Steve Agnew: Small scale wind benefits the consumer and economy
Twenty twenty one is a strategically important year for the renewables sector as we look forward to publication of an energy strategy that will help us reach our decarbonisation targets, while also creating growth opportunities.
With almost half of our electricity being generated by renewables, the sector has been a real success story for Northern Ireland.
However, a lack of renewables focused public policy has meant that investment has contracted in recent years. It is therefore vital to understand the real impact of the small-scale wind sector, both financially and environmentally to capitalise on and expand success to date.
There has been a misconception recently about the benefit of small-scale wind locally and the impact of the Northern Ireland Renewables Obligation (NIRO) scheme. A recent independent report — ‘An Economic Review of Small-Scale Wind in Northern Ireland’ — carried out by KPMG on behalf of RenewableNI, has meticulously examined the socio-economic impact of small-scale wind including, costs to the consumer.
Its findings are based on actual costs of small-scale wind assets in NI, which were cross referenced against publicly available information, with a randomised pool of projects also audited to validate findings.
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This review reveals an average small-scale wind turbine costs the individual consumer just one pence 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.
The KPMG report also 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%.
This puts to bed the suggestion in the October 2020 Northern Ireland Audio Office report — which did not have access to commercial data — that estimated small scale turbines could potentially achieve returns on investment in excess of 20%.
KPMG’s findings reveal not only the true cost to consumers of the small scale wind sector but also that it is worth £45m per year to our economy, has created over 500 jobs and has delivered significant benefits to the environment.
It is worth noting that the target of 40% renewable electricity was well exceeded at a lower cost than was initially envisaged.
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 could leverage over £1 billion of direct investment in NI over the next decade, while saving 3.5 million tonnes of CO2 equivalent.
Our research shows that 9 million tonnes of CO2 were saved in NI over the last two decades, thanks to wind energy alone. Given the UK’s 2050 net zero ambition it is clear that power generation has a critical role to play in achieving this target.
RenewableNI believes we should aim to fully decarbonise the electricity sector by 2040 with 80% by 2030 being a key milestone on that journey.
The onus therefore must be on creating a cohesive energy strategy and public policy that harnesses the opportunities renewables presents both now as part of the green recovery, and in the future.
We have an unparalleled opportunity to make the necessary environmental improvements for all our futures. We cannot let it pass.
• Steven Agnew is head of RenewableNI
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