Official Report: Minutes of Evidence

The Chairperson (Mr Brett): I welcome the officials from the Department for the Economy and invite them to give their evidence to the Committee.

Ms Zoë Crowe (Department for the Economy): Good afternoon, Chair and Committee members. Thank you for the opportunity to speak to you today about the proposed amendment to the Renewables Obligation Order (Northern Ireland) 2009. I am the Department's head of onshore renewable electricity, and I am joined by Colm McCullagh, who deals with Northern Ireland renewables obligation (NIRO) policy on our team.

The NIRO scheme has incentivised renewable electricity generation here since 2005 through a UK-wide system of tradable green certificates called "renewables obligation certificates" (ROCs). Three separate but complementary renewables obligation schemes cover the UK, with Ofgem acting as the administrator for all three. We have the NIRO in Northern Ireland and the renewables obligation (RO) scheme in England and Wales, while Scotland has the renewables obligation Scotland (ROS). All three schemes use the retail prices index (RPI) as the measure of inflation. However, RPI is now considered a flawed measure. The UK Statistics Authority has removed RPI's designation as a national statistic, and it will be discontinued from February 2030.

The joint Governments' consultation was issued in October 2025, seeking views and proposing options to change how the buyout price of the RO schemes is adjusted for inflation. The response to the consultation was published in January 2026 and confirmed a proposal to move from RPI to the consumer prices index (CPI) as a measure of inflation across all three schemes from April 2026. The proposed amendment — the Renewables Obligation (Amendment) Order (Northern Ireland) 2026 — is now required in order to enable that change.

Equivalent amendments to the renewables obligation scheme in England and Wales and the renewables obligation Scotland scheme are being made concurrently. The proposed amendment has been consulted on, and the relevant impact assessments have been completed. The draft statutory rule (SR) is required to follow the draft affirmative procedure and will require an Assembly debate and consideration before enactment.

In summary, making the changes to the way that the RO schemes are adjusted for inflation will bring the schemes into line with best practice and maintain regulatory parity, as well as reducing overall scheme costs while maintaining fair payments to the accredited generators.

Thank you for your time. We are happy to answer any of your questions.

The Chairperson (Mr Brett): Thank you very much, Zoë. Do members have any questions?

Mr Buckley: Thank you very much, Zoë. In theory, the amendment regularises the schemes across the UK, in England, Scotland and Wales. What costs were associated with option 2 in the consultation?

Ms Crowe: Costs to —?

Mr Buckley: The cost to the public purse of freezing the buyout price and applying the CPI to a shadow price from 2022. What is the cost differential between options 1 and 2?

Ms Crowe: I do not have those figures because they are modelled, and there are so many variables in the cost. The consultation and the information provided clearly showed the potential negative impacts of option 2.

Mr Buckley: What was that?

Ms Crowe: The potential negative impacts of option 2. Option 1 allowed us to support affordability while retaining an inflation linkage. Hopefully, that strengthens investor confidence as well as allowing us to apply an accepted measure.

Mr Buckley: Did the consultation responses largely indicate which of those options the respondents wanted to pursue?

Ms Crowe: The majority of respondents were hesitant about both options, because both have an impact. However, there was a clear differential on option 2, which was the much less preferred option.

Mr Buckley: OK, thank you.

The Chairperson (Mr Brett): Members have no further questions. Thank you very much, Zoë.