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United Kingdom

United Kingdom

Premium payments for new projects

Customers in Northern Ireland will be able to support new renewable energy by buying their power through a green tariff scheme launched by Northern Ireland Electricity (NIE). The Eco-Energy tariff will be linked directly with new renewable contracts, rather than depending on existing renewable generation or on output already supported under the Northern Ireland Non-Fossil Fuel Obligation, claims NIE. The new green power will cost customers a surcharge of 15%, a larger premium than for other green tariff arrangements in the UK. It will add an extra £0.0125/kWh on the price of domestic electricity, which is already higher than power prices in mainland Britain, resulting in a green tariff of up to £0.097/kWh. Customers will be able to buy 10%, 50%, or all of their electricity at the green tariff rate.

The premium collected will be amassed into an independent trust fund overseen by a group of trustees drawn from environmentalists, customers and academics. The fund, to which NIE will also contribute, will be used initially to publicise the tariff and raise public awareness. When a new renewable energy plant is ready to generate, the premium will be used to support it directly. As demand continues to grow beyond the contracted amount, the premium will again be used to raise awareness until further contracts can be arranged.

"For as little as eight pence every week, customers can make a very real and positive contribution to protecting the environment," says Alan Gaston from NIE Supply. "We also hope that this extension to our product range, which is a direct response to customer demand, enhances the developing market for renewable power generation."

The green tariff is endorsed by Northern Ireland power regulator Douglas McIldoon, Friends of the Earth and wind energy developer B9 Energy. "This initiative represents a truly significant step for renewable energy," says B9's Michael Harper. "For the first time new capacity is to be built specifically in response to individual householders who are concerned about the environment."

It was McIldoon who first set NIE on the road towards giving its customers the chance to choose renewable energy, when in 1996 he proposed a green tariff. Today, McIldoon -- the "greenest" of the UK regulators -- says that more can be done to green energy policy in the province further. One idea he puts forward is to build into NIE's price controls a greater incentive to promote energy efficiency and carbon free energy than to distribute and sell fossil fuel electricity. This proposal will be included in a consultation paper to be published shortly, McIldoon says.

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