Direction on Conventional Offer Issuance Criteria and
Matters Related to Gate 3
DOCUMENT
TYPE:
REFERENCE:
DATE
PUBLISHED:
RESPONSES
TO:
Direction
CER/09/191
18th December 2009
Andrew Ebrill
The Commission for Energy Regulation,
The Exchange,
Belgard Square North,
Tallaght,
Dublin 24.
www.cer.ie
CER – Information Page
The purpose of this Commission direction is to present, in
detail, the criteria for determining which non-renewable
(“conventional”) network connection applicants will receive a
connection offer along with Gate 3 renewable projects. It also
deals with other matters related to the Gate 3 process.
This takes into account public comments received as part of
the Commission’s extensive public consultation on the
matter, which included two consultation papers and two
public workshops.
Target Audience:
Electricity generator/interconnector applicants for connection to the
network.
Related Documents:
CER direction on Gate 3 and Related Matters (CER/08/260) of 16th
December 2008. See following link:
http://www.cer.ie/GetAttachment.aspx?id=54270766-56dc-4ddfb0a1-d3be66a23df1
Consultation on Treatment of Conventional Generator Connection
Applicants (CER/09/031) of 18th February 2009. See following link:
http://www.cer.ie/GetAttachment.aspx?id=157f1e6a-1154-4647baef-cd604332cd95
Proposed Direction on Conventional Offer Issuance Criteria
(CER/09/114) of 24th July 2009. See following link:
http://www.cer.ie/GetAttachment.aspx?id=952e3c6b-ebdf-4866b278-06d0391562b3
2
EXECUTIVE SUMMARY
1. Introduction
In December 2008 the Commission published a direction (CER/08/260)1 on
Gate 3 of Ireland’s Group Processing Approach (GPA) for the connection to
the electricity network of renewable generators. The Commission directed that
network connection offers issue to circa 3,900 MW of renewable generation
projects in Gate 3, in the context of EirGrid’s long-run plan for the
development of the transmission system to 2025 known as Grid252.
Following this, the Commission published a consultation paper in February
2009 (CER/09/031)3 to discuss the basis for determining which conventional
applicants (i.e. non-renewable generator and interconnection projects) should
receive an offer in tandem with Gate 3 renewable projects. Having considered
the public comments received to this consultation, on 24th July 2009 the
Commission published a proposed direction (CER/09/114)4 on the matter. This
set out, in detail, the proposed criteria for determining which conventional
applications would receive a connection offer with Gate 3. It also dealt with
related connection policy issues such as the CER/ESB Asset Strategy
Programme. The consultation paper and the proposed direction were each
subject to a public Commission workshop held in Dublin.
2. Background
Taking account of the Commission’s objectives for this process (see section 2)
and the public comments received to the proposed direction (CER/09/114),
the Commission now issues this final direction to EirGrid and ESB Networks
Limited on the conventional offer issuance criteria and related Gate 3 matters,
as summarised in this Executive Summary. It should be noted that there are
no fundamental policy changes between the proposed direction and this
direction. However there are some detailed changes and these are generally
shown in section 4 of the paper which discusses the public comments
received.
With this direction the Commission is publishing the following:
•
•
1
2
3
4
A related paper entitled “Direction on Detail for Allocating Scheduled Firm
Access in Gate 3 ITC Programme” (CER/09/192). This paper deals with,
among other issues, the application date order to be used by the system
operators for Gate 3 renewable generators in the ITC Programme; and,
The first eight years of audited scheduled firm connection dates, i.e. for the
years 2010 to 2017, determined by the ITC Programme for applicants
potentially eligible for an offer.
http://www.cer.ie/GetAttachment.aspx?id=54270766-56dc-4ddf-b0a1-d3be66a23df1
http://www.eirgrid.com/media/Grid%2025.pdf
http://www.cer.ie/GetAttachment.aspx?id=157f1e6a-1154-4647-baef-cd604332cd95
http://www.cer.ie/GetAttachment.aspx?id=952e3c6b-ebdf-4866-b278-06d0391562b3
3
3. Maximum Conventional Capacity to 2025
A maximum of 3,400 MW of conventional project capacity is considered for a
connection offer with Gate 3, as this is the capacity of conventional projects
that is needed to maintain Ireland’s security of supply to 2025. This figure will
be subject to change by the Commission as warranted, for example due to
changing demand growth assumptions impacting on the expected long-run
required conventional generation.
4. Small Steps to 2025
The Commission has decided that a “small steps” approach is most
appropriate, so that not all of the required 3,400 MW will receive an offer as
part of Gate 3 - this idea was well received by respondents to the proposed
direction. It will allow the conventional connection applications that do not
receive an offer in this phase, as well as those applications not yet received, to
be separately considered for offer issuance/connection in the future. What this
provides is future flexibility. It reduces the chances of “locking in” grid
connections to 2025 with today’s technology and so keeps open the ability of
the system to connect potentially new and more cost effective, flexible,
diversified, reliable and/or environmentally friendly generation, ultimately to the
benefit of the environment and the end-customer. It also has the advantage of
being able to consider the longer-term connection of conventional projects
when information is to hand on the take-up rate of Gate 3 renewable offers,
which will impact on the availability of network capacity.
The criteria for selecting conventional projects for an offer in the next phase(s)
will be subject to a separate consultation, expected in the first half of 2011,
and this consultation will also consider what next steps there will be in relation
to renewable connection offers. This is the earliest stage when the take-up
rate on Gate 3 renewable and conventional offers can be known with a
reasonable level of accuracy. This paper will also consider providing for
“backfilling” if conventional or renewable applicants eligible for an offer in this
phase do not accept their offers.
5. Offer Issuance Criteria
In keeping with small steps, the Commission has decided that a “multidimensional” approach will be applied in selecting conventional projects for an
offer with Gate 3 renewables. They will be selected using the following three
criteria (see section 4 for comments/response on the criteria and section 5 for
further details on them):
1. All those generating projects which have received a non-firm offer - and
not rejected it - as well as those already connected which are non-firm or
partially firm. This includes five generation projects, totaling in the order of
600 MW, eligible for a non-firm offer on foot of a Commission direction last
4
year5. In addition it includes two pumped storage generating plants given
non-firm approval by the Commission6. The five generation projects were
selected by the Commission, in application date order, on the basis that
they could be relatively easily accommodated on the transmission system
and contribute to security of supply, so selecting them for a firm offer
makes efficient use of transmission infrastructure and facilitates optimal
development of it. It is also simple and transparent, and, by recognising
the ability of the system to accommodate the generating plant, will help
contribute to competition and security of supply in a timely manner. In view
of this and the general desirability not to have plant on the system on an
enduring non-firm basis (and the SEM is not designed with this in mind), it
is consistent with the Commission’s objectives for this issue that they
receive a firm offer.
For similar reasons the projects already on the network with non-firm or
partially firm access which would also be eligible for an offer would be the
104 MW peaking plant at Tawnaghmore and the “extra” 215 MW applied
for by Endesa at Great Island. The latter assumes “immediate” firm
capacity being provided to Endesa for its 285 MW connection application
at Tarbert, with 216 MW of firm likewise immediately provided to Endesa’s
Great Island plant. This is consistent with these sites’ current firm
connection capacity and is to uphold the integrity of the CER/ESB Asset
Strategy. Endesa’s extra 215 MW applied for at Great Island will therefore
be eligible for an offer as this is considered as non-firm capacity pending
allocation of a scheduled firm access date and the associated completion
of the ITC Programme. Please see section 6 for further details; and,
2. The first 500 MW of applicants with the earliest scheduled transmission
firm connection date for their full requested Maximum Export Capacity
(MEC), in addition to the projects eligible for an offer through (1) above, as
indicated by the ITC Programme. The approach recognises the ability of
the transmission system to accommodate the projects’ output in the short
to medium term and it means that those plants that can be connected to
the transmission system on a firm basis relatively speedily, thereby
contributing to security of supply and electricity market competition most
quickly, will be eligible for an offer. It also makes efficient use of
transmission infrastructure (both existing and planned capacity) and
facilitates optimal development of it, meeting another of the Commission’s
objectives. For clarity, if the ITC Programme allocates capacity to more
applicants than are necessary to satisfy this 500 MW criterion in any one
year, the applicants shall be chosen in initial application received date
order up to the first project that brings the total MEC above 500 MW
assuming that this threshold is not exceeded by more than 10%, i.e. the
total allocation of scheduled firm quantities under this criterion does not
exceed 550 MW; and,
5
The 5 projects are: Suir 98 MW OCGT; Caulstown 58 MW OCGT; Cuileen Power 98 MW OCGT;
Edenderry 116 MW OCGT; Kilbride 280 MW OCGT. Please see
http://www.cer.ie/GetAttachment.aspx?id=1ce9dba5-70fa-4487-83d1-8d6f4f9ba288
6
Please see http://www.cer.ie/en/electricity-transmission-network-decisiondocuments.aspx?article=c254af28-c1bc-495b-8695-35f41573773f & http://www.cer.ie/en/electricitytransmission-network-decision-documents.aspx?article=a9046b59-2032-4ba8-aae7-063b3d06eb3c
5
3. In recognition of the strategic benefits of interconnectors associated with
the cross border trade in electricity, an interconnector with the earliest full
scheduled firm access date as determined by the ITC Programme will be
eligible for an offer. This is likely to be IMERA’s 350 MW application for an
east-west interconnector at Arklow. It should be noted that the firm
connection date for this interconnector from the ITC Programme will be
using the initial application received date order methodology as with all
conventional applicants. This is a proportionate step, recognising the
benefits of interconnectors but also that they cannot be viewed in isolation
to generator applicants in what is a congested network. Please see
section 6 for more details.
Overall, this approach means that those conventional projects that can be
connected to the transmission system on a firm basis in the short and
medium-term will receive an offer. It provides for connection offers issuing in
this phase to circa 1,600 MW of conventional generation projects in addition to
one interconnector project. In other words it is anticipated that about 2,000
MW of conventional connection offers will issue as part of this process, along
with circa 3,900 MW of Gate 3 renewable connection offers, all over the next
18 months (see later).
6.
Scheduled Firm Quantities
Scheduled firm access dates will initially be determined for the conventional
applicants eligible for an offer (see above) and the Gate 3 renewable projects
using EirGrid’s ITC Programme, with a particular application date order
methodology (see section 5 for details).
In addition, EirGrid will apply criteria for the allocation of scheduled firm
access quantities, for both Gate 3 renewable projects and the conventional
projects eligible for an offer, which will examine the cost of alleviating
transmission constraints (via transmission reinforcements) versus the cost of
incurring the constraint costs. This recognises the current reality that when
building the network, EirGrid, in keeping with its functions, develops the
transmission system efficiently. It would not develop a transmission
reinforcement for a connecting party where the cost of that reinforcement is
greater than the anticipated cost of system constraints incurred by not building
it. In recognition of this, the criteria may therefore bring forward the firm
connection dates for the projects eligible for an offer from those determined by
the ITC Programme, to their benefit. It is anticipated that the criteria which will
be applied by EirGrid for the re-calculation of scheduled firm quantities will be
approved by the Commission and published shortly following the SEM
Committee’s proposed direction in relation to Scheduling, Dispatch and
Access7, which is very relevant to this matter. This proposed direction is
expected by March - therefore the revised scheduled firm connection dates
will be developed in the months following this.
7
Please see the recent consultation paper:
http://www.allislandproject.org/GetAttachment.aspx?id=54a53952-22c8-4196-975f-fe9ab14ec2a5
6
7. Project Advanced Commitment
The Commission has decided against requiring significant advanced
commitment to make conventional projects eligible for an offer in this phase.
However there may be merit in doing so for a subsequent phase(s), in order to
help ensure that those projects in the connection queue are serious and have
the intent to proceed. This issue will be dealt with as part of the consultation
process on offers for future phases, expected to commence in the first half of
2011.
8. Timelines
It is anticipated that the audited scheduled firm access quantities/dates from
the ITC Programme will be published by EirGrid in phases. The first eight
years, from 2010 to 2017, are published with this paper. The next 4 years
(2018 to 2021) are planned to be published in mid January and the final four
years (2022 to 2025) at the end of January.
Conventional applicants that are eligible to receive an offer will be required to
pay the standard processing fee within 20 business days of the final firm
access dates from the ITC Programme being published. Assuming they pay
the processing fee, conventional applicants will receive an offer along with
Gate 3 renewable generators, i.e. between December 2009 and June 2011.
When within this period they will receive an offer depends on what Gate 3
offer group they are associated with, as referred to in section 7.
On efficiency grounds, conventional projects in this phase have 50 business
days to accept their offers, as is already the case for Gate 3 renewable
generators. If a final decision in relation to SEM Scheduling, Dispatch and
Access has not been published by the time offers/constraint information has
been issued (as will be the case for offers early in the offer programme), then
the 50 business day offer timeline will not commence until that decision has
been issued. This is because this decision, which is expected in the Summer
(following a proposed direction in March), may impact on SEM rules which are
of relevance to parties when deciding whether or not to proceed to connection.
For clarity, this will apply to both conventional applicants and Gate 3
renewable applicants receiving an offer.
***********************
7
Table of Contents
Executive Summary…………………………………………….…..3
1.
Introduction……………………………………….………...…9
2.
Background……………………………………………..…...11
3.
Legislative Context………………………………….….…...14
4.
Responses to Proposed Direction……………….….….....15
5.
Selection of Conventional Generators……….…...…...….32
6.
Related Public Policy Issues……………………….………43
7.
Timelines……………………………………………..………48
Appendix 1: List of Conventional Applicants
in ITC Programme…………………………………….….……….51
Appendix 2: ITC Programme Assumptions……………….……53
Appendix 3: Terms of Reference of ITC Audit………………...63
8
1.
Introduction
1.1
The Commission for Energy Regulation (“the Commission”) is the
independent body responsible for overseeing the regulation of Ireland's
electricity and gas sectors. The Commission was initially established
and granted regulatory powers over the electricity market under the
Electricity Regulation Act, 1999. The enactment of the Gas (Interim)
(Regulation) Act, 2002 expanded the Commission’s jurisdiction to
include regulation of the natural gas market, while the Energy
(Miscellaneous Provisions) Act 2006 granted the Commission
additional powers in relation to gas and electricity safety. The
Electricity Regulation Amendment (SEM) Act 2007 outlined the
Commission’s functions in relation to the Single Electricity Market
(SEM) for the island of Ireland. This market is regulated by the
Commission and the Northern Ireland Authority for Utility Regulation
(NIAUR). The Commission is working to ensure that consumers benefit
from regulation and the introduction of competition in the energy sector.
