What is the Renewable Energy Price Guarantee (REPG) scheme?

What is the Renewable Electricity Price Guarantee scheme?

The Renewable Electricity Price Guarantee is Northern Ireland’s new auction based support scheme for clean power. Its goal is straightforward. It aims to unlock investment in renewables, reduce exposure to global fossil fuel price shocks, and lower household bills while supporting the legal target of eighty per cent renewable electricity consumption by 2030. The Department for the Economy has published the final scheme design, signalling the move from policy to delivery, with the first auction expected in early 2027.

What the scheme is designed to do

The Renewable Electricity Price Guarantee is a significant milestone intended to incentivise new renewable generation and deliver lower electricity costs than today, while also bringing community benefits for residents who live near supported projects. In practice, it aims to make Northern Ireland a competitive place to build clean power and ensure local communities experience tangible advantages.

The policy rationale rests on three pillars.

1. Investor certainty

Since the closure of the Renewables Obligation, Northern Ireland has lacked a dedicated support mechanism. Capital has tended to flow to Great Britain or the Republic of Ireland. A domestic scheme helps reanchor investment.

2. Consumer protection

By backing low marginal cost generation, the scheme aims to stabilise bills over time and reduce dependency on imported gas.

3. Net zero delivery.

It is tailored to the all island Single Electricity Market and to the eighty per cent by 2030 renewable consumption mandate in the Climate Change Act for Northern Ireland.

How the Renewable Electricity Price Guarantee will work

The final design indicates the scheme will draw on successful elements of competitive programmes such as Contracts for Difference in Great Britain and the Renewable Electricity Support Scheme in Ireland. These are proven, competitive mechanisms that award contracts through auctions and provide predictable revenues that support financeable business cases. The design sets out the legal and governance framework, the funding mechanism, eligibility rules and the contract allocation process. Further detail will follow in the Terms and Conditions consultation.

While the commercial fine print is still to be confirmed, the direction is clear.

• Competitive auctions will allocate support and promote value for money for consumers

• Price certainty for generators under a price guarantee style contract will help de risk financing and accelerate build out

• Community benefit features will provide bill discounts to households near supported projects, strengthening local acceptance

Who and what might qualify

Eligibility details will be finalised in the Terms and Conditions, but the scheme is geared to a range of renewable electricity technologies and designed for Northern Ireland’s grid and market context. The design phase has already included technical modelling and a financial impact assessment to ensure the scheme fits the Single Electricity Market and consumer interests.

The Terms and Conditions are expected to address the following.

• Technology categories and delivery windows

• Project size thresholds and location rules

• Milestone obligations such as financial close and grid connection

• Sustainability and supply chain requirements

• Metering, data and settlement standards

Timeline and next milestones

• September 2025. The Department for the Economy publishes the final scheme design

• Late 2025. Consultation on Terms and Conditions covering contractual detail and settlement mechanics

• Early 2027. First auction anticipated, subject to consultation outcomes, legislation, subsidy control clearance and institutional setup

How does it compares with other schemes?

Great Britain’s Contracts for Difference programme is a mature, competitive framework that contracts low carbon power through auctions. Recent reforms include longer twenty year contracts and revised strike price caps to support delivery. The Renewable Electricity Price Guarantee borrows from this approach but will be tailored to the Northern Ireland market within the all island system.

Ireland’s Renewable Electricity Support Scheme also uses competitive auctions to contract low carbon generation. The Renewable Electricity Price Guarantee is designed for Northern Ireland, but draws on lessons learned in order to fit cross border market dynamics.

What it means for developers and investors

Bankability and cost of capital

A predictable revenue line typically reduces financing costs and increases competition at auction. For projects that previously struggled to proceed without a domestic scheme, the Renewable Electricity Price Guarantee is likely to reopen pipelines and crowd in private capital. Developers should prepare early by securing grid milestones, land rights and planning consents well ahead of auction windows.

Auction discipline

Auctions reward robust cost control and realistic bidding. With global supply chains still tight for turbines, cables and transformers, prudent sponsors will build in contingencies and avoid optimistic assumptions for capital cost, operating cost and production.

Delivery risk and milestones

Expect clear delivery milestones with consequences for slippage. Lenders will scrutinise engineering procurement and construction capability, original equipment manufacturer warranties, construction insurance and interface risk between grid connection and generation assets.

Community and permitting

The bill discount element for nearby households is more than a gesture. It is a licence to operate tool. Early engagement, transparent construction plans and local supply chain participation can reduce planning friction and reputational risk.

What it means for consumers and the system

Bill stability over time

By stimulating a larger local fleet of low marginal cost generation, the scheme aims to lower average electricity costs versus a scenario with greater exposure to volatile fossil fuel prices. The policy intent is to deliver lower prices for households over time.

Community benefits

Households near supported projects will receive a discount on their electricity bills. This helps share value locally and supports acceptance of new infrastructure.

Security and decarbonisation

More renewable generation sited in Northern Ireland improves security of supply and cuts emissions. It supports delivery of the eighty per cent by 2030 target while aligning with wider UK and European climate goals.

How to prepare for the first auction

• Track the Terms and Conditions consultation. This will define bid formats, strike price mechanics, settlement and penalties for non delivery. Submitting evidence based responses can help shape practical and investable rules

• Tighten project fundamentals. Secure planning, grid and land rights. Refresh levelised cost assumptions with current supplier quotes. Structure operation and maintenance with availability guarantees

• Model multiple revenue and curtailment cases. The all island system can see regional constraints. Stress test P50 and P90 energy estimates and constraint risks

• Plan for community engagement. Design meaningful benefit packages and transparent construction timelines to build trust

• Align financing. Engage lenders early on debt sizing, covenants and hedging so you can sign quickly if you win a contract

The Renewable Electricity Price Guarantee is Northern Ireland’s route to competitively contract new renewable electricity, lower bills and re anchor green investment at home. With the final scheme design published and a first auction targeted for early 2027, now is the time for developers to prepare pipelines, for investors to update risk models, and for communities to help shape projects that deliver shared value.