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United Kingdom

BIDS IN FOR NEXT ROUND OF NORTHERN IRELAND CONTRACTS

Thirty-nine wind project proposals are competing for contracts in Northern Ireland's second round of support for renewable energy. They are among a total of 95 renewable proposals which met the end of September deadline for the province's latest Non-Fossil Fuel Obligation (NI-NFFO). This is Northern Ireland's second step towards a goal of 45 MW from renewable energy by the year 2005.

Applicants are in the dark over just how much capacity will be contracted for. Northern Ireland's Department of Economic Development (DED) has stated that the size of this order will depend entirely on the quality and prices of the bids received. What is certain, however, is that with bids for some 170 MW of capacity from wind energy alone, the order is massively oversubscribed. The DED's James McEldowney denies that developers are bidding in the dark. He points out that they are already aware of the prices achieved in the rest of the UK under last year's NFFO-3 and Scotland renewables orders. So they know what they are up against in the next Northern Ireland NFFO, he says. Clearly, the object is to achieve price convergence.

Wind is competing against hydro, biofuels, landfill gas, waste incineration and tidal stream technologies. However, any hopes for a repeat of its performance under the previous round, when wind scooped over 80% of the contracted capacity of 15.6 MW DNC, are doomed from the start. Economy minister Baroness Denton warned last year that the amount of wind would be limited. The aim is to maintain a balanced portfolio of renewables, she said. The DED is keen this time to encourage energy from waste schemes.

The decision to single out wind in particular for capping is surprising in view of the successful performance to date of the six schemes which were awarded contracts under the first NI-NFFO. All have received planning permission. Three wind farms -- developed by B9 Energy in conjunction with Renewable Energy Systems (RES) of England and owned by Scottish Power -- are fully operational. Two more -- owned by the Sean Quinn Group and UK utility PowerGen -- are in the final stages of commissioning, while the contract for turbines is yet to be awarded for Zond UK's wind farm at Owenreagh in County Tyrone, granted planning consent only in September. Zond, the UK daughter of Zond Systems of California, hopes the project will be completed in spring 1996.

B9 Energy has been expanding its expertise into other forms of renewable energy in anticipation of NI-NFFO2. We have put in 15 bids covering a range of technologies, says B9's Michael Harper. These are wind, biomass and wave energy. The company is involved with eight wind bids ranging from small scale projects of less than 1 MW up to wind farms of 5 MW. Another major contender for contracts is Zond which has submitted six bids -- all for 5 MW.

xPayments to renewable generators will reflect seasonal and daily variations in the value of electricity with rewards for supplies during winter peaks in demand. This payment principle was adopted for the first NI-NFFO, but is not repeated in other renewables obligations elsewhere in the UK. Another feature unique to the NI-NFFO is a generation cap, to be imposed for the first time. Under this cap a fixed amount of output -- set at 75% of full capacity -- will be bought at the premium price with any excess paid at £0.025/kWh, taken to be the marginal price of electricity.

The next stage will be when Northern Ireland Electricity provides connection cost quotes next month. Applicants for NI NFFO 2 contracts will then have to tender their priced bids by January 31. The DED expects to award contracts at the end of March 1996.

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