1.2
Following consultation, on 16th December 2008 the Commission
published a direction (CER/08/260)8 on Gate 3 of Ireland’s Group
Processing Approach (GPA) for the connection to the electricity
network of renewable generators. The Commission directed EirGrid as
Transmission System Operator (TSO) and ESB Networks as
Distribution System Operator (DSO) to issue connection offers to circa
3,900 MW of renewable generation projects as part of Gate 3. This is
with a view to achieving the Government’s target of 40% of electricity
consumption coming from renewable sources by 2020. The direction
decided that the 3,900 MW of renewable generators in Gate 3 will be
selected by (earliest) application date order and connected to the
network in the context of EirGrid’s long-run plan for optimal
development of the transmission system to 2025. This plan is now
known as the Grid259.
1.3
The direction also discussed the potential treatment of non-renewable
generation, referred to as “conventional” projects and which also
includes interconnector connection applications. It stated that the size
and criteria for the issuance of connection offers to conventional
generation would be the subject of a separate consultation.
1.4
Accordingly on 18th February 2009 the Commission published a broad
consultation paper (CER/09/031)10 on the options for the potential
treatment of conventional connection applications for offer issuance.
The options and issues raised in this paper were discussed with
stakeholders at a public workshop held by the Commission in Dublin on
12th March.
8
9
10
http://www.cer.ie/GetAttachment.aspx?id=54270766-56dc-4ddf-b0a1-d3be66a23df1
http://www.eirgrid.com/media/Grid%2025.pdf
http://www.cer.ie/GetAttachment.aspx?id=157f1e6a-1154-4647-baef-cd604332cd95
9
1.5
Having considered the public comments received to this consultation
paper, on 24th July 2009 the Commission published a proposed
direction (CER/09/114)11 which set out, in detail, the proposed basis for
determining which conventional applications would receive a
connection offer in tandem with Gate 3 renewables projects. It also
dealt with related connection policy issues such as the CER/ESB Asset
Strategy Programme. This paper was also the subject of a public
workshop, held by the Commission on 26th August to explain and
discuss its proposals.
1.6
Taking account of the Commission’s objectives for this process (see
section 2) and the public comments received to the proposed direction,
the Commission now issues this final direction. This covers the criteria
for determining which conventional applications will receive a
connection offer in tandem with Gate 3 renewables projects and related
Gate 3 matters. It should be noted that there are no fundamental policy
changes between the proposed direction and this direction. However
there are some detailed changes and these are generally shown in
section 4 of the paper which discusses the public comments received.
1.7
In terms of the layout of this direction, section 2 provides a background
to conventional offer issuance and section 3 sets the legislative context.
Section 4 summarises the main comments received to the previous
proposed direction and provides a Commission response. Section 5 is
the key section which details the criteria on which conventional
applicants will receive a connection offer with Gate 3, while Section 6
discusses the inter-related policy issues of the CER/ESB Asset
Strategy Programme and the treatment of interconnector applications.
Finally section 7 then deals with the timelines for the publication of
scheduled firm connection dates and conventional connection offer
issuance/acceptance.
1.8
Published in tandem with this direction is a related paper entitled
“Direction on Detail for Allocating Scheduled Firm Access in Gate 3 ITC
Progamme” (CER/09/192). This deals with, among other issues, the
application date order to be used by the system operators for Gate 3
renewable generators in the ITC Programme. In addition, the first eight
years of audited scheduled firm dates determined by the ITC
Programme, i.e. covering the years 2010 to 2017, for applicants
potentially eligible for an offer are also published with this direction see sections 5 and 7 for more details.
1.9
The Commission issues this direction to the electricity system
operators, EirGrid as TSO and ESB Networks Limited as DSO,
pursuant to section 34 of the Electricity Regulation Act, 1999.
11
http://www.cer.ie/GetAttachment.aspx?id=952e3c6b-ebdf-4866-b278-06d0391562b3
10
2.
Background
ITC Programme & New Approach for Applicants
2.1
As explained in detail in the February consultation paper (CER/09/031),
the recent large volume of conventional projects seeking to connect to
the network means that reviewing them individually and issuing offers
to them sequentially, as under the old single processing regime, is no
longer feasible. In addition, the Grid Development Strategy (GDS)
processing approach to Gate 3, set in the Gate 3 direction, will allow for
the long-term optimal development of the transmission system, as
developed from Grid25, to connect both anticipated renewable and
conventional generators. In this context, for efficiency and practical
reasons the Gate 3 direction decided that both the 3,900 MW of
renewable applicants and conventional applications submitted by 16th
December 2008 (the date of the Gate 3 direction), which can also
provide proof of land access, are included by EirGrid in the Incremental
Transfer Capacity/Capability (ITC) Programme together. For clarity, this
would also include any interconnector applications.
2.2
There were over 6,000 MW of conventional applicants in the connection
queue by the date of the Gate 3 direction, and these are included in the
ITC Programme. These applicants are shown in Appendix 1. This
direction sets out detailed criteria for how many of these conventional
applicants will receive a connection offer in tandem with the Gate 3
offer programme (for renewable generators), and on what basis.
2.3
The ITC Programme uses transmission capacity assumptions over the
period from 2010 to 2025 as derived from Grid25 - the Gate 3 direction
provides more detail on how the Programme works while details of the
assumptions used in the Programme are published in Appendix 2 to
this paper. The Programme will indicate the scheduled deep/firm
connection dates from 2010 to 2025 for conventional applicants
potentially eligible for an offer, along with Gate 3 renewable projects
eligible for an offer, using an application date order methodology12. The
exact date order approach to be applied for renewable and
conventional applicants in the ITC Programme is discussed in section
5.18.
2.4
The results of the ITC Programme are subject to an independent
technical audit, the Terms of Reference for which have been approved
by the Commission and are provided in Appendix 3. The audited
scheduled firm connection dates from the ITC Programme are expected
to be published by EirGrid in phases following Commission approval,
with the first eight years of audited scheduled firm connection dates
12
The scheduled firm connection dates are impacted on by the estimated dates for the completion of
shallow and deep transmission works. These dates could change for reasons outside the control of
EirGrid, for example due to planning and other consenting delays. Currently any delays in this regard are
borne by the connecting party. Firm dates are also linked to the achievement of Operational Certificates
for wind farms which requires full compliance with the Distribution and/or Grid Codes.
11
(2010 to 2017) published with this paper. Offers will roll out to 3,900
MW of renewable projects and only a certain capacity of conventional
projects - which is the subject of this paper - from this month through to
June 2011 (see section 7 for timeline details).
2.5
As discussed in section 5, the scheduled firm connection dates derived
from the ITC Programme will also be subject to further analysis by
EirGrid to reflect the actual reinforcement build, which is optimised
using a constraints analysis (to allow for the efficient development of
the network), associated with the projects eligible for an offer.
Objectives for Selecting Conventional Generators
2.6
The possible approaches for selecting conventional generator
applicants for an offer along with the Gate 3 renewable projects are, as
mentioned in the consultation paper and proposed direction, measured
against the following objectives which sometimes may conflict:
•
•
•
•
•
•
•
•
•
Be transparent and easy to implement;
Be practical and timely to implement, especially with regard to the
Gate 3 renewable offer timelines already set;
Maintain Ireland’s security of electricity supply and contribute to
competition;
Retain flexibility, to the extent feasible, for future generator
connections to the network;
Provide for an efficient use of scarce network capacity and system
operator resources;
Facilitate optimal development of the transmission system as
provided for in EirGrid’s Grid25;
Ensure that the process does not negatively impact on the end-user
cost of electricity;
Be fair and reasonable to individual connection applicants; and,
Not unfairly discriminate against renewable connection applicants.
These objectives assist the Commission in deciding on the criteria for
selecting conventional applicants for an offer with Gate 3, which is
discussed in section 5.
Small-Scale / Autoproducers / Non-Wind Renewables
2.7
The list in Appendix 1 includes a number of small-scale distributionlevel conventional applicants of less than 5 MW, as well as
autoproducers and non-wind renewables processed outside of the
GPA. They are included in the ITC Programme with large conventional
projects (and Gate 3 renewable projects) for derivation of their
scheduled firm connection date, using an “initial application received
date” methodology as with all other applicants in Appendix 1. These
projects may then be (or may already have been) issued an offer
separately under a separate process which was decided on recently by
the Commission in its paper “The Treatment of Small, Renewable and
12
Low Carbon Generators outside the Group Processing Approach”,
CER/09/09913.
Right to Direct on Offers
2.8
More generally, pursuant to the Electricity Regulation Act, 1999, and
outside this process if deemed appropriate, the Commission will
continue to reserve the right to direct the system operators to issue an
offer to any generator connection applicant if warranted on security of
supply, competition, environmental, or other grounds, taking into
account the potential impacts of this.
13
Please see http://www.cer.ie/en/electricity-distribution-network-currentconsultations.aspx?article=d1dda12a-378f-4d96-bf82-d1883d8111c1
13
3.
Legislative Context
3.1
The Commission may give directions to the TSO and DSO under
section 34 (1) of the Electricity Regulation Act, 1999 (as amended) (“the
Act”). Section 34(2) of the Act provides inter alia that these directions
may provide for “matters which the Commission considers necessary or
expedient for the purpose of making an offer for connection…”14 This
affords the Commission with relatively wide discretion and is the
statutory basis for the Commission’s direction in this matter of
conventional connection applications.
3.2
In relation to security of supply, the Commission has a duty to monitor
this under SI 60 of 2005. It is also a function under section 9(4)(b) of
the Act to secure that all reasonable demands of final customers for
electricity are satisfied. To this end, the Commission is empowered
under SI 60 of 2005 to “take such measures as necessary to protect
security of supply”15. The Commission therefore views its statutory
responsibilities in relation to security of supply to be of paramount
importance, including in relation to any decision it makes on this
subject.
3.3
More generally, pursuant to section 9 of the Act, the Commission has a
responsibility not to discriminate unfairly between relevant
stakeholders, to protect the interests of final customers, to promote
competition and to promote the use of renewable, sustainable or
alternative forms of energy. The Commission also has a duty to take
account of protection of the environment in carrying out its functions.
The Commission is very mindful of these responsibilities in relation to
decisions it makes on conventional connection issues.
14
15
See section 34(2)(f) of the Act.
See Regulation 28(5) of SI 60 of 2005.
14
4.
Responses to Proposed Direction
4.1
The Commission received 13 responses to its proposed direction on
the treatment of conventional generator connection applicants
(CER/09/114). This section summarises the key comments made by
topic, followed by the Commission’s response.
Identity of Respondents
4.2
The following is a list of the parties that responded to the proposed
direction:
•
•
•
•
•
•
•
•
•
•
•
•
•
Airtricty
Ballylongford Electricity Company;
Bord Gáis Energy;
Bord na Móna;
RPS Group;
EirGrid;
ESB Networks;
Endesa Ireland;
Enercomm International
IMERA;
IWEA;
Lumcloon Energy; and,
Viridian.
The detailed comments themselves are published separately with this
paper where the respondents had no objections to them being
published.
Previous Comments on Broad Policy
4.3
The Commission’s earlier February consultation paper (CER/09/031)
discussed broad policy issues and options on the criteria for
conventional connection offers, such as:
•
•
•
•
The maximum capacity of conventional projects to be considered for
an offer along with Gate 3 renewables - proposed as 3,400 MW on
the basis that this is an estimate of what is needed to maintain
security of electricity supply to 2025;
Whether all the 3,400 MW of conventional projects or a subset of
them should receive an offer with Gate 3 renewables, i.e. whether a
“big bang” or “small steps” approach should be adopted;
How the conventional projects should be selected for an offer at a
high level, for example “application date only” or “earliest firm
connection date” as indicated by the ITC Programme;
Whether there should be advanced financial or other commitments
from conventional applicants in order to receive an offer;
15
•
•
Whether there should be priority for non-firm projects or
interconnectors; and,
The CER-ESB Asset Strategy Programme.
Readers are guided to our July proposed direction (CER/09/114) for a
full summary and detailed Commission response to public comments
received on these high level policy matters. The focus for this section
below is on summarising and responding to the public comments
received in response to the detailed proposals on conventional offer
issuance that were contained in the July proposed direction.
General Reaction
4.4
At a general level the Commission acknowledges that, while
respondents raised particular issues and queries with aspects of the
proposed direction (as discussed below), overall many respondents
had a generally positive reaction to both the paper and its overall
proposed approach to conventional offers.
Capacity of Conventional Offers
4.5
One respondent agreed with the Commission’s proposal that
conventional plant be issued with an offer with Gate 3 renewables to
the extent that this is needed to maintain security of supply. It also
agreed with the Commission’s proposal to keep the maximum of 3,400
MW of conventional capacity, which is considered necessary to
maintain security of supply to 2025, under continual review.
4.6
In contrast, another party stated that allowing circa 1,600 MW of
conventional generation capacity to receive an offer with Gate 3
renewables, ahead of prior renewable applicants, to meet security of
supply standards to 2025 is excessive and somewhat arbitrary. It stated
that offers should only be issued to conventional plant needed to
maintain security of supply over the next five years and, given the
generation surplus now forecast to 2015, this should be reviewed. The
respondent also stated that the Commission’s approach is at odds with
the principles afforded towards renewables under EU law, quoting the
new EU Directive 2009/28/EC which says that Member States shall
provide for “either priority access or guaranteed access to the grid
system of electricity produced from renewable energy sources”. This
new directive will have legal effect during the Gate 3 process and a
generator who suffers a loss on account of a delay in accessing the grid
may sue the Irish Government for any losses suffered. Another
respondent asked the Commission to set out in detail the basis for each
of the areas where priority has been afforded to conventional
connection applicants ahead of prior renewable applicants.
