Official Report: Minutes of Evidence

The Chairperson (Mr Brett): We invite our friends and colleagues from the Department to come forward.

The Renewable Electricity Generation Bill was introduced to the Northern Ireland Assembly on 30 June 2026. The Committee agreed to launch the call for evidence on the Bill on 1 July, prior to Second Stage. In order to inform the Committee's understanding of the Bill, the Committee will now receive a departmental briefing on it. Members' packs include the Bill, the explanatory and financial memorandum (EFM), the equality screening document, the delegated powers memorandum and responses to the call for evidence. I hand over to you now, Jimmy.

Mr Jimmy Graham (Department for the Economy): Thank you, Chair. Chair and members of the Committee, good morning, and thank you for the opportunity to speak to you about the Renewable Electricity Generation Bill. I will give a brief overview of the contents of the Bill, its practical effect and the key provisions that may assist the Committee through its scrutiny process.

The aim of the Renewable Electricity Generation Bill is to give the legal framework for the renewable electricity price guarantee (REPG) scheme. Through contracts for difference, the scheme will provide greater price certainty for renewable electricity generators and help to protect consumers from volatile fossil fuel prices. It is important to note that this is an enabling Bill: the detailed roles and operating requirements will be set out through subordinate legislation before any auction will take place. That will allow auctions to be launched when the time is right, taking into account grid and system readiness, affordability and value for consumers.

The Bill contains 22 clauses and 2 schedules. Collectively, they enable powers for the Department to run competitive allocation rounds; designate a counterparty to enter into contracts with generators; establish a supplier obligation to fund the scheme; and require generators to make payments to those living in the vicinity of REPG-supported projects, which is intended to ensure that communities living closest to new renewable electricity generation infrastructure see a direct and visible benefit from the scheme. The detailed eligibility criteria and operating arrangements will then be set out through the subordinate legislation.

As for the next steps, the Bill was provisionally scheduled for Second Stage next week, on 8 September, and, pending Assembly approval through to gaining Royal Assent, subordinate regulations can then be progressed. Once those receive approval, an auction could then take place.

Chair and Committee members, we recognise the Committee's interest in ensuring that delivery moves at pace. I emphasise the fact that it is a substantial and technically complex scheme with multiple interdependent work streams across legislation — the counterparty arrangements, the supplier obligation and the community benefit provisions — as well as considerations about enabling infrastructure readiness and affordability. The time invested to date has been necessary to get it right. Our focus has been on developing a framework that is robust, deliverable and investable. Just as importantly, it puts consumers at its heart while creating the conditions needed to progress Northern Ireland's renewable electricity targets.

We are happy to take your questions on any aspect of the Bill or the scheme and to support the Committee through its scrutiny process.

The Chairperson (Mr Brett): I thank each and every one of you for your work on that. It is important, first of all, that the public understand that the Committee was previously told that the Bill was not required. You talked about readiness, preparedness and trying to get this moving. However, when I asked the question a number of years ago when this issue was on the Minister's priority list, I was told that primary legislation was not required for it to take place. Notwithstanding the hard work that the Department has done to date, it is important to recognise that the delay lies squarely at the Department's feet and that we were told that primary legislation was not required.

Now that it is clear that primary legislation is required, we welcome the fact that it is where it is, but this is only an enabling Bill. The real work will be in the terms and conditions that will allow the first auction to take place. If I picked you up correctly, Jimmy, you said that work on the terms and conditions will not start until the Bill has completed its legislative process and received Royal Assent. Did I pick you up incorrectly?

Mr Graham: I will go back to your first point, Chair, if that is OK, which was on the need to have a Bill. At the very beginning of the process, we investigated every possible avenue, including whether existing primary legislation here or legislation from Westminster could be used to develop the scheme. The good thing about having primary legislation here, even though we have invested significant work to get to this stage, is that it gives Northern Ireland control of its destiny: it gives us control of the allocation rounds, the supplier obligation and the community benefit aspects. That is a positive of the scheme.

Work is already ongoing on the terms and conditions, as well as on the other elements of the scheme, which will go into regulations via subordinate legislation.

