Renewables Obligation Certificate Scheme

Debate between Angus MacDonald and Jim Shannon

Wednesday 5th March 2025 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

It is a real pleasure to serve under your chairship, Dr Murrison. I thank the hon. Member for South West Norfolk (Terry Jermy) for setting the scene so well. He said he hoped his first debate would be more exciting, but this a practical debate. It is a debate that his constituents want him to focus on, and the reason he has secured it is because he is working on their behalf. I always found that I enjoy this particular type of debate because they really matter to people, and they can relate to them. There has been a focus on constitutional issues, war across the world, and all those things, in this last week—or 10 days, or two weeks, or even the last three years—but people back home in the hon. Member’s constituency will want him to pursue debates such as this one, so well done to him.

The hon. Member outlined the case for the renewables obligation in his introductory speech. I want to give a perspective from Northern Ireland. I am pleased to see the Minister in her place; before the election, she and I often sat on the Opposition Benches, and would have been alongside each other when it comes to asking for things. Today, I will be asking the Minister about some things in relation to discussions about the renewables scheme and the contracts for difference scheme, which we do not have in Northern Ireland.

There is a willingness in the Government approach to renewables, as there should be. It is important to do this as collectively as we can, to ensure that people can get the best value for money in their energy costs, so it is a pleasure to discuss these vital matters, and to consider the whole of the United Kingdom of Great Britain and Northern Ireland in this conversation.

The renewables obligation scheme was introduced in 2002 to incentivise large-scale renewable electricity generation in the United Kingdom. It was phased out or closed in 2017, in favour of the contracts for difference scheme. For me, that is the key issue, because currently the CfD scheme does not apply to Northern Ireland, although before the election I tried to encourage the previous Government to extend it. I know that this is a devolved matter, but will the Minister please initiate some conversations with the relevant Minister in Northern Ireland—I think it is Gordon Lyons—to see how we can work together to progress the CfD scheme and include Northern Ireland? There is some work for us to do here at Westminster to get this over the line, so it would be helpful if the Minister did that.

In the past, I have worked closely alongside colleagues on this issue and I hope to do so again in the future, particularly with the inspiration and help of the Minister, because it is important that Northern Ireland has the same opportunities as the rest of the United Kingdom in relation to renewable energy.

Renewable energy is a path that we must pursue, and there need to be targets for us to achieve—the hon. Member for South West Norfolk outlined that as well. Policy direction for Northern Ireland is important and there have been movements to ensure that companies there can benefit from renewable energy incentives. Agencies such as Invest Northern Ireland or the Department of Agriculture, Environment and Rural Affairs, and local councils, including my own, can apply for some smaller grants and loans. However, it is important to note that these grants and loans are not on the same scale as the renewables obligation certificates scheme. If we were part of that scheme, we would be in a much better position.

My constituency of Strangford has an important and, I believe, sustainable poultry sector. Throughout my life, there have been poultry houses all the way down the Ards peninsula, where I live, and indeed around Newtownards town as well. In his opening speech, the hon. Member for South West Norfolk focused on a project that could play a role for poultry farmers in Northern Ireland.

To be fair, at this moment in time avian flu has once again cast its shadow all across Northern Ireland. In every part of Northern Ireland, there is a shutdown; there is no movement of poultry, and poultry farms have to keep all their birds indoors as a result of the avian flu scare. That is the right thing to do. At the same time, if we are to look beyond the avian flu crisis in Northern Ireland, which is fairly acute, we have to consider using the hon. Member’s idea in Northern Ireland. Such projects have been discussed in the past, but never really got anywhere, so maybe it is time to encourage Northern Ireland’s Department for the Economy to do a wee bit more.

In 2023, the Department for the Economy consulted on a new energy strategy action plan, but nothing formal has come from that. I know that the Assembly has only just got up and running again—it is good that it is up and running again—but it is time to focus on the renewables obligation certificates scheme and on green energy, and on the potential benefits that we can achieve in the future.

Our renewables projects in Northern Ireland relied on funding and schemes in order to succeed. However, I find it very disheartening that Northern Ireland has not been able to adopt a new scheme since the closure of the prior one. We need a new emphasis and there is a real need for Ministers back home and for Departments back home to co-ordinate their strategy and the way forward with the Minister here in Westminster.

[Mr Angus MacDonald (Inverness, Skye and West Ross-shire) (LD)]

In rural Britain, particularly rural Scotland, the cost per kilowatt to heat a house is about 24p, whereas those on mains gas in the city pay about 6p, so those using renewable electricity to heat their houses pay four times as much as those using mains gas. The renewables obligation certificate scheme is an important part of all this. Basically, rural Britain is getting absolutely stuffed on the cost of energy, so anything we can do to help those in rural areas is important. Does the hon. Gentleman agree?

[Jim Shannon]

I certainly do, and I thank the hon. Gentleman for his intervention. I represent the rural constituency of Strangford; indeed, most of Northern Ireland is rural, although there are large population groups in the major towns across the Province. In terms of the price of energy in Northern Ireland, the price oil is the highest it has been for some time, although they said on the news this morning that it would drop. But 68% of households in Northern Ireland have oil as their major source of energy for heating and cooking, so when oil prices rise, energy prices rise—as I suspect they do in the hon. Gentleman’s constituency—which puts us under a bit more pressure than most.

Energy is devolved in Northern Ireland, unlike in Scotland. However, Northern Ireland is an integral part of the United Kingdom, so there must be greater discussion between Westminster and the Northern Ireland Assembly to ensure that we are able to contribute to the net zero 2050 goals. I am reminded by the hon. Gentleman’s intervention of the SeaGen project in my constituency about 20 or 25 years ago, which tried to harness the tidal flows of the narrows of Portaferry and Strangford. At that time, it was not sustainable because of the price of energy, but today it would be. There are many projects we could look towards when it comes to contracts for difference.

To conclude, I look forward to working with colleagues to find a way forward that can benefit us all. The world is progressing, and climate change is a huge issue of major importance to many. The hon. Member for South West Norfolk referred to a project that is critically important for his constituency and that could be replicated across this great United Kingdom. Ensuring that we have a replacement strategy that we can take advantage of would be a positive step forward in achieving our goals. I look forward to the Minister’s contribution and hearing about her commitment. Through further discussion and integration and by working better together, Northern Ireland will not be left behind. Thank you so much, Sir Andrew.