16
Commission’s Response
The Commission is of the view that 3,400 MW of extra conventional
capacity is required to maintain security of supply at reasonable
standards to 2025, the period to which EirGrid’s Grid25 is planning
transmission development. This is not an arbitrary figure but based on
reasonable assumptions laid out in the February consultation paper and
which still hold over the long-term period to 2025. As mandated through
EU Directive 2005/89/EC the Commission seeks to consider security of
supply and overall investment signals - including network connection
policy - not only over, say, the next five years but also over a longer
term period (i.e. to 2025) so as to provide for a stable generation
investment climate. If the Commission were to focus on the short-term
conventional generation requirements only, it would not recognise the
potential long lead-times for generation investment, network investment
and/or the risk of generation project attrition prior to delivery. Hence
such a focus on the short-term only could result in the Commission
having to intervene in the market on an ongoing basis in order to “keep
the lights on”, rather than the preferred market/competitive based
delivery of security of supply which is facilitated through a longer-term
consideration of the issue and the associated stable investment
climate. In this context, in order to maintain security of supply at
adequate levels to 2025, the Commission has looked long-term and
stated that 3,400 MW is the maximum capacity of conventional
applicants that will be considered for an offer along with Gate 3
renewables. This is not considered unfair to prior renewable applicants
as this is necessary in the public interest, i.e. to maintain long-term
security of supply, which is one of the Commission’s key statutory
duties.
Within this framework, the consultation and proposed direction
considered whether a “small steps” or “big bang” approach should be
adopted, i.e. whether all 3,400 MW of offers should issue with Gate 3
renewable offers or whether only a sub-set should do so in this phase,
with a future phase(s) to provide for offer for the remaining capacity.
For reasons explained in section 5.11, the Commission has decided
that a small steps approach is more appropriate to a big bang. This
approach is adopted using “multi-dimensional” criteria for selecting
conventional applicants for an offer (discussed later in this section and
in section 5.13), which provide for offers issuing to about 1,600 MW of
conventional generator plants plus one interconnector. The small steps
approach and associated “multi-dimensional” selection criteria are
designed to meet the Commission’s overall objectives for this process,
particularly to maintain security of supply, but also to provide for future
flexibility in connections, to make efficient use of the transmission
system and to facilitate optimal development. The resulting circa 1,600
MW of generation plant plus an interconnector that will receive an offer
in this phase is neither excessive nor arbitrary, but rather the result of a
carefully consulted on and selected methodology which meets the
Commission’s specific statutory duties and objectives for this process.
17
Looking forward, the Commission has also said that it will keep the
2025 conventional capacity requirement of 3,400 MW figure under
review into the future. This will take account, among other things, of
changing demand growth rates. The criteria for conventional offer
issuance in a future phase(s) will be subject to separate public
consultation in the first half of 2011.
To answer the query about past Commission decisions to allow
conventional applicants to receive an offer ahead of prior renewable
ones, this is a matter of public record which the Commission is happy to
discuss with respondents. The Commission has always taken such
decisions in accordance with its direction CER/05/049 and on a caseby-case basis, taking account of the wider public interest such as the
need to maintain security of supply and the impacts of such a decision
on prior renewable applicants.
Small Steps to 2025
4.7
Many respondents agreed with the Commission’s proposed “small
steps” approach to issuing conventional connection offers in this phase
(i.e. along with Gate 3 renewables), as this maintains security of supply
but also future flexibility in connections. Indeed no respondent came out
against this approach.
Commission’s Response
The Commission continues to believe that a small steps approach to
this matter is most appropriate. It is a prudent, equitable and fair
approach which, by virtue of selecting a significant capacity of
conventional applicants for an offer in this first phase with Gate 3
(through the multi-dimensional criteria), will meet the Commission’s
statutory duties to protect security of electricity supply and promote
competition. In particular the approach also provides future flexibility in
the connection of conventional plant to the transmission system. This
issue is discussed in detail in section 5 of this paper, while section 5.5
of the July proposed direction also provides a summary of earlier public
comments and the Commission’s response on the matter. For
information, a consultation paper on the conventional offer issuance
criteria for the next phase(s) of conventional offers (beyond those
issuing with Gate 3) is anticipated for the first half of 2011.
Multi-Dimensional Offer Criteria
4.8
Typically respondents who commented welcomed the Commission’s
proposed “multi-dimensional” approach to selecting conventional
generators for an offer with Gate 3 (please see section 6.15 of the
proposed direction). It was pointed out that it provides a balance
between the time at which plant sought connection, the ability of the
transmission system to accommodate that plant and the advancement
of non-firm or partially firm projects which have already demonstrated
18
some commitment. There were comments and queries about the three
criteria within this approach, as below.
Non-Firm / Partially Firm Criterion
4.9
Regarding the criterion providing for offers issuing to non-firm/partially
firm projects, one party was supportive on the basis that these projects
are more easily accommodated on the transmission system and will
contribute to security of supply in the short term at the lowest cost.
Another respondent, who was similarly supportive of the proposal,
requested the Commission to confirm if its client’s non-intermittent
renewable generation project is also eligible under this criterion;
otherwise (it says) it would be inconsistent with the Commission’s policy
not to discriminate between plant types. Another respondent said that
the 5 generators brought forward for a non-firm offer should be treated
the same as all others in the queue if they were not operational for
Winter ‘09/10. It also argued that the Lumcloon application should be
treated the same as the Endesa ones (see later). More generally a
respondent wants a clear explanation of the circumstances by which
non-firm connection offers are made, either through Gate 3 or other
mechanisms, because it doesn’t want non-firm offers to be used as a
method to circumvent the application connection queue.
Commission’s Response
Renewable generation projects, be they intermittent or non-intermittent,
are not eligible for an offer under this criterion as it, along with the
paper generally, relates to conventional applicants only. However, the
non-intermittent renewable project in question is eligible for a firm offer
under a separate process decided on by the Commission recently in
CER/09/099 (see section 2).
Five generation projects were brought forward by the Commission last
year for eligibility for a non-firm offer because of a potential short-term
(i.e. for Winter 2009/10) security of supply need of 200 MW predicted at
the time. The projects were identified, in initial application received date
order, by reference to whether they could relatively quickly be
connected to the transmission system, providing a reasonable
contribution to short-term security of supply. This is detailed in the
Commission’s direction on the matter issued last year16. Whether the
projects would actually be operational by Winter 2009/10, or indeed
whether they would even accept the non-firm offers, could not have
been known at the time and was not a condition of offer issuance.
Indeed the Commission’s direction on the matter specifically made
reference to the fact that the identified projects were perfectly free not
to take up their offers. It was for this reason that in the order of 600 MW
of projects were selected for an offer to meet a potential 200 MW need.
However it still remains the case that these plants were at the time
16
Please see http://www.cer.ie/en/electricity-transmission-network-decisiondocuments.aspx?article=a66b0f9c-92af-4d29-ad0b-67c0b34f1e51
19
expected to be relatively easily accommodated on the system from a
security of supply perspective, so enabling those that haven’t rejected a
non-firm to receive a firm offer with Gate 3 meets the Commission’s
objectives of making efficient use of the transmission system and
facilitating optimal development of it. By recognising the ability of the
system to accommodate plant, it also meets the objectives of providing
for security of supply and competition.
Regarding the circumstances by which non-firm offers were issued, the
five generation projects were eligible last year for particular security of
supply reasons referred to above. The pumped storage plants were
directed by the Commission to be eligible for non-firm offers in 2007 on
account of their system benefits as detailed in directions available on
the CER website17. The Tawnaghmore plant was provided with non-firm
access as this was appropriate in the context of it initially being
developed at the site for security of supply, i.e. for short-term peaking
purposes, such that it would generally be used only when other
generation is not available - thereby making full firm access
uneconomic at the time. Part of the Endesa plant at Great Island is
assumed to be “non-firm”, pending allocation of a scheduled firm
access date as discussed in section 6 of this paper. More generally, the
Commission confirms that non-firm offers are not used as a method to
“circumvent” the application connection queue.
First 500 MW in ITC Programme Criterion
4.10
In relation to the second criterion for an offer, the “first 500 MW from the
ITC Programme”, one party requested clarification on whether the first
500 MW includes non-GPA plant or whether it is in addition to them.
Two respondents asked that the 500 MW threshold be increased to 700
MW in the interest of security of supply, given the risk of drop out
among some projects. One respondent also asked that, given that it is
highly unlikely that the threshold will be exactly met, a cut-off definition
around the threshold is provided. It suggests that the final direction
states that a straddling project would be included for an offer provided it
did not exceed say 10% of the threshold (i.e. so it would be included for
an offer if it did not exceed 550 MW). Alternatively the project could be
offered firm connection up to the threshold and non-firm up to 10%
above (i.e. again up to the 550 MW level).
Commission’s Response
Firstly, the Commission has clarified in section 5.13 of this direction that
the “first 500 MW” criterion for the issuance of conventional connection
offers is separate from those non-GPA applicants eligible for an offer
through the non-GPA process (see CER/09/099). In other words the
17
Please see http://www.cer.ie/en/electricity-transmission-network-decisiondocuments.aspx?article=c254af28-c1bc-495b-8695-35f41573773f & http://www.cer.ie/en/electricitytransmission-network-decision-documents.aspx?article=a9046b59-2032-4ba8-aae7-063b3d06eb3c
20
“first 500 MW” of conventional offers through this criterion is in addition
to applicants eligible for an offer under the non-GPA process.
The Commission continues to believe that 500 MW, rather than 700
MW suggested by two respondents, is an appropriate size for this
criterion. This is because, in combination with the other two criteria for
conventional offer issuance, it already provides an anticipated circa
2,000 MW of conventional offers issuing in this phase with Gate 3
(1,600 MW of generation plant plus one interconnector), which is
sufficient capacity to maintain security of supply for the short and
medium term even if there were some project attrition. To go
significantly beyond this level would be out of keeping with the “small
steps” approach which the Commission has decided to adopt on the
grounds of maintaining future flexibility in connections.
The Commission has specified, in section 5.13 of the direction, the
exact definition to be applied for a “straddling project” around the 500
MW threshold. As suggested this provides that a straddling project
would be eligible for an offer provided it did not exceed 10% of the
threshold, i.e. the total allocation of scheduled firm quantities under this
criterion does not exceed 550 MW. This is a proportionate step, to
provide clarity, and is in keeping with the spirit of the criterion.
Interconnection Criterion
4.11
The 3rd criterion to the “multi-dimensional” approach involves
recognising the strategic benefits of interconnection by providing for an
offer to be issued to an interconnector project. Most parties that
commented welcomed the Commission’s proposal in this area. One
saw it as the first step in the development of an Irish interconnection
policy which is needed to become part of an EU electricity market and
be a world leader in the export of wind energy. It will also allow for the
import of renewable electricity and therefore assist Ireland to meet
renewable and greenhouse gas emissions targets. However the
respondent says that the current approach still favours conventional
plant at the expense of interconnectors, and that interconnectors should
be dealt with outside of Gate 3. It also stated that it is important that
IMERA’s EW-1 project has a firm connection by 2013. One respondent,
while agreeing with the Commission’s view regarding the benefits of
interconnection, said that the Commission should check first if IMERA’s
EW-1 can proceed given financial issues, and another likewise
questioned the ability of anyone to deliver a merchant interconnector at
this time.
4.12
In contrast one respondent, while supporting further interconnection, is
not convinced that the Commission has set out the basis for giving
interconnection priority over renewable generators or flexible thermal
generators. Similarly another party said that the policy reasons for
supporting interconnectors for an offer appear somewhat arbitrary and
21
that generation could arguably provide greater security of supply than
interconnection.
Commission’s Response
The Commission has decided that an interconnector project will be
eligible for a connection offer as part of this process. The basis for this
was set out on the proposed direction (and is also in section 6 of this
direction) and is not arbitrary. It is in recognition of the strategic benefits
of interconnection which are not shared by generators, particularly the
facilitation of cross-border trade in electricity (such as wind power) both
into and out of the country. Indeed recent studies from the ESRI18 and
EirGrid19 have referenced the strategic benefits of interconnection
where there is a high wind penetration. However the Commission does
not believe that interconnection should be treated through some
separate connection regime from all other generator applicants as has
been suggested by one respondent. The reality is that transmission
capacity allocation is a scarce and valuable resource, and will be for
many years at least until major transmission upgrades and expansions
are complete, for example as planned through EirGrid’s Grid25. In the
meantime, while recognising the strategic benefits of interconnection,
the Commission still has to consider other connection applicants in the
connection queue and the impact on them when considering whether to
advance an interconnector project. The Commission believes that its
decision for this phase, whereby it is providing for an offer to be issued
to an interconnector application with its scheduled firm access to be
devised in the ITC Programme in initial application received date order
as with all other relevant applicants, is a fair approach. It balances
recognition of the strategic benefits of interconnection with the desire
not to have a disproportionate impact on other applicants in the
connection queue.
For reasons discussed in both the proposed direction and section 5 of
this direction, the Commission has decided that advanced evidence of
financial capability is not a requirement for conventional applicants to
receive an offer with Gate 3, and this includes interconnector projects.
Other Offer Selection Criteria
4.13
One respondent pointed to the need for flexible mid merit or peaking
conventional generation plant on the system to balance wind, and said
that the Commission has the legal basis to actively select flexible
generation. It also said that this process provides an opportunity to
ensure that all conventional generation are Grid Code compliant.
18
Please see http://www.esri.ie/publications/search_for_a_publication/search_results/view/index.xml?id=2808
19
Please see http://www.eirgrid.com/media/Further%20Interconnection%20with%20Britain%20is%20Economically%2
0Attractive.pdf
22
Commission’s Response
The Commission agrees that flexible mid merit or peaking generation
plant can provide system benefits by balancing out wind, which is an
intermittent and relatively unpredictable power source. The SEM
Committee is dealing with the remuneration and incentivisation of
peaking plant in the context of the Capacity Payment Mechanism
review and in relation to Ancillary Services. However the Commission
must also act to keep the end cost of electricity at a fair and reasonable
level, and in this regard it notes that peaking plants typically provide
more expensive electricity than baseload ones. As stated previously the
key issue is that the generation portfolio is balanced, between
renewable and conventional plant, and also between peaking and
baseload ones. It is not necessary for the Commission to “actively
select” such flexible generation because the “multi-dimensional” criteria
for selecting conventional applicants for an offer with Gate 3 provide the
desired balanced generation portfolio. This is considering that with
these criteria baseload and flexible peaking plants - OCGT and pumped
storage - will receive an offer. This is in addition to an interconnector
project which can allow for wind to be balanced by providing
opportunities to both import and export power on to the system at times
of low and high wind respectively.