The Chairperson (Mr Brett): When will that be completed?

Mr Graham: It took significant work and was a significant milestone to get the Bill to the Assembly. Through that process, we found that it would be better for stakeholders if we were to consult on all the financial elements of the scheme as one package, rather than on the terms and conditions alone. That will give the public and the Committee the opportunity to scrutinise the key financial elements of the scheme. That is what we are working on now that the Bill has been produced.

The Chairperson (Mr Brett): OK. When will that be completed?

Mr Graham: We hope to be able to consult the public on the revised scheme in the first part of 2027.

The Chairperson (Mr Brett): On the entire financial package?

Mr Graham: Yes.

The Chairperson (Mr Brett): With that in mind, what is the new projected date for the first auction by the Department?

Mr Graham: Throughout this year, we have consistently said that we will publish the date of the first auction alongside the consultation on the terms and conditions. That is still our position. More analysis of the grid, the system readiness and the affordability is required, as well as all the preparation that it has taken to get the scheme ready, to allow us to have that first auction.

The Chairperson (Mr Brett): It will not be in 2027, then.

Mr Graham: On the basis of where we are now, it would be very optimistic to say that there will be an auction in 2027.

The Chairperson (Mr Brett): Will it be in 2028?

Mr Graham: That will depend on our analysis of the grid and the system readiness. The size of the auction will also depend on that.

The Chairperson (Mr Brett): The Bill gives the Department sweeping regulation-making powers in relation to not only community benefit but contracts for difference and the supplier levy. What safeguards for consumers and producers will be in place to ensure that those powers will be subject to democratic scrutiny?

Mr Graham: We are working through the detail of what the powers will look like and what the regulations will be. In essence, the scheme is a two-way contracts for difference scheme. That provides certainty for renewable electricity developers to invest in Northern Ireland, and, importantly, it will protect consumers when wholesale electricity prices are high. The generators will be offered a fixed strike price throughout a 15-year contract: that is the protection. More detail on protections will be built into the regulations.

The Chairperson (Mr Brett): I have two final questions. Has there been any early engagement with our friends and neighbours in the European Union to indicate that there will not be protracted discussions in relation to state aid rules?

Ms Zoë Crowe (Department for the Economy): We have been engaging with the Commission indirectly through our subsidy control unit team in the Department, which is reaching out to see whether we can engage in those early discussions. The lessons that we learned from our colleagues in Dublin about their recent and original applications relating to the renewable energy support scheme will allow us to move through the process more smoothly. Any engagement will have to connect through the Cabinet Office, so we have also been working out how to get the right people into the room to move that forward. The initial conversations are happening, certainly.

The Chairperson (Mr Brett): The European Union is renowned for many things, but moving at pace is not one of them. I am concerned that, while the Department has invested a huge amount of time in developing this and will continue to do so in the coming months, getting final approval from the European Commission might ultimately prove to be a barrier. Consumers here are waiting, and investors will also be watching. I encourage you — obviously, as a Committee, we will do anything that we can — to ensure that the European Union engages early in the process.

My final question is about community benefit. The Minister has a clear vision of what she wants that to be, but the Bill says that the Department "may" make regulations rather than that it "must" do so. Is there a concern about the Minister's achieving what she hopes for in community benefit? It is clearly important, but, given that suppliers in other parts of these islands are already voluntarily entering into these agreements and communities are benefiting from them, have we tested that what the Minister wants to do is legally competent and can be delivered?

Mr Graham: When it comes to the locking of the price, since I was previously at the Committee talking about the publication of the final scheme design and approval through the Executive, we have had to do further policy work. Community benefit is a high-level aspiration. We looked at a few options to deliver community benefit through electricity suppliers and through discounts, but the policy decision is that generators will be required to make payments directly to households. That is where we are going with the regulation, which the Committee will have the opportunity to scrutinise to ensure that it is fit for purpose for communities across Northern Ireland. That is absolutely the purpose of the regulation-making power.

The Chairperson (Mr Brett): You are confident in your evidence that that proposal — the Minister's policy preference — is legally competent?

Mr Graham: This happens today. Developers do it voluntarily, delivering direct —.

