Today NIRIG responded to what may have appeared to be a fairly ‘dry’ and technical consultation: Proposed Changes To Methodology For Calculating Distribution Loss Adjustment Factors. This paper, issued by NIE Networks on 14 February, contains proposals to increase the granularity of DLAFs through a time-differentiated calculation, which will also have the effect of bringing loss adjustment factors more into line with other parts of the UK and Ireland. Again, the description is technical, and therefore the consultation may have been missed by some wind farm owners.
However, the proposals, if fully implemented, will impact wind farm revenue. Currently 33kV connected generators receive a positive DLAF of 1.014. Generator-specific DLAFs will see average reductions of approximately 3% (0.985). Project investors and funders who have committed capital to projects in advance of this change will be negatively impacted.
The decarbonisation agenda is crucial for the Northern Ireland economy, not to mention the broader social and environmental benefits of increased sustainability. Policy changes at a regulatory and government level are retrospectively adding costs to renewables projects while simultaneously removing financial support, which begs the question of whether there is any strategic overview for the delivery of successful decarbonisation (in this context it is also worth noting that The Department of Finance will start work shortly on a Non-Domestic Rates Revaluation exercise with a view to preparing a new Valuation List for use from April 2020).
The renewable electricity sector is now a core industry bringing jobs, investments and local energy to the economy. A strategic approach and coordinated policy action is required to take us further and deliver even more.