Regarding Grid Code compliance by conventional plant, the
Commission considers this important both to maintain a safe, secure
and reliable supply of electricity and to ensure fairness between all
market players, conventional and non-renewable. Therefore Grid Code
compliance is already - and will continue to be - a key requirement for
any new generator connecting to the transmission system. All existing
conventional plant are required to comply with the Grid Code and
EirGrid will increasingly be monitoring generator performance to help
ensure that this is the case. Derogations for conventional plant from the
Code, as with renewable plant, will only be granted by the Commission
on an exceptional basis and under limited circumstances.
Asset Strategy Programme
4.14
In the proposed direction the Commission proposed that, to uphold the
CER/ESB Asset Strategy, “immediate” firm capacity would be provided
to Endesa for its 285 MW connection application at Tarbert, with 216
MW of firm capacity likewise provided to Endesa’s Great Island plant. It
proposed that Endesa’s extra 215 MW applied for at Great Island would
be eligible for an offer as this is considered as non-firm capacity
pending allocation of firm access in the ITC Programme. This is with an
assumed initial application received date of 16th June 2008, the date of
its bid for the plant under the Asset Strategy. In response, one party
welcomed the Commission’s proposal regarding pre-existing firm
connection rights at Tarbert and Great Island, saying this was
envisaged as part of the Asset Strategy. It also welcomed the proposal
that the application date for the additional capacity at Great Island be
23
considered in the context of the date of Endesa’s bid for the plant given
that it was not in a position to apply for connection until the final
purchase contracts were signed. Furthermore it stated that the Great
Island project is able to be readily accommodated on the network and
will reduce the level of reinforcement required in the area, enhancing
security of supply. Another respondent similarly strongly agreed with
the Commission’s proposal regarding the Asset Strategy and Endesa. It
requested that its Lumcloon application at the old ESB Ferbane site be
treated in the same manner as it should not be distinguished from the
Asset Strategy or the Government White Paper on energy. It believes
that the same rationale that the Commission uses to support the
preferential treatment of Endesa can be applied to the Lumcloon
project.
4.15
In contrast, one respondent said bringing forward the connection
application date for Great Island to the Endesa submitted bid date is not
permitted under the Asset Strategy, could not have legitimately been
expected by Endesa, is an attempt to increase its market share and will
disproportionately disadvantage IMERA’s prior interconnector
application at Great Island. It says it is ultra vires for the Commission to
make a direction that will impact on IMERA’s interconnector application
and introduces regulatory uncertainty. The respondent stated that it will
be obliged to take legal action to protect this interconnector application
unless it receives certainty from the Commission that sufficient capacity
is available for its project and that it will not experience delays. Another
respondent repeated its concern with the proposed treatment of the
Endesa plants, believing that it is in clear breach of Irish and EU law for
reasons as set out in response to the consultation paper (see summary
of comments in proposed direction). It urged the Commission to
reconsider its position on this issue and asked for an express
confirmation that no assurances were given to Endesa as part of the
bidding process that were not given to others.
4.16
One party expressed general concern with the Commission’s proposal,
stating that it creates a precedent whereby existing generators are
brought to the front of the queue for firm capacity when they are
repowering, to the detriment of new entrants. Another similarly stated
that the proposal creates a precedent regarding the allocation of
capacity rights to units that are re-powering with a higher capacity, and
this should apply to future sites being repowered. It said that the final
decision should give clarity in this regard.
4.17
Another respondent disagreed that Endesa was not in a position to
apply for a connection offer earlier - it says the vendor could have done
so. It believes that earlier connection of Endesa should only be allowed
to the extent that it does not impact on existing or contracted or already
queued users’ constraint levels or connection dates. The respondent
asked that any constraints impact of the proposed Endesa re-powering
on existing, contracted or Gate 3 generation be made known, at the
very least to the connected parties. Staying with constraints, another
24
respondent said that it understands Gate 2 constraint studies to have
no regard to the re-powering of Tarbert and Great Island. It believes
that the Tarbert re-powering with a higher running factor will alter power
flows in the SW and thereby lead to material deviations from the Gate 2
constraint studies.
Commission’s Response
To begin with, and as discussed in the consultation paper, the
proposed direction and in section 6 of this direction, the treatment of
Endesa’s plants at Great Island and Tarbert is in the context of the
CER-ESB Asset Strategy Agreement. The Lumcloon site at Ferbane
was purchased from ESB in circumstances unrelated to ESB’s
obligations under the Asset Strategy Agreement. The CER-ESB Asset
Strategy is to implement the Government’s White Paper on energy20,
which sets out Ireland’s energy policy framework to 2020. The White
Paper refers to “the transformation of the generation portfolio between
2007 and 2013 through the CER-ESB Agreement on planned
divestment of 20% of existing ESB conventional plant portfolio by 2010,
matched by the provision by independent operators of replacement
conventional plant…”. Clearly, it is divestment of existing generation
plant that is referred to and not empty sites like the one at Ferbane, as
it is divestment of existing plants that is needed to reduce ESBs market
share and provide for competition. The Asset Strategy, which Lumcloon
is not part of, achieves this by providing for the divestment of existing
“brownfield” ESB power stations (not sites only) in order to reduce
ESB’s market share and thereby promote competition in the market, to
the benefit of the end customer of electricity.
Therefore both in terms of the specifics of the Asset Strategy and its
general intent, the Lumcloon site at Ferbane does not satisfy the
rationale associated with treating the Endesa projects in the way set out
in this direction. Accordingly the Commission is not proposing to bring
forward applications for connection to sites acquired from ESB which
were not part of the Asset Strategy. Nor is the Commission proposing
to do so for other existing plants (renewable or conventional) which
may seek to re-power in the future. In other words, this is not precedent
setting as referred to by two respondents, but rather is a decision been
taken in the context of the Asset Strategy only. Future applications for
re-powering will be examined on case-by-case basis, taking account of
the benefits of such re-powering and the likely impact on other parties
connected or seeking to connect to the network. This is also clarified in
section 6.12.
The reasoning for bringing forward the initial application received date
at Great Island to the Endesa submitted bid date of 16th June 2008 is
detailed in section 6. The Commission rejects the argument that this is
ultra vires. The circumstances surrounding the Asset Strategy and
20
Please see http://www.dcenr.gov.ie/Energy/Energy+Planning+Division/Energy+White+Paper.htm
25
Endesa’s applications are different to other connection applicants for
reasons discussed in the proposed direction and in section 6.10 of this
paper. The Commission was clear in its Gate 3 direction of December
2008 that it did not propose to establish an application process for
conventional generation projects which ignored the overall objective of
the Asset Strategy Agreement. The Commission also stated in the Gate
3 direction that it would only “bring forward” projects for connection that
were warranted on the grounds of their wide system/public benefit and
where this would not have a disproportionate impact on other
applicants. This must be read in the context of the stated determination
on the part of Commission to take account of the overall objective of the
Asset Strategy Agreement. This is because delivery in full on that
Agreement is entirely consistent with Government policy and the
Commission’s obligations under its statute to promote competition in
the generation and supply of electricity. The forthcoming energisation of
ESB’s new Aghaha plant was authorised by the Commission only as a
quid pro quo for successful delivery of the divestment and re-powering
of ESB plant such as was contained in the Asset Strategy Agreement.
Therefore, if the Asset Strategy is not successful, ESB’s market share
could in fact be increased, which would be contrary to Government
policy and the Commission’s duty to promote competition. The
Commission’s treatment of Endesa’s applications recognises this reality
and also the special circumstances surrounding the bidding process
whereby Endesa was not in a position to apply for a connection offer
until it had emerged as a preferred bidder and had signed, or was near
to signing, the purchase contracts. This would have been the same for
any bidder. In response to one respondent, the Commission confirms
that no assurances were given to Endesa as part of the bidding process
that were not given to others. In addition, had the vendor submitted a
connection application in advance of the final successful bid party being
known, as referred to by another respondent, it would have by definition
been a purely speculative one. The Commission does not condone or
encourage such application as they result in a slower and less efficient
connection process for more serious applicants.
Finally, regarding the constraints queries, previous constraint studies by
EirGrid, undertaken on certain assumptions, indicated that the Endesa
re-powering connection applications are not expected to have a
material adverse impact on the level of constraints borne by wind farms
already connected or contracted to connect - including for Gate 2 wind
farms with non-firm access. However an important consideration on this
issue is the all-island dispatch rule-set which was recently published for
consultation21. The final dispatch rule-set decided on will have a direct
impact on the matter and for information a proposed decision in this
area is planned to be published by March 2010.
21
Please see the recent consultation paper:
http://www.allislandproject.org/GetAttachment.aspx?id=54a53952-22c8-4196-975f-fe9ab14ec2a5
26
Details on ITC Programme & Scheduled Firm Access
4.18
A respondent asked that the ITC Programme allocate scheduled firm
capacity not on the applicant’s full MEC basis but on per unit basis in
order to help ensure that the correct projects are facilitated in the
system. Another respondent requested that the final direction clarify
that unsuccessful conventional applicants removed from the ITC
programme will have the option of remaining in the connection queue
for future processing.
4.19
A respondent asked that the final direction include a confirmation that
an applicant successful for an offer though the ITC Programme will then
not be removed for an offer as a result of the constraints analysis, but
rather it could alter the scheduled firm date order of successful
applicants. One respondent said that a table showing the two methods
for allocating scheduled firm access (and in many cases a connection
offer) would be useful.
4.20
Two respondents asked that the scheduled firm quantities are not only
publically provided for conventional applicants that are entitled to an
offer, but for all conventional applicants in the ITC Programme out to
2025. It was acknowledged that this would be on a non-committal
basis, but it would provide a level of transparency as to the capability of
the transmission system to add future new generation capacity.
4.21
A respondent said that deemed firm access should be introduced so
that projects are left financially neutral even if grid delivery does not
proceed to schedule.
Commission’s Response
Regarding allocation of scheduled firm capacity, this is done on an
applicant’s MEC in initial application date order using the ITC
Programme. The direction published with this paper, CER/09/192
provides clarity on the treatment of applications for “MW phases”.
It is clarified in section 5.19 of this direction that unsuccessful
conventional applicants removed from the ITC Programme will remain
in the connection queue for future processing. Section 5.21 of this
direction includes confirmation an applicant successful for an offer
through the ITC Programme would not be removed for an offer as a
result of the constraints approach to the derivation of scheduled firm
quantities. Instead this can “bring forward” the scheduled firm
connection dates for those projects already entitled to an offer.
The ITC Programme results will be provided by EirGrid to interested
parties whose applications have been unsuccessful (under the offer
criteria) if so requested. This is in order to aid transparency. It should
be noted that because these projects are removed from the Programme
once those that are entitled to an offer are provided for (see Appendix
27
2), the information will be incomplete. Furthermore it will be subject to
significant change into the future.
The consultation paper on SEM dispatch principles referred to how
“deemed firm access” system, whereby a generation project would
receive firm access to the transmission system by a certain date
irrespective of whether the associated deep transmission
reinforcements have actually been completed, will not be provided for.
This issue will be finalised in the context of the SEM decision on this
matter. It should be noted the constraints analysis discussed in section
5 will bring forward the scheduled firm connection dates (from ITC
Programme derived quantities) for relevant applicants where it is
economic to do so, to the benefit of both the generation project and the
end customer.
Programme / Offer Timelines
4.22
One party recommended that scheduled firm access dates for the years
2010 to 2013 should not be published in September but rather after the
Commission’s publication of the final direction.
4.23
Regarding the timelines for offer issuance, a respondent referred to a
delay risk. It stated that given that some of the conventional applicants
eligible for an offer could be connected to the distribution system and
that the timeline for the delivery of shallow connection information from
the DSO to TSO is well in advance of offer issuance, a delay in
determining which applicants are eligible for an offer could delay
connection offers to some of the conventionals compared to the Gate 3
renewables of the same group.
4.24
One respondent welcomed the reduction in offer acceptance time from
70 to 50 business days. Another respondent asked that the time
permitted for connection offer acceptance is modified to the later of 50
business days or the publication of the SEM Decision on the Principles
of Dispatch and Design of the Market Schedule. This is given the
impact this Decision could have on project viability. Alternatively it
suggested that the connection offers includes a clause which allows
participants to withdraw in the event that the Decision changes the
basis on which the investment decision was made.
Commission’s Response
The Commission agrees that it is more appropriate to publish the
scheduled firm quantities after rather than before the final direction as
otherwise there would be a risk that the information presented would no
longer be applicable. As a result the scheduled firm quantities for the
years 2010 to 2013 are published along with the 2014 to 2017 dates
with this paper. Further details on the timelines for later years are
available in section 7.
28
The risks around the conventional offer timelines depend on which
conventional applicants are included within the first “500 MW” offer
issuance criterion (see section 5). So far, based on emerging ITC
results, it looks like conventional applicants eligible for an offer will be
issued an offer along with other Gate 3 parties in the areas in which
they are located.
If a final decision in relation to SEM Scheduling, Dispatch and Access
has not been published by the time offers/constraint information has
been issued (as will be the case for offers early in the offer
programme), the Commission has decided that the 50 business day
offer timeline will not commence until that decision has been issued.
This is because this decision, which is expected in the Summer
(following a proposed direction in March), may impact on SEM rules
which are of relevance to parties when deciding whether or not to
proceed to connection. For clarity, this will apply to both conventional
applicants and Gate 3 renewable applicants receiving an offer.
Next Phase(s) of Conventional Offers
4.25
In the July proposed direction the Commission said that it would consult
in the first half of 2011 on the criteria for deciding which conventional
applicants would receive an offer in the next phase(s) to the current
Gate 3 process. This was welcomed by many parties, though two
respondents would prefer a consultation to begin in 2010, with one
saying there should be an annual process for determining grid
connections using a set of well defined criteria, to allow for
transparency and efficiency.
4.26
In terms of the criteria in the next phase(s), one respondent requested
that an examination of “backfilling” (of offers not accepted in this phase)
extends to conventional applicants that have not accepted offers prior
to Gate 3. In contrast another respondent said that a consultation on
“backfilling” is misguided as it introduces developer risk (instead this
phase should have a higher capacity of offers).