The Chairperson (Mr Brett): Are you saying that it is legally competent that it is legally required to be done?

Mr Graham: It will be in the regulations: that is how it will take legal effect and become mandatory for the generators to —.

The Chairperson (Mr Brett): And you have tested that, legally, that it is —.

Mr Graham: It will be in the regulations: that is how we will provide for the power to do it. The scheme will be mandatory.

The Chairperson (Mr Brett): If it is mandatory, why does it say, "The Department may make regulations"?

Ms Crowe: The language that is used in the Bill is also to facilitate the future-proofing that we are looking at. Again, I am speaking off the top of my head, but, if for example, we were moving towards offshore for a future auction, living within the vicinity of offshore would need to be clearly defined. The language is normal with our drafters. It was part of the engagement process. It is not to take away from any requirement in it. It is just to facilitate that we may make those powers and utilise them as we see fit into the future. That is the thought behind that.

Ms D Armstrong: Good morning to the panel. Thank you for coming in. I think that the Chair has covered what I was going to ask. Given the debacle with the renewable heat incentive and where we are now with the new scheme and new Bill, I am seeking a reassurance from the panel on how the Department intends to make regulations to ensure meaningful scrutiny of the key policy decisions, such as the strike price, the eligibility criteria and the allocation round design, to give confidence that the scrutiny will be there in the Assembly.

Mr Graham: Those key requirements will be part of the regulations. We will be approaching the majority of those with draft affirmative procedure, so the Assembly will have the opportunity to scrutinise those, yes.

Ms D Armstrong: Thank you. My second question is on the grid capacity. is there a risk that, if increasing numbers of renewable projects are brought forward through contracts for difference before the necessary grid reinforcements are in place, the generators will face increasing levels of curtailment and constraint? What measures have you in place to mitigate that?

Mr Graham: Yes. We are acutely aware of the current levels of dispatch down. The renewable energy price guarantee is one piece of delivering additional renewable capacity, and it is not a linear plan. A lot of work is going on in parallel to ensure that the grid is ready and we are working through the processes to bring on new renewable electricity capacity. When we get to the stage of a first auction, we will review grid system readiness and affordability considerations before deciding what the procurement volume should be. I will hand over to my colleague Rachel to add some more to that element.

Ms Rachel Sankannawar (Department for the Economy): A key part of looking at new renewables integration in Northern Ireland and helping to meet our climate objectives, as well as energy security objectives, is looking at this as a road map. The first part of that road map is to maximise the electricity that we already have access to and already have invested in. As you will be aware, dispatch down has sat between 20% and 30%. That is a concerning figure, and we are very aware of it. The first part of the road map is to maximise that renewable electricity before we ask consumers to underpin the next wave of generation. Key things that are taking place as part of that particular pillar are highlighted in the System Operator for Northern Ireland's (SONI) dispatch down action plan, and I will draw on a few examples. Some of that will include, for instance, enabling wind generation to provide downward reserves. That is giving renewables a bigger role in balancing the system. It is also to do with making sure that there is more renewable electricity that can flow through the system safely. That is where SONI is reviewing its operational standards around security and trying to make sure that there is more renewable electricity flowing through the wires in Northern Ireland.

It is then about reducing the number of conventional generators that must remain online. Historically, we had a grid that was built with three large power stations designed to push power in one way. We have then brought on board over 1,000 onshore wind installations and over 32,000 solar installations. That has changed the power dynamic quite significantly, but SONI has run trials and has now changed the set from a three-set rule to a two-set rule. That is, again, chunking away at the amount of fossil fuels that we are using in the system to free up capacity for renewables. Another piece of that jigsaw puzzle is the procurement of low-carbon inertia services. That helps to provide system stability in a way that is lower carbon and does not come from conventional fossil fuels. The first phase of that procurement has been undertaken, and another phase will be forthcoming.

Ms D Armstrong: How confident are you that we can meet the targets for 2030, given the constraints and given the mitigations that need to be in place?

