any time soon given how long it has taken to bring them to adoption in the first place.

As part of the further design of the RESS, a spatial analysis will be undertaken by the Department for the Economy through 2024 to assess where land is likely to be available for new renewable development. Given the lack of co-ordination between the objectives of the RESS, renewables policy in the SPPS (and any proposed changes), and the LDP adoption process, the spatial analysis may well identify significant limitations in the availability of land for further large-scale renewables development.

The DfI acknowledges the necessity of streamlining the LDP processes and states that this is a major element of the PIP. The Department says it is working collaboratively with councils to expedite plan production and commits itself to capturing and sharing best practices. However, this may be too little too late.

This also assumes that both the local council planning authorities and the DfI are going to start taking a more permissive approach to renewables development, particularly onshore wind. The track record for approvals in recent years (when decisions are issued) has been disappointing to say the least. Perhaps the 80% renewables target and development of the RESS will help to tip the balance in favour of approvals, much in the same way as the previous 40% target and the NIROC subsidy certainly helped get many approvals over the line before 2017.

Notwithstanding the encouraging progress the DfI states it is making through the PIP, what is abundantly clear is that the planning system for renewables development in Northern Ireland needs stellar improvements over a very short period of time. Without this, a well designed RESS that is reliant upon planning permission being in place is almost worthless. This is not an insurmountable challenge, but significant focus and resource will be required, as well as levels of co-operation between Departments not seen previously, to turn the planning system around and meet the huge opportunities and benefits that the new RESS presents for Northern Ireland.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at April 2024. Specific advice should be sought for specific cases. For more information see our terms & conditions.