4.27
One party advocated the requirement for a financial bond for parties to
receive an offer in the next phase in order to diminish the level of
speculative connection applications. Similarly another regrets that no
advanced commitment is required for an offer in this phase and
advocates that for future phases evidence of project commitment is
required, including a bond and evidence of EIA services. It also stated
that planning permission should be a condition precedent in the
connection agreement and that the agreement should generally lapse if
applicants cannot provide evidence of planning permission within one
year of signing the agreement. One party asked the Commission to reconsider the requirement for developers to present a business case to
the Commission for consideration for this phase, and to consider ruling
out applicants if a project does not meet environmental standards with
respect to carbon output. It also specifically stated that each of the
29
small steps should be about six years duration as the likelihood of
buoyant economic recovery will raise security of supply issues.
However it did ask that a “back-up plan” be considered now and not in
2011 with respect to offers. One respondent referred to how a re-run of
the ITC Programme in two years time should be formalised as Gate 4
and include renewable projects, and that it is vital that all renewable
projects outside of Gate 3 get processed.
Commission’s Response
The Commission will commence a public consultation on offer issuance
criteria for the next phase(s) in the first half of 2011. This is because, as
previously stated, this is the earliest stage when the take up rate of both
Gate 3 renewable and conventional offers issuing in this phase will be
known or predicted with a reasonable degree of certainty given that
offers are intended to issue until June 2011. This take-up rate may
have a major bearing of the capacity of offers issuing in a future
phase(s), and on the criteria for selecting applicants for an offer, and so
it is important that we have some idea of this before advancing
proposals. The Commission will consider providing for both backfilling
and/or forms of advanced project commitment (including financial
commitment) at the time. No decision has been made on these issues
or on criteria for offer issuance more generally for a future phase(s),
which could be very different from this phase. In any event it will be
subject to public consultation, commencing in the first half of 2011, in
advance of a final decision.
The reasoning behind not requiring financial or other forms of advanced
commitment for an offer in this phase is explained in section 5 of this
direction.
Finally, the Commission confirms that the consultation in the first half of
2011 will not only examine future conventional offers but also
renewable ones as well, i.e. Gate 4, again in the context of the
renewable offer take-up rate known or predicted at the time. This is
referred to in section 5.
Other Issues Raised
4.28
A respondent pointed out what it believes may be a typo in the capacity
indicated for an applicant in Appendix 1 to the proposed direction. It
believes that the capacity for applicant TG161 may be 220.5 MW rather
than the 202.5 MW shown. It asked that the Commission ensure that
the correct figure is shown in the final direction.
4.29
A respondent said that small developers should be treated fairly and
pointed out that the recent decision on the “Treatment of Small,
Renewable and Low Carbon Generators outside of the Group
Processing Approach” allows small wind of less than or equal to 0.5
MW be treated for an offer outside the GPA, while for small
30
conventional the limit is 5 MW. It also said that off-shore potential
needs to exploited.
4.30
Two parties asked that the connection position of the proposed Quinn
CCGT plant be clarified - information was requested on how long the
live offer is valid and the basis for the Commission’s assumption that it
will be accepted.
Commission’s Response
TG161 has a capacity of 220.5 MW and this is what applies for the
applicant in the ITC Programme according to EirGrid. The capacity for
this applicant shown in Appendix 1 to the proposed direction, as
submitted from EirGrid, was an error and the current list of conventional
applicants (see Appendix 1) shows the correct 220.5 MW capacity.
The provisions as set out in the paper “Treatment of Small, Renewable
and Low Carbon Generators outside of the Group Processing
Approach” (CER/09/099) that apply to wind projects with an MEC of
less than 0.5 MW. Wind projects more generally are catered for in the
Gate 3 process which allows for circa 3,900 MW of wind projects to
receive an offer. The CER/09/099 process does cater for conventional
applicants less than 5 MW. For these sized projects interaction studies
will be performed. If no interactions are found to exist then they can
proceed to be given a connection offer. If interactions do exist then the
conventional project will remain in the queue. Please refer to pages 4
and 5 of paper CER/09/099.
The issue of off-shore wind was dealt with as part of the Gate 3
consultation process and it should be noted that there is about 780 MW
of off-shore wind included in Gate 3.
The Commission does not wish to discuss the details surrounding the
Quinn connection offer for confidentiality reasons. However, we note
that the Quinn connection offer has recently been executed, so that
assumption has shown to be realistic.
31
5.
Selection of Conventional Generators
5.1
Taking on board comments received to the proposed direction
(summarised in section 4 above), this section sets out in detail the
criteria for deciding which conventional applicants will receive a
connection offer in tandem with the Gate 3 offer programme (for
renewable generators), and on what basis. These proposals take
account of the guiding objectives for this process shown in section 2
and the Commission’s relevant statutory responsibilities shown in
section 3.
Conventional Plant for Security of Supply
5.2
The Commission is, as stated in the previous consultation papers,
committed to achieving its statutory functions to promote renewable
generation and to take into account the protection of the environment.
The group processing and “Gate” connection regime, which is approved
by the Commission, has facilitated a dramatic increase in the level of
renewable generation connected or contracted to connect to the Irish
system, from circa 400 MW in 2004 to 2,800 MW currently. The vast
bulk of this renewable capacity is in the form of wind power. This
means that Ireland is already on track to meet and exceed the
Government’s target of 15% of electricity coming from renewable
sources by 2010. This is related to the success of Gates 1 and 2.
5.3
Even as far more renewable generation projects have connected to the
system in recent years, it is also the case that the level of renewable
connection applications has continued to increase significantly. The
Commission sees this as an encouraging sign for the future of
renewable energy in Ireland. However, the scale of the applications
received by EirGrid and ESB Networks Limited does unfortunately
create practical difficulties because the electricity network is quite
congested and cannot accommodate the connection of all applicants at
this time.
5.4
In this context 3,900 MW of renewable generation applicants are
eligible for a connection offer from this month in the Gate 3 offer
programme, with a view to achieving the Government’s 40% target for
2020, as detailed in the recent Gate 3 direction. Adding this to
renewable generation already connected or contracted to connect (as
in section 5.2 above), it means that there will be potentially over 6,500
MW of renewable generation connected to the Irish system by 2020.
However, even after this big step, it is acknowledged that there are
currently still a large number of renewable generator connection
applications that will have to wait until Gate 4 or beyond before their
applications will be processed for connection.
5.5
It is the case that some of such renewable applications may “pre-date”
the conventional applications. These renewable applicants consist
almost entirely of wind farm projects which are intermittent and less
32
predictable in output than other forms of generation. Therefore they are
not sufficient to ensure that electricity demand is met in a secure
manner. Maintenance of a safe, secure and reliable supply of electricity
is vital for electricity demand customers and the country in general.
Consequently, in order to protect electricity security of supply, it is
necessary to ensure that a mix of energy sources (other than wind on
its own) is connected to the network. This means that conventional
generation, which is a predicable form of generation output, is required
in order to maintain security of supply, i.e. to “keep the lights on”. As
noted in section 3, one of the Commission’s statutory duties is to
ensure that security of supply is protected by taking such measures as
are necessary to do so. In accordance with this duty and the
Commission’s objectives for this process, the Commission considers
that processing a number of conventional applications alongside
renewable generation in Gate 3 is therefore required in order to protect
long term security of supply.
5.6
That said, the Commission will direct EirGrid to make connection offers
to conventional applicants only to the extent as is necessary to meet
security of supply requirements. Processing all of the circa 6,000 MW of
conventional connection applications received by the date of the Gate 3
direction for offer issuance would be a cause for concern because:
•
•
It would mean that more conventional applicants than are
necessary to provide public interest benefits, such as the country’s
security of supply, would be issued with an offer ahead of
renewable applicants who applied for connection beforehand and
which are not in Gate 3. It could be argued that this would be
unfairly discriminatory to these prior renewable applicants; and,
EirGrid’s Grid25 may in any event not be able to provide many of
these applicants with firm connection within the 2025 period as they
would represent more than is needed to 2025 to meet security of
supply. This could mean that some of the conventional projects
would be operating on a non-firm basis for a very considerable
period, i.e. up to and beyond 2025.
Size of Maximum Conventional Capacity to 2025
5.7
EirGrid has advised the Commission that, using certain assumptions, in
the order of 3,400 MW of additional conventional plant may be needed
to maintain Ireland’s security of supply standards at acceptable levels
to 2025. The assumptions behind this figure for 2025 were provided in
the consultation paper.
5.8
On this basis, in order to maintain security of supply at adequate levels
to 2025, a maximum of 3,400 MW of conventional projects is
considered for an offer along with Gate 3 renewable generators. It is
considered that this would not be unfairly discriminatory against prior
renewable applicants. This is because this is the capacity of
conventional projects that is needed in the interests of the wider public
33
interest, i.e. to maintain security of supply, which is one of the
Commission’s key legislative duties and one of the key objectives of the
Commission in this process.
5.9
This 3,400 MW maximum will be kept under continual review. It will be
subject to change by the Commission as warranted, for example due to
changing demand growth assumptions impacting on the expected longrun required conventional generation.
Take Small Steps to 2025
5.10
The proposed direction proposed that instead of all of the 3,400 MW of
conventional projects receiving a connection offer as part of the Gate 3
offer programme in a “big bang”, only a subset of the 3,400 MW should
do so under a “small steps” approach. Similar to the responses on this
issue to the consultation paper, once again respondents advocated the
“small steps” approach over a “big bang” (see section 4).
5.11
The Commission agrees that a “small steps” approach to this matter is
most appropriate, for a number of reasons. It will allow the remaining
conventional connection applications that do not receive an offer in this
phase, as well as those connection applications not yet received, to be
separately considered for offer issuance/connection in the future. What
this provides is, crucially, future flexibility, which is one of the
Commission’s objectives in this matter. It reduces the chances of
“locking in” long-run generator connections to 2025 with 3,400 MW of
today’s applicants and technology. By “holding back” some of the 3,400
MW for future phases, it keeps open the ability to connect potentially
new and more cost effective, flexible, diversified (from a fuel
perspective), reliable and/or environmentally friendly generation. It will
provide the transmission system with the potential to accommodate up
to 2025 technological advances in conventional generation between
now and then, some of which are known possibilities such as “clean
coal technology” and some which have not even been invented yet,
ultimately to the benefit of the environment and the end-customer. It
also has the advantage of being able to consider the longer-term
connection of conventional projects when information is to hand on the
take-up rate of Gate 3 renewable offers, which will impact on the
availability of network capacity for such projects.
5.12
The approach for the subsequent phase(s) of conventional offers can
be facilitated by re-running the ITC Programme, and then applying
whatever criteria is decided upon for offer issuance for that phase. Of
course the criteria for selecting conventional projects in the next
phase(s) would be subject to a separate consultation closer to the time.
This consultation process would be expected to commence in the first
half of 2011, as this is the earliest stage when the take-up rate of Gate
3 renewable offers and conventional offers can be predicted or known.
In addition to conventional connection offers for a subsequent phase(s),
this consultation in the first half of 2011 will also consider what next
34
steps there will be in relation to renewable connection offers, and the
take up rate on Gate 3 offers will also be relevant in this regard. The
paper will consider providing for “backfilling” if conventional applicants
or renewable applicants eligible for an offer in this phase (i.e. with or as
part of Gate 3) do not accept their offers.
Criteria for Conventional Connection Offers
5.13
In keeping with small steps, a “multi-dimensional” approach will be
applied in selecting conventional projects for an offer with Gate 3
renewables. This was proposed in the proposed direction and
respondents broadly welcomed it (see section 4). Through this
approach, conventional projects will be selected for an offer with Gate 3
renewables using the following three criteria:
1. All those generating projects which have received a non-firm offer and not rejected it - as well as those already connected which are
non-firm or partially firm. This includes five generation projects,
totaling in the order of 600 MW, eligible for a non-firm offer on foot
of a Commission direction last year22. The five generation projects
were selected by the Commission, in application date order, on the
basis that they can be relatively easily accommodated on the
transmission system and contribute to security of supply, so
selecting them for a firm offer makes efficient use of transmission
infrastructure and facilitates optimal development of it23. In addition it
includes two pumped storage generating plants also given non-firm
approval by the Commission24.
As per the above it was assumed that these non-firm projects could
have been relatively easily accommodated on the transmission
system, and to a large degree this remains the case, so selecting
them for a firm offer makes efficient use of transmission
infrastructure and facilitates optimal development of it, which is one
of the Commission’s objectives for this process. It is also simple
and transparent, and, by recognising the ability of the system to
accommodate the generating plant, will help contribute to
competition and security of supply in a timely manner. In view of
this and the general desirability not to have plant on the system on
an enduring non-firm basis, as the system by definition will not be
able to use these generators’ output to the same extent as
generators with firm access (and the SEM is not designed with this
in mind), it is consistent with the Commission’s objectives for this
issue that they receive a firm offer.
22
The 5 projects are: Suir 98 MW OCGT; Caulstown 58 MW OCGT; Cuileen Power 98 MW OCGT;
Edenderry 116 MW OCGT; Kilbride 280 MW OCGT. Please see
http://www.cer.ie/GetAttachment.aspx?id=1ce9dba5-70fa-4487-83d1-8d6f4f9ba288
23
While the security of supply deficit risk has abated recently on account of lower demand growth, the
principle that they can be relatively easily accommodated on the transmission system remains.