Ms Sankannawar: I will come back and answer your question, but there is something that needs to be understood about the legislative framework in which we operate, as the Department that looks after energy in Northern Ireland. There are a number of frameworks: the Electricity (Northern Ireland) Order 1992, the Energy (Northern Ireland) Order 2003, the Electricity (Single Wholesale Market) (Northern Ireland) Order 2007 and the Climate Change Act (Northern Ireland) 2022. They place obligations on the Department and other actors in the electricity system to operate in a way that places consumers at the heart of the journey, protects security of supply and makes sure that all reasonable demands for electricity can be met. The Climate Change Act then came in and added another important component to that. It is a balancing act between security of supply, affordability, renewables and carbon emissions.

We have come a long way. That is not always recognised, but, from an external point of view, Northern Ireland has done a good job of integrating renewables. That success is probably the cause of some of the next challenges that we are trying to overcome in the wave of generation. Sequencing is really important, which is why we are going through a stepping-stone process of, one, maximising what we already have; two, creating the conditions to bring on new investment; and, three, bringing on new investment when the time is right, at the right price, when the grid is ready and with the right technologies.

The Chairperson (Mr Brett): That was a very good answer, Rachel, but, in fairness, it did not answer the question that Diana asked and that you said that you would go back to. Diana, do you want to repeat the question?

Ms D Armstrong: Yes. Thank you, Chair. How confident are you that we can meet the targets by 2030?

Ms Sankannawar: There are a number of things that could be accelerated if we had access to a lot of extra resources and if things were expedited in the planning system. There are many levers in the Department's control and many outside its control. The Department is bringing through key policies, and the renewable electricity price guarantee is a key part of that. That is not to say that this is not a challenging environment; it is, but we are doing our best to progress the journey while keeping the consumer at the heart of the process.

Ms D Armstrong: OK. Thank you very much. I am not quite sure that we are there yet, but thank you for that.

Mr Kearney: In some ways, this question overlaps with what Diana said and what Phillip touched on earlier. It is essentially to do with departmental capacity. Do the staffing levels and skill sets exist to ensure the production of the regulations and delivery of the targets and outcomes that are envisaged, particularly in relation to addressing community need?

Mr Graham: I will touch on a couple of examples from the renewable electricity price guarantee. A year or so ago, we had responsibility for both the REPG and the offshore side. I was able to get additional resource to help deliver on both those really important plans. That was one element that we have done.

On REPG, we have been able to fill our vacancies. We have more staff coming in over the coming weeks to support the Department in delivering the REPG as well as many other policies across energy group. We are working to fill our vacancies to ensure that we have the capacity and capability to deliver. We are very focused on delivering the community benefit piece of the electricity generation infrastructure to ensure that there is that mandatory benefit here as well. We recognise that we do not have all of the required capability and expertise in the Department, so, throughout the process of developing the REPG, we have brought in technical and commercial capability as and when it was needed. We now also have legal capability on board, which will help us through the subordinate regulation piece. Those people are very much involved in developing community benefit for the REPG.

Mr Kearney: Are the new staff new starts, or are they being transferred from other areas of the Department?

Mr Graham: It is a wide mixture of new starts in the Civil Service and people from across Departments and within the Department, including energy group. There is a wide range.

Mr Kearney: It is not the case, then, that the displacement of personnel from other areas will create gaps as you attempt to service the requirements under this area of work?

Mr Graham: There is always a great difficulty right across the service when it comes to ensuring that there is capacity and capability across a number of areas.

Mr Kearney: Is there a focus on workforce planning to ensure that this particular priority is delivered on?

Mr Graham: We are absolutely doing that in energy group; we are focused on our workforce planning. We have run specific competitions to bring in people. I think that we are one of the few groups within the service that runs specific competitions.

Ms Forsythe: I thank you all for the presentation today. As the Chair said, he was told initially that we did not really need this legislation, so I am just trying to think of the wider context. Earlier in the year, when we had a session with Community Energy NI and the Department, there was a little bit of a disconnect. Community Energy talked about these great projects led by voluntary and community sector organisations that put energy back into running things in the community, such as sports groups, halls and stuff like that, whereas the Department did not seem to be that aware of a lot of the work that was going on that could have been invested in with the wider community energy piece. This feels like it is about the same ethos of getting renewable energy back into communities. What engagement have you had with Community Energy NI about some of the active ongoing successful projects in different communities here in Northern Ireland?