24
Please see http://www.cer.ie/en/electricity-transmission-network-decisiondocuments.aspx?article=c254af28-c1bc-495b-8695-35f41573773f & http://www.cer.ie/en/electricitytransmission-network-decision-documents.aspx?article=a9046b59-2032-4ba8-aae7-063b3d06eb3c
35
For similar reasons the projects already on the network with nonfirm or partially firm access which would also be eligible for an offer
would be the 104 MW peaking plant at Tawnaghmore and the
“extra” (i.e. which is above current network capacity) 215 MW
applied for by Endesa at Great Island. The latter assumes
“immediate” firm capacity being provided to Endesa for its 285 MW
connection application at Tarbert, with 216 MW of firm likewise
immediately provided to Endesa’s Great Island plant. This is
consistent with these sites’ current firm connection capacity and is
to uphold the integrity of the CER/ESB Asset Strategy. Endesa’s
extra 215 MW applied for at Great Island will therefore be eligible
for an offer as this is considered as non-firm capacity pending
allocation of a scheduled firm access date and the associated
completion of the ITC Programme. Please see section 6 for further
details on the CER/ESB Asset Strategy; and,
2. The first 500 MW of applicants with the earliest scheduled
transmission firm connection date for their full requested Maximum
Export Capacity (MEC), in addition to the projects eligible for an
offer through (1) above, as indicated by the ITC Programme. This is
in addition to those non-GPA applicants eligible for an offer through
the non-GPA process (see CER/09/099). The approach recognises
the ability of the transmission system to accommodate the projects’
output in the short to medium term and it means that those plants
that can be connected to the transmission system on a firm basis
relatively speedily, thereby contributing to security of supply and
electricity market competition most quickly, will be eligible for an
offer. It also makes efficient use of transmission infrastructure (both
existing and planned capacity) and facilitates optimal development
of it, as it means that offers issue to those projects which require the
least deep transmission upgrade works, thereby meeting another of
the Commission’s objectives. The results of the ITC Programme are
to be published by EirGrid - and the first set of results are provided
with this paper - so it will be transparent as to which plants have a
firm connection offer on this basis. For clarity, scheduled firm access
is allocated on an annual basis through the ITC Programme, so it is
unlikely that 500 MW will be reached exactly in a particular year. If
the ITC Programme allocates capacity to more applicants than are
necessary to satisfy this 500 MW criterion in any one year, the
applicants shall be chosen in initial application received date order
up to the first project that brings the total MEC above 500 MW
assuming that this threshold is not exceeded by more than 10%, i.e.
the total allocation of scheduled firm quantities under this criterion
does not exceed 550 MW. This is in keeping with the spirit of the
criterion; and,
3. In recognition of the strategic benefits of interconnectors associated
with the cross border trade in electricity, an interconnector with the
earliest full scheduled firm access date as determined by the ITC
36
Programme will be eligible for an offer. This is likely to be IMERA’s
350 MW application for an east-west interconnector at Arklow. It
should be noted that the firm connection date for this interconnector
from the ITC Programme will be using the initial application
received date order methodology as with all conventional
applicants. This is a proportionate step, recognising the benefits of
interconnectors but also that they cannot be viewed in isolation to
generator applicants in what is a congested network. The
Commission is of the opinion that its proposal strikes a balance
between the public interest, legislative and policy objectives sought
to be achieved in Gate 3, and that there will not be a
disproportionate impact on other applicants in the connection
queue. Please note that this interconnector issue is discussed in
more detail in section 6.
5.14
Overall, the “multi-dimensional” offer criteria are in accordance with
“small steps” and the Commission’s objectives for this process. It
means that those conventional projects that can be connected to the
transmission system on a firm basis in the short and medium-term will
receive an offer, with benefits as explained earlier. It provides for circa
1,600 MW of conventional generation plant connection offers being
issued in this phase with Gate 3, in addition to one interconnector
project. In other words it is anticipated that about 2,000 MW of
conventional connection offers will issue as part of this process, along
with circa 3,900 MW of Gate 3 renewable connection offers, all over the
coming 18 months (see section 7).
5.15
Conventional applicants that are eligible to receive an offer will be
required to pay the standard processing fee. Further details of the
processing fee are provided in sections 5.27 and 5.28.
5.16
The criteria for selecting conventional projects for an offer in the next
phase(s) will be subject to a separate consultation closer to the time.
This is expected to commence in the first half of 2011, as this is the
earliest stage when the take-up rate of Gate 3 renewable offers and
conventional offer can be predicted or known. In addition to
conventional connection offers for a subsequent phase(s), this
consultation in the first half of 2011 will also consider what next steps
there will be in relation to renewable connection offers, and the take up
rate on Gate 3 offers will also be relevant in this regard. The paper will
consider providing for “backfilling” if conventional applicants or
renewable applicants eligible for an offer in this phase (i.e. with or as
part of Gate 3) do not accept their offers.
Scheduled Firm Access Quantities
5.17
Scheduled firm access dates will initially be determined for the
conventional applicants eligible for an offer and the Gate 3 renewable
projects using the ITC Programme (see section 2 for a background),
with an initial application date order methodology (see next). Details of
37
the assumptions used in the ITC Programme are published in Appendix
2.
5.18
In relation to the particular application date order methodology to be
applied in the ITC Programme, and as detailed in the direction
published with this paper entitled “Direction on Detail for Allocating
Scheduled Firm Access in Gate 3 ITC Progamme”, CER/09/192, Gate 3
renewable projects in the ITC Programme are allocated scheduled firm
capacity by EirGrid using their “initial application received” dates. This is
instead of final “receipt dates” as was intended by the Commission in
the Gate 3 direction. For reasons explained in CER/09/192 the
Commission has decided that “initial application received” dates are to
be used for the allocation of scheduled firm capacity to renewable
applicants in the ITC Programme. For clarity, conventional applicants
are likewise allocated scheduled firm capacity in the ITC Programme by
EirGrid using “initial application received” dates. This was intended by
the Commission as referred to in section 8.3 of the Gate 3 direction, i.e.
conventional applications were included in the ITC Programme by
reference to their application “submitted date”. It was intended to apply
this approach for conventional applicants (rather than final “receipt
dates” for renewable applicants) because, due to the high volume of
conventional applications received by EirGrid in the second half of
2008, there would have been a likelihood of undue delay in starting the
ITC Programme if each application were to be fully assessed for
completeness prior to inclusion, thereby holding up the issuance of
offers under Gate 3.
5.19
Once scheduled firm access is allocated to the above conventional
projects eligible for an offer, the rest are removed from the ITC
Programme to free up capacity for Gate 3 renewables and speed up
the ITC Programme running time. The ITC Programme will not be restarted to re-allocate partial capacity to applicants not eligible for an
offer. The exceptions to the removing of applicants from the ITC
programme are small-scale (< 5 MW) generation projects,
autoproducers or non-wind renewable projects outside the GPA, which
will not be removed from the ITC Programme (once scheduled firm
bdates are allocated to the large scale ones). This is because, given
their potential public benefits, these projects are considered for firm
offer issuance separately in the context of a decision recently published
by the Commission, in CER/09/09925. For the avoidance of doubt,
unsuccessful conventional applicants from this phase (removed from
the ITC Programme) that have not been offered a connection will
remain in the connection queue for potential eligibility for the next
phase(s) of offers.
5.20
The first eight years of audited scheduled firm access quantities from
the ITC Programme, i.e for the years 2010 to 2017, for applicants
25
Please see http://www.cer.ie/en/electricity-distribution-network-currentconsultations.aspx?article=d1dda12a-378f-4d96-bf82-d1883d8111c1
38
potentially eligible for an offer are published with this paper. The
remainder are intended to be published in accordance with timelines
detailed in section 7.
5.21
In addition, EirGrid will apply criteria for the advancement of scheduled
firm access quantities, for both Gate 3 renewable projects and the
conventional projects eligible for an offer, which will examine the cost of
alleviating transmission constraints (via transmission reinforcements)
versus the cost of incurring the constraint costs. This is the underlying
basis with which EirGrid will determine transmission reinforcements
associated with a generator. It recognises the reality that when building
the network, EirGrid, in keeping with its functions as licensed
transmission system operator, develops the transmission system
efficiently. This means that EirGrid would not develop a transmission
reinforcement solely for a connecting party where the cost of that
reinforcement is greater than the anticipated cost incurred by not
building it. In recognition of this reality, the criteria may therefore bring
forward the firm connection dates for the projects eligible for an offer
from those determined by the ITC Programme, to their benefit. It should
also be noted that an applicant successful for an offer through the ITC
Programme would not be removed for an offer as a result of the criteria.
This approach should, by definition, also be beneficial to the end user.
5.22
EirGrid’s criteria to apply in consideration of whether scheduled firm
quantities should be advanced (when compared to the results of the
ITC Programme) will, inter alia, take into account the expected level
and value of constraints, the TUoS revenue receivable from the
generator and other relevant considerations that may be appropriate at
the time. It is anticipated that the criteria which will be applied by
EirGrid for the re-calculation of scheduled firm quantities will be
approved by the Commission and published shortly following the SEM
Committee’s proposed direction in relation to Scheduling, Dispatch and
Access26, which is very relevant to this matter. This proposed direction
is expected by March - therefore the revised scheduled firm connection
dates will be developed in the months following this.
5.23
Overall this approach is designed to reflect, and be an output of, the
underlying network optimisation assessment undertaken by EirGrid in
determining whether or not backbone infrastructure should be built. For
the avoidance of doubt any revised - i.e. brought forward - scheduled
firm quantities as a result of this approach/criteria are unlikely to be
available to earlier Gate 3 programme applicants at the offer
acceptance stage. Offer acceptance timelines will not be extended to
account for this analysis. However, applicants will have both the
primary scheduled firm quanatity information from the ITC programme
and the information from the constraints studies before having to sign
their offer.
26
Please see the recent consultation paper:
http://www.allislandproject.org/GetAttachment.aspx?id=54a53952-22c8-4196-975f-fe9ab14ec2a5
39
No Advanced Commitment for this Phase
5.24
In the first consultation paper the Commission discussed whether
conventional generator applicants should be required to demonstrate
advanced commitment - for example, via a financial commitment such
as a bond or demonstration of financial capability - indicating that it is
serious and/or capable to proceed to construction, in order to receive a
connection offer. This was with a view to ensure that offers to “serious
projects”, which have the intent and capability to proceed, are not
blocked by offers issuing to more “speculative” applications that
happened to apply for connection earlier (see consultation paper and
proposed direction for more details, including a summary of respondent
comments and the Commission’s response on this). As mentioned in
the proposed direction, given that the Commission is adopting a small
steps approach, the risk or impact of serious projects being delayed by
prior speculative applications in this phase (i.e. with Gate 3 renewable
projects) is significantly reduced compared to a big bang approach.
With small steps, offers can be issued to conventional applicants in
future phase(s) relatively quickly - a consultation paper on the offer
issuance criteria for the next phase is anticipated for the first half of
2011 and this can consider providing for “backfilling” if conventional
applicants eligible for an offer in this phase do not accept their offers.
Furthermore, requiring financial or other commitments from applicants
in this phase in advance of an offer, such that those which do not
provide the commitment would then be removed from the ITC
Programme (which is already running) prior to its finalisation and offer
issuance, would save little net time/resources. Hence the key reason
for requiring advanced commitment from a conventional applicant has
been largely removed.
5.25
The Commission has also decided against using evidence of financial
capability as a criterion for an applicant receiving an offer. This is
because in the current economic environment applicants may have
difficulty in providing the Commission with a letter of guarantee from the
company or lending institution in advance of offer issuance. This would
mean that the Commission would have to use of other methods to
assess financial capability, such as the health of a company’s balance
sheet and/or projected profit levels, which would be difficult to assess
presently, thereby being potentially subjective and subject to
subsequent legal challenge. Similarly a ready-to-go approach could be
argued to be subjective and is also subject to timing problems where,
for example, an applicant’s planning permission is about be expire
and/or its application is currently in the planning application process.
This is not to say that such an approach does not have a place in the
future - see section 5.30.
5.26 In the context of these issues and particularly the diminished benefit
associated with requiring advanced commitment under a small steps
approach (as explained above), the Commission has decided against
40
requiring advanced commitment to make conventional projects eligible
for an offer in this phase.
Requirements to Receive an Offer
5.27
Instead conventional applicants that are eligible to receive an offer will
be required to pay the standard processing fee, to cover costs such as
the system operator administration, legal, engineering and legal costs
associated with issuing the offer within 20 business days of the
publication by EirGrid of the scheduled firm connection dates for all
those eligible for an offer, anticipated by the end of January (see
section 7). Should they not pay this fee, they will not be eligible for an
offer. Should they pay the fee and then not accept their offer, the fee
will not be returned as the administration cost has already been
incurred by the system operator. The current total applicable
processing fees are shown below. Transmission connection applicants
have already paid a deposit of €7,000 (incl. VAT).
Connection Application Fees Excluding VAT
MEC
0 < 11 kW
11 < 50 kW
50 < 500 kW
500 kW < 4 MW
4 < 10 MW
10 < 30 MW
30 < 50 MW
50 < 100 MW
>100 MW
5.28
Shallow Works
Required
€0
€789
€1,611
€9,145
€28,211
€54,642
€63,676
€76,367
€89,389
No Shallow Works
Required
€0
€789
€1,642
€8,805
€23,642
€33,758
€37,846
€40,807
€44,348
Conventional applicants eligible for an offer with Gate 3, as well as
renewable applicants in Gate 3, that do not pay their application
processing fee will, in addition to not receiving an offer, be removed
from the application connection queue. This is on the grounds of
fairness to all those in the connection queue. It would be unfair to those
lower down the connection queue (who do not have the option an offer
with Gate 3) if Gate 3-related parties were also allowed an additional
option to remain in the queue after not taking up their current option for
an offer. Allowing Gate 3 parties to exercise such an additional option
would mean they potentially have eligibility to receive an offer in the
next phase of offers ahead of parties that didn’t have this option,
potentially delaying their connection offer or connection date. This
would be an unfair impact on such applicants. In addition, if applicants
eligible for scarce network capacity through Gate 3 do not pay the
relatively modest application processing fee, it would seem that they
have little or no intention to proceed in the near future. Allowing such
41
parties to remain in the queue (after eligibility for a scarce connection
offer) would help facilitate the submission of uncertain or speculative
applications, potentially blocking access to transmission capacity for
later (more serious) applicants in the connection queue. The
Commission does not wish to encourage such speculative applications,
on efficiency grounds.
5.29
Conventional applicants will also be required to demonstrate
commitment at offer acceptance stage under the normal process - for
example should they wish to accept their offer, they must pay a
contribution to their shallow connection assets to the system operator.
Possible Advanced Commitment in Future Phases
5.30
The criteria for selecting generators for offer issuance in a subsequent
phase(s) may be very different to this phase - indeed this flexibility is
one of the key reasons for adopting “small steps” between now and
2025. While not applying advanced commitment as a criterion for an
offer in this phase (for the reasons laid out above), the Commission
believes that there may be merit in doing so for a subsequent phase(s),
in order to help ensure that those in connection queue are serious and
have the intent to proceed, and to help reduce “the rush to apply”
mentality that has arguably contributed to a long connection queue.
This issue, along with the general criteria for subsequent phase(s), will
be subject to consultation closer to the time, but the Commission is
flagging this now as a distinct possibility for implementation. This issue
will be dealt with as part of the consultation process on offers for future
phases, expected to commence in the first half of 2011.
42
6.
Related Public Policy Issues
6.1
In the context of the criteria on which conventional applicants should
receive a connection offer, the consultation paper and proposed
direction raised inter-related matters/projects as having potential
particular importance due to the public interest. Comments received on
this issue are summarised and responded to in section 4 of this paper
as well as in the proposed direction. The Commission now sets out its
final decisions on these areas as follows.
Asset Strategy Agreement
6.2
The Irish Government’s White Paper on energy27, which sets out
Ireland’s energy policy framework to 2020, provides for the divestment
and re-powering of certain ESB generating plant. This is in order to aide
security of supply, the integration of renewable generation, liberalisation
of the electricity market and the promotion of competition.
6.3
In this vein the Asset Strategy Agreement (ASA) was entered into
between the Commission and ESB in April 2007 for the sale of certain
ESB power stations, with the objective to reduce ESB’s dominant
market share and promote competition for the benefit of the endcustomer. As part of the ASA, ESB was allowed to build a 431 MW gas
fired power station at Aghada in County Cork on condition that it agreed
to divest itself of at least 1,500 MW generating capacity and offered
sites to third parties for erecting generating stations. The successful
divestment of certain capacity/sites was a necessary “quid pro quo” to
allowing ESB build a new plant in Aghada - otherwise instead of
competition being advanced as per the Government’s White Paper,
ESB’s market share could actually intensify.
6.4
As part of the ASA, Endesa, a Spanish utility acquired a number of ESB
power stations and has applied to EirGrid for a connection offer to repower these, as follows:
•
•
6.5
For the existing 589 MW Tarbert station, Endesa have applied to repower with 285 of a MW mid-merit plant using LMS 100 technology;
and,
For the existing 216 MW Great Island station, Endesa have applied
to repower with a 431 MW high-merit CCGT plant.
The Commission made provision in its direction on Gate 3
(CER/08/260)28 for the ASA29 noting that in developing the criteria for
the issuance of connection offers to conventional applicants (including
interconnectors), it would take into account, inter alia, of the overall
objective of the ASA. The Commission stated it would only “‘bring
forward’ projects for connection if warranted on the grounds of their
27
Please see http://www.dcenr.gov.ie/Energy/Energy+Planning+Division/Energy+White+Paper.htm
CER/08/260 at Section 8.6.
29
http://www.cer.ie/GetAttachment.aspx?id=84559ccb-ad26-4da1-aea4-179d920a61bf
28
43
wide system/public benefit and where this
disproportionate impact on other applicants. 30
does
not
have
Existing Capacity at Tarbert & Great Island
6.6
To uphold the basic integrity of the bidding process which underlay the
Asset Strategy Programme the Commission directs EirGrid that Endesa
has at least “pre-existing” firm connection rights at Tarbert and Great
Island, i.e. has immediate firm capacity consistent with these plants'
current connection capacity on an equivalence or like-for-like basis.
6.7
The Commission’s statutory function to promote competition31 is
particularly served by enabling Endesa to proceed with the capacity
previously allotted to ESB as was envisaged in the ASA. Otherwise
acquisition of the sites would not have been commercially attractive to
bidders and there would be no competition gains.
6.8
The environmental32 and public interest benefits from re-powering an
existing “brownfield” plant as opposed to developing a new “greenfield”
one must be taken into account by the Commission in light of its
statutory duties. The transferability of existing capacity at Great Island
and Tarbert is also consistent with encouragement of the efficient use
and production of electricity by the Commission.33 As Endesa’s
connections at Great Island and Tarbert are not “greenfield
connections”, connection of the proposed new stations’ current capacity
would not result in significant additional network capacity requirements
as the necessary infrastructure for the current capacity rights is already
in situ.
6.9
To uphold the goals of the ASA and policy as outlined in the White
Paper, the Commission directs that Endesa’s application at Tarbert
receives “immediate” firm capacity for its 285 MW application, and at
Great Island Endesa likewise receives 216 MW of firm capacity upfront.
This is consistent with the plants’ current connection capacity as
assessed on an equivalence or like for like basis and in particular
following studies from EirGrid which confirmed that this would not result
in significant network capacity reinforcements. Furthermore, it would
not impact in a significant adverse material fashion on other parties
connected or contracted to connect to the network or due to receive a
connection offer as part of Gate 3. This decision is being taken in the
context of the ASA only. Future applications for re-powering will be
examined on case-by-case basis, talking account of the benefits of
such re-powering and the likely impact on other parties connected or
seeking to connect to the network.
30
CER/08/260 at Section 4.13, Commission Response, page 31.
See section 9(4)(a) of the Act.
32
See section 9(5)(a) of the Act.
33
See section 9(5)(b) of the Act.
31
44
Additional Capacity at Great Island
6.10
34
Endesa has applied for an additional 215 MW of capacity at Great
Island. The Commission directs EirGrid to treat the Endesa application
for this extra capacity as if it had been made at the date of Endesa’s
actual bid for the plant, i.e. 16th June 2008, rather than the date the
Endesa application for Great Island had been submitted. This is for the
following reasons:
•
The Commission must have regard to the need to promote
competition in the generation of electricity.34 The importance of
competition is a key objective of the Memorandum of Understanding
between the Commission and NIAUR which underpinned the
establishment of the all-island SEM. The successful implementation
of the ASA is necessary to ensure the competitive structure of the
Irish Energy Market. The promotion of competition is particularly
served through the divestment of a set portion of ESB’s market
share and the introduction of Endesa pursuant to the ASA. This
basis of entry into the generation market distinguishes Endesa from
all other applicants in the queue. If the integrity of the bidding
process which underlay the success of the Asset Strategy
Programme is not upheld, the public policy objective of the Asset
Strategy could be frustrated. Indeed as referred to earlier, if the ASA
is not successful ESB’s market share could in fact be increased,
contrary to Government policy.
•
The Commission must recognise that Endesa or indeed any of the
bidders who participated in the bidding process were subject to
unavoidable delays inherent in the bidding process. These were out
of the control of any of the bidders. Endesa was not in a position to
apply for a connection offer until it had emerged as preferred bidder
and had actually signed, or was near to signing, the final purchase
contracts. Had Endesa applied earlier than the date of its
emergence as the preferred bidder, it would have meant making a
highly speculative application for the additional capacity at Great
Island. The Commission does not condone or encourage the
making of speculative applications for connection. In preserving the
integrity of the Asset Strategy Programme the Commission must
ensure that successful bidders are not prejudiced or disadvantaged
by the inevitable delays and constraints they faced in making
connection applications.
•
It was clear to bidders that these old stations, relying on old
technology and lacking the efficiency of newer gas stations, would
be re-powered by the successful bidders. Based on an analysis
carried out by EirGrid in mid 2007 in the context of the assumptions
and system conditions of the time, the Great Island node was
identified as a “good location” with 250 to 400 MW of available
See section 9(4)(a) of the Act.
45
generation capacity for connection. Endesa committed to the
acquisition of Great Island on the expectation of expanded capacity
at Great Island. Notably, Endesa did not seek additional capacity at
Tarbert based on EirGrid’s analysis that Tarbert was no longer a
desirable location for new capacity.
6.11
Accordingly, the Commission is of the opinion that exceptional
circumstances exist justifying it to distinguish Endesa from all other
conventional applicants and departing from the date of application order
for this extra capacity at Great Island. This is warranted on the basis of
the legislative and policy grounds underlying the ASA and the wider
system and public benefit as set out above. The Commission therefore
directs EirGrid to treat the Endesa application in the ITC Programme for
this extra capacity as if it had been made at the date of Endesa’s actual
bid, i.e. 16th June 2008.
6.12
For the avoidance of doubt, this decision in relation to existing and
additional capacity for Endesa is being taken in the context of the ASA
only. Future applications for re-powering will be examined on case-bycase basis, talking account of the benefits of such re-powering and the
likely impact on other parties connected or seeking to connect to the
network.
Interconnection Policy
6.13
The Commission consulted on whether it is appropriate to treat
interconnectors in the same way as generation stations for a firm offer
as part of this process or whether they should be treated differently. As
stated in the consultation and proposed direction papers, there are
some obvious key differences which would tend to suggest that
interconnectors offer strategic benefits not shared by generators. In
particular, interconnectors can transmit electricity in both directions.
The Commission therefore recognises the following interconnector
benefits:
•
•
•
•
6.14
35
Increases and facilitates cross-border trade, encouraging internal
market integration - one of the primary aims of the European
internal market in electricity. The European Commission identified
interconnection between Ireland and UK as being a priority project
in its decision on trans-European networks35;
Supports security of supply by creating the opportunity to import
electricity from the UK;
Promotes competition amongst generators in the market; and,
Can off-take electricity from the grid, providing opportunities for
generators to export electricity to the UK.
The Commission has previously recognised the exceptional features
and strategic benefits of interconnection, when it directed EirGrid to
Decision 1364/2006.
46
make a non-firm offer to IMERA’s proposed interconnector project for
connection at Arklow, TG12736, ahead of other applicants. This was
also on the basis that a non-firm offer would not disproportionately
impact on other applicants ahead of IMERA in the connection queue.
6.15
As and when it can be accommodated on the network i.e. when grid
upgrades are complete, the Commission welcomes the contribution
interconnectors can make towards an internal market in energy in
Europe. The Commission notes that there are two merchant
interconnectors currently in the queue for Gate 3 connection offers,
Interconnector TG127 at Arklow and P181 at Great Island.
6.16
However, interconnector applications cannot be considered in a
legislative and policy vacuum. Capacity allocation on the Irish
transmission system is a scarce and valuable resource. These capacity
constraints underlie the Gate 3 direction and this direction. Though
national energy infrastructure will be strategically developed and
upgraded to address longer term capacity deficits, as planned through
EirGrid’s Grid25, this cannot happen immediately. Therefore at this
point in time the Commission cannot disregard the reality that as an
importer of electricity from the UK an interconnector is similar to
generators for transmission connections as a user of capacity on a
severely constrained system. In other words, the strategic benefits of
interconnection do not mean that interconnection should be advanced
in Gate 3 regardless of its impact on other applicants for network
capacity in a congested system.
6.17
In recognition of the strategic benefits of interconnectors above and
beyond generators, namely achieving cross-border trade in electricity,
the Commission directs that a connection offer be issued as part of this
process (i.e. with Gate 3) to an interconnector with the earliest full
scheduled firm access date as determined by the ITC Programme. This
is likely to be IMERA’s 350 MW application for an east-west
interconnector at Arklow. It should be noted that the scheduled firm
connection date for this interconnector will be developed through the
ITC Programme using the application date order methodology as with
all conventional applicants.
6.18
This is a proportionate step, recognising the benefits of interconnectors
but also that they cannot be viewed in isolation to generator applicants
in what is a congested network. The Commission is of the opinion that
this strikes a balance between the public interest, legislative and policy
objectives sought to be achieved in Gate 3, and that there will not be a
disproportionate impact on other applicants in the queue.
36
http://www.cer.ie/en/electricity-transmission-network-decision-documents.aspx?article=9de081a5f5d5-4134-8e2c-76479fb45fce
47
7.
Timelines
7.1
It is anticipated that the audited scheduled firm access quantities/dates
will be published by EirGrid in phases following the completion of ITC
Programme runs. The first eight years, from 2010 to 2017, are
published with this paper. The next 4 years (2018 to 2021) are planned
to be published in mid January and the final four years (2022 to 2025)
at the end of January. This is subject to no issues appearing with the
Programme or the firm access results which could necessitate a
Programme re-run. The Commission continues to reserve the right to
request EirGrid to re-run the Programme if warranted on security of
supply, competition, environmental or other public interest grounds.
7.2
In order to receive an offer, and to remain in the connection queue (see
5.27 and 5.28), all conventional projects eligible for an offer will be
required to pay the standard processing fee within 20 business days of
all the relevant scheduled firm access dates from the ITC Programme
being published (anticipated by end January as above).
7.3
Assuming they pay the processing fee, conventional applicants will
receive an offer along with Gate 3 renewable generators, i.e. between
this month (December 2009) and June 2011. In other words it is
anticipated that about 2,000 MW of conventional connection offers will
issue as part of this process, along with circa 3,900 MW of Gate 3
renewable connection offers, all over the coming 18 months. When
within this period they will receive an offer depends on what Gate 3
offer group they are associated with, which in turn depends on what
part of the country they are located in. This is shown in the table below,
which links to the following illustration.