Mr Graham: I will talk first about the REPG and its focus and what we are focused on delivering. We have talked extensively about the targets and the capacity that is required to bring that on. Right from the outset, the renewable electricity price guarantee will deliver much larger projects, which we need to get us to our statutory targets. That is the focus of the scheme. You will be aware of the 5 MW threshold, certainly in our first option. We put that in for a few reasons. The 1 to 5 MW projects make up a small amount — about 2% — of the capacity that we need to meet the 80% target. That is one of the reasons why the focus of the REPG has been on the larger projects. There is a community energy branch within energy group that does more of the engagement on the community energy and the smaller side as well.

Ms Forsythe: You talk about having the legislation and bringing in the regulation because of the bigger targets in order to meet the climate change targets. I am worried about unintended consequences for smaller successful projects. For example, the clause on community benefit, which has been touched on, states that "The Department may make regulations". I am thinking about smaller projects that are already running. Will they be subject to that quite intense regulation piece through this legislation coming in and hitting right across them all? I am trying to understand. As I read that, there are things that are generally in place, and I am trying to think of the wider perspective for projects that I know about that are doing very well.

Mr Graham: I will separate community energy from community benefit. What we will deliver in community benefit will be about local communities and households seeing a direct and visible benefit from the scheme. They will receive a direct payment from the renewable developers that are developing new renewable electricity generation infrastructure in their vicinity. Community energy is a separate matter that is not being addressed specifically through this piece of legislation.

Ms Crowe: The Bill's powers in terms of this obligation will apply only to successful generators in an REPG auction, so anyone operating currently will not be subject to them. You asked about projects being impacted; I can give an assurance that this will not impact on projects that are currently operational. It is just for any new build that has REPG support. They will be required to include this within their operations.

Ms Forsythe: It is good to get clarity, because, as I said, there is a lot of detail and regulation coming through. There does not seem to be a clear definition in the legislation of the contracts for difference piece. Is there any intention to have a little bit more detail around that? It seems vague in the legislation — as if it is waiting for something further to come through. Maybe it will be in the regulations that you are talking about.

Mr Graham: Yes, it will be in the regulations. That is the way the Bill is structured across the piece. That has allowed flexibility according to how the electricity market will evolve over time. The Bill will give powers, hopefully, over the next 25 years, for example, to bring on capacity at the right time, with the right technologies and at the right price. The detail around the strike price, the procurement volumes and the community benefits aspects, for example, will be in the regulations. That is intentional, so that we do not have to keep coming back to amend primary legislation, which we know is resource-intensive across the Assembly.

Ms Forsythe: Declan touched on staffing. How many staff do you foresee working in and around this, going forward?

Mr Graham: How many people are in your team specifically?

Ms Crowe: I should know that off the top of my head. There are five: four currently, and one about to join. We also have admin support.

Ms Forsythe: Is that the full allocation? Are there vacant posts? Is that at full staffing capacity?

Ms Crowe: There is one additional vacancy to be filled, which will, hopefully, come in the coming weeks.

Ms Forsythe: Thank you very much.

The Chairperson (Mr Brett): Jimmy, just one last question. You mentioned offshore a few times. Where are we with the offshore renewable energy installations Bill?

Mr Graham: We were working on the instructions for the offshore renewable energy installations Bill. Realistically, it is unlikely that it will be introduced during this Assembly mandate. We want to be in the position to introduce the Bill in the new mandate. We will be writing to the Committee in the coming days, hopefully, to outline that.

The Chairperson (Mr Brett): So it is now off the Minister's legislative agenda.

Mr Graham: It is, for this mandate. It will be in the next mandate. Again, we will communicate that.

The Chairperson (Mr Brett): Colleagues, thank you for coming to the Committee meeting and for coming back slightly early. We appreciate that. The Committee launched its call for evidence in July because it is keen to try to support you in getting the Bill through as soon as possible. It is clear that there is support across the political divide for the Bill to move forward. Thank you for your time and efforts. We look forward to seeing you again soon.