Area
Offers Issue
K
17/12/2009
D
02/04/2010
H2
29/07/2010
H1
17/09/2010
B
13/10/2010
F
23/11/2010
E
07/03/2011
J
13/04/2011
A
10/06/2011
C
15/06/2011
48
G
17/06/2011
I
21/06/2011
Area -A
307.24 MW
13 MW 0.4 MW
TRILLICK
SORNE HILL
BUNBEG
GATE-3
TOTALS
8.16 MW
KILTOY
45.20 MW
LETTERKENNY
MEENTYCAT
DRUMKEEN
TIEVEBRACK
105 MW
*
TO STRABANE
NORTHERN
IRELAND
CRONACARKFREE
BINBANE
50.5 MW
GOLAGH
38.5 MW
MEENADREEN
0.5 MW
CATHALEEN'S
FALL
CLIFF
TURLEENAN
TANDRAGEE
49.2 MW
13.65 MW
201 MW
30 MW
204.25 MW
627.1 MW
LISDRUM
TO ENNISKILLEN
11.98 MW
SLIGO
TAW NAGHMORE
CORDERRY
BELLACORICK
220kV or 400kV
15.15 MW
BELLACORICK
SRANANAGH
34 MW
CUNGHILL
BUNNYCONELLAN
MOY
19.35 MW
CORRACLASSY
275kV
GORTAWEE
Area -G
15 MW
ARIGNA
DUNDALK
280 MW
SHANKILL
Area -B
20 MW
TONROE
FLAGFORD
CASTLEBAR
RATRUSSAN
4.25 MW
CARRICK
-ONSHANNON
859.35 MW
1,083.75 MW
RICHMOND
DALTON
LANESBORO
KINGSCOURT
Area -C
DRYBRIDGE
427.68 MW
74.14 MW
GORMAN
PLATIN
KENSTOW N RD
103.8 MW
CAMUS
197.2 MW
608.5 MW
ATHLONE
193.0 MW
ORIEL
STEVENSTOWN
W OODLAND
GLASMORE
4 MW
HUNTSTOWN
KILMORE GRANGE
DERRYGREENAGH
RB
220.5 MW
40.9 MW
DUNFIRTH
DERRYIRON
4.28 MW
11.89 MW
CASHLA
325 MW
SOMERSET
BLAKE
CUSHALING
SHANNONBRIDGE
GALW AY
79.2 MW
KILTEEL
Area -D
IKERRIN
101.62 MW
1.4 MW
ENNIS
WEST MIDLAND
140.5 MW
18.4 MW
ARDNACRUSHA
DRUMLINE
TULLABRACK
Area –H1
Area -E
SEALROCK
RALAPPANE
ARDMORE
MUNGRET
TRIEN
ATHEA-2
40.6 MW
LODGEW OOD
62.5 MW
TOEM
5 MW
KILL
HILL
CRANE
25 MW0.44 MW
24 MW
BALLYW ATER
0.15 MW
DOON
CAHIR
71.4 MW
BALLYDINE
WEXFORD
ANNER
CHARLEVILLE
8.68 MW
102.8 MW
WATERFORD
KNOCKACUMMER
CORDAL
CULLENAGH
38.5 MW
13.8 MW
60.5 MW 110kV
4.26 MW 110kV
350 MW 220kV
1729.61 MW
90.23 MW
TIPPERARY
98 MW
103.6 MW
22 MW
ARKLOW
Area –H2
BANOGE
16.05 MW
RATHKEALE
CLOOGHBOOLA
KERRY
BALLYCADDEN
40 MW
KILKENNY
87.09 MW
KNOCKANOURE
ATHEA
CLAHANE
TRALEE
SHELTON ABBEY
KILBRIDE
280 MW
KELLIS
CAHERNAGH
13.5 MW
13.8 MW
20 MW
5 MW
39.6 MW
41.8 MW
KILLONAN
MONETEEN
BALLYBEG
STRATFORD
LISHEEN
CUREENY
AHANE
W
M
H
BALLYCUMMIN LIMERICK
230 MW
832.44 MW
689.54 MW
IS
20
318 MW 220kV
18 MW 110kV
0.44 MW
101 MW
CASTLEFARM
TARBERT
HIN
G
AU
ATHY
98.44 MW
547.94 MW
THURLES
PROSPECT
MONEYPOINT
40 MW
TURLOUGH
HILL
CARLOW
NENAGH
BOOLTIAGH
364 MW
POLLAPHUCA
196.8 MW
PORTLAOISE
32.55 MW
121.42 MW
KISH BANKS
DUNSTOW N
55 MW 59 MW
9.2 MW
AGANNYGAL
FASSAROE
BARODA
NEWBRIDGE
SOUTH GREEN
DALLOW
1786.25 MW
782.4 MW
COOKSTOW N
CARRICKMINES
MONREAD
KILLINAPARSON
OLDSTREET
Area -J
FINGLAS
NORTH WALL
MACETOW N
COLLEGE
POOLBEG
PARK
INCHICORE
SHELLYBANKS
RINAWADE
GH
IRISHTOW N
FINNSTOW N
115.2 MW
MOUNT
LUCAS
DERRYCARNEY
TYNAGH
DERRYBRIEN
MAYNOOTH
116 MW
THORNSBERRY
EAST WEST HVDC INTERCONNECTOR
SEE
DUBLIN
AREA
CORDUFF
KINNEGAD
SEECON
SALTHILL
25 MW
330 MW
58 MW
BALTRASNA
392 MW
MULLINGAR
98.4 MW
5.71 MW
2.3 MW
10 MW
NAVAN
KNOCKUMBER
CLOON
353.71 MW
112.7MW
MEATH
HILL
ARVA
58 MW
SLIABH
BAWN
MULLAGHARLIN
46.2 MW
GILRA
115.2 MW
98.4 MW
40.8 MW
LOUTH
GREAT ISLAND
KILLOTERAN
BUTLERSTOW N
GLENLARA
915 MW @ 220kV
115.2 MW
KILMURRY
KNOCKAWARRIGA
OUGHTRAGH
5.4 MW
3 MW
70 MW
MALLOW
KISHKEAM
39.9 MW
23.28 MW
BARRYMORE
KNOCKEARAGH
BALLYVOUSKILL
GARROW
DUNGARVAN
47.7 MW
WOODHOUSE
21.6 MW
BOGGERAGH
CLONKEEN
39 MW
CLASHAVOON
COOMAGEARLAHY
178.44 MW
GLANLEE
KILGARVAN
70 MW
INNISCARRA
MACROOM
HARTNETT’S
CROSS
11.5 MW
BALLYLICKEY
60 MW
KILBARRY
COOLROE
TRABEG
CARRIGADROHID
BARNADIVINE
101 MW
DUBLIN AREA
AGHADA
WHITEGATE
W OODLAND
SEE
CORK
AREA
BANDON
5.82 MW
19.75 MW
Area -F
MARINA
RAFFEEN
BRINNY
DUNMANWAY
Area -K
62.28 MW
KNOCKRAHA
392 MW
Area -I
GLASMORE
21.6 MW
101 MW
97.07 MW
BALGRIFFIN
CORDUFF
HUNTSTOWN
CORK AREA
KILMORE
FINGLAS
MACETOW N
GRANGE
COLLEGE
PARK
ARTANE
KNOCKRAHA
GI
PELLETSTOWN
RYEBROOK
CABRA
MIDLETON
McDERMOTT
KILBARRY
RINAWADE
NORTH WALL
WOLFE TONE
NORTH
QUAYS
FRANCIS ST.
GRIFFINRATH
LIBERTY
STREET
LOUGH
MISERY
HILL
HAROLDS
CROSS
FINNSTOW N
CORK
CITY
115.2 MW
RINGSEND
72 MW
NANGOR
MAHON
TRABEG
SHELLYBANKS
IRISHTOW N
GRANGE
CASTLE
CASTLEVIEW
MARINA
POOLBEG
INCHICORE
MAYNOOTH
OLDCOURT
MILLTOWN
TANEY
CITYW EST
COW CROSS
BLACKROCK
COOKSTOW N
COBH
CORK
CENTRAL
PARK
HARBOUR
RINGASKIDDY
RAFFEEN
0.55 MW
POTTERY
ROAD
AGHADA
BARNAHELY
CARRICKMINES
WHITEGATE
KILTEEL
(Red = conventional applicants in ITC Programme, green = Gate 3 renewable
applicants).
49
7.4
To help ensure an efficient offer issuance programme, conventional
applicants in this phase must accept their offer within 50 business days
of the offer or constraints information (whichever is later). They must
also submit any disputes to the Commission by business day 25 of the
50-business day offer timeline. These are the same timelines that apply
to Gate 3 renewable generators, and provide parties with sufficient time
to examine the terms/conditions of their offers while also keeping the
overall offer programme reasonably tight. Where constraints estimates
are issued to parties after the offer this 50 business days timeline
applies from receipt of constraints information.
7.5
If a final decision in relation to SEM Scheduling, Dispatch and Access
has not been published by the time offers/constraint information has
been issued (as will be the case for offers early in the offer
programme), then the 50 business day offer timeline will not commence
until that decision has been issued. This is because this decision, which
is expected in the Summer (following a proposed direction in March),
may impact on SEM rules which are of relevance to parties when
deciding whether or not to proceed to connection. This will apply to both
conventional applicants and Gate 3 renewable applicants receiving an
offer.
7.6
For clarity, the Commission does not foresee applicants eligible for an
offer - be they Gate 3 renewable projects or conventional projects being allowed to extend their offer validity period beyond 50 business
days. Any extension would only be allowed by the system operator for a
very limited time, in limited circumstances and where to do so would
have no impact on other applicants or the efficiency of the connection
process. This is particularly in view of the sheer quantum of offers
issuing under this process, equivalent to circa 6,000 MW in capacity
between renewable and conventional offers, and the negative impacts
on security of supply, competition and renewable penetration if parties
were generally allowed to extend offer validity periods before deciding
whether or not to accept.
*******************
50
Appendix 1: List of Conventional & Non-GPA
Applications in ITC Programme - Allocated Scheduled
Firm Capacity in this Order
Reference
Initial
Application
Received
Date
Application Type
Project
MEC
[MW]
TG72
31/10/2006
BIOMASS
Carrowleagh 100MW Biomass
97
TG80
14/11/2006
Pumped Storage
Kippagh Lough
70
TG81
14/11/2006
Pumped Storage
Knockagreenan
70
TG79
02/04/2007
Conventional TSO
Suir OCGT
DG298
24/05/2007
CHP DSO
Elm Park Development 3
DG300
24/05/2007
CHP DSO
Elm Park Developments 5
DG325
11/09/2007
CHP DSO
Ballyshannon Farms
TG89
14/09/2007
Conventional TSO
Caulstown GT
P121
03/10/2007
Conventional TSO
Oriel
TG100
30/10/2007
Conventional TSO
Boherduff OCGT
DG313
21/11/2007
LFG DSO
Knockharley Landfill Phase 2
4.275
DG314
21/11/2007
LFG DSO
1.425
P38GB
21/11/2007
Conventional TSO
Knockharley Phase 1
Coomacheo Pumped Storage
(within existing wind farm)
TG158
06/12/2007
Conventional TSO
Edenderry Power
TG123
21/12/2007
Conventional TSO
Cuileen Power OCGT
TG159
23/01/2008
Conventional TSO
Ballymonelly OCGT
TG124
07/02/2008
Conventional TSO
DG534
18/02/2008
LFG DSO
DG535
18/02/2008
LFG DSO
Kilbride OCGT
Connaught Regional Residual
Landfill
Connaught Region Residual
Landfill Phase 2
DG536
18/02/2008
LFG DSO
Ballynagran Phase 1
0.75
DG537
18/02/2008
LFG DSO
Ballynagran Phase 2
3.505
TG161
03/03/2008
Conventional TSO
Barretts Park OCGT
220.5
TG127
04/03/2008
Conventional TSO
Templerainey Interconnector
DG547
31/03/2008
Biogas DSO
McDonnell Farms Biogas
TG137
01/04/2008
Conventional TSO
Dunstown Power
DG546
04/04/2008
Biogas DSO
R & L Dowley Biogas
DG554
17/04/2008
CHP DSO
Farrelly Brothers Timberpro
TG162
21/04/2008
Conventional TSO
Bellacorrick Peaking Plant
TG160
06/05/2008
Conventional TSO
Kinnegad Power
DG566
26/05/2008
CHP DSO
Keelings CHP
DG565
28/05/2008
Waste to Energy DSO
Dublin Waste to Energy
DG564
06/06/2008
Biogas DSO
Adambridge Manafacturers Ltd
DG563
19/06/2008
Biogas DSO
Gorteen Lower
19/06/2008
Conventional DSO
Tawnaghmore Peaking Plants
P170
28/08/2008
Conventional TSO
Derrygreenagh OCGT
P170A
28/08/2008
Conventional TSO
Derrygreenagh CCGT
442
P171
04/09/2008
Conventional TSO
Waterford Port Power
115.2
P172
08/09/2008
Conventional TSO
Cahernagh Mid Merit
101
P173
11/09/2008
Conventional TSO
Monavallet OCGT
280
P174
11/09/2008
Conventional TSO
Hayestown OCGT
392
P176
29/09/2008
Conventional TSO
Brinny Mid Merit
P177
30/09/2008
Conventional TSO
Cullenatreen Power
P178
30/09/2008
Conventional TSO
Ralappane CHP
98
0.22
0.334
0.15
58
25
98.4
0
116
98.4
110.25
280
0.75
3.525
350
0.44
196.8
0.44
10
94
197.2
4
72
3
1
104
166.5
101
115.2
40
51
P179
30/09/2008
Conventional TSO
DG619
08/10/2008
Conventional DSO
DG620
08/10/2008
Conventional DSO
Ardmore Electricity
Derrynadivva Peaking Plant
Phase 1
Derrynadivva Peaking plant
Phase 2
DG621
08/10/2008
Conventional DSO
Gortahile Peaking Plant
P180
08/10/2008
Conventional TSO
Luirc Mid Merit
DG622
14/10/2008
Conventional DSO
Scart Peaking Plant
DG623
14/10/2008
Conventional DSO
Scart Peaking Plant Phase 2
P181
21/10/2008
Conventional TSO
EuropaGrid Interconnector
P54C
22/10/2008
Conventional TSO
Ballywater Biogas
P182
24/10/2008
Conventional TSO
P184
29/10/2008
Conventional TSO
Ballymakaily
Great Island – Note: the
application date is deemed to be
different for the purposes of ITC
Programme, as referred to in this
paper.
P185
29/10/2008
Conventional TSO
Knockmay Peaking Plant
P187
17/11/2008
Conventional TSO
Derrycarney
230
10
10
20
318
20
20
700
5
115.2
215
58
325
52
Appendix 2: ITC Programme Assumptions
Technical assumptions to be applied in Gate 3 ITC runs
(December 2009)
53
Introduction
This document collates the assumptions which the Transmission System
Operator is using in the Incremental Transfer Capability (ITC) phase of the
network studies associated with the processing of connection offers for “Gate
3”.
These assumptions are required to be able to apply the methodology outlined
in the Commission for Energy Regulation (CER) direction ‘CER direction for
Gate 3 and related matters’ issued on 16th December 2008 (“Gate 3
Direction”).
The ITC Programme has been run for the initial years from 2010 onwards. In
the course of these runs, a number of issues were identified where
amendments can be made to facilitate greater levels of firm access. As a
result, the ITC Programme was re-started at the beginning of July following
consultation with the CER in order to adopt these and other changes. These
improvements ensure better quality offers are provided to customers with
minimal impact on the offer delivery schedule. These improvements are
included within the list of assumptions included in this document - particularly
section 2 on the network development assumptions.
The assumptions have been collated under headings that best reflect the
nature of the assumption.
54
1. Generation
Generation considered in Gate:
Renewables to be considered in the Gate: As per the Gate 3 Direction, the total MW equates to 4,018 MW.
The actual list of applicants can be found in ‘Gate 3 node assignments’
document. This list totals to 154 applicants37, 30 TSO and 124 DSO
applicants. Any applicant who is no longer eligible or does not want an offer
will not be replaced in the list.
No new generation in Northern Ireland is assumed.
Conventional38 to be considered in the Gate: As per Gate 3 Direction, the MW total equates to c. 6,689 MW.
The actual list of applicants can be found in ‘Gate 3 node assignments’
document. This list totals to 57 applicants39, 33 TSO and 24 DSO applicants.
Any applicant who is no longer eligible or does not want an offer will not be
replaced in the list.
No new generation in Northern Ireland is assumed.
It is assumed that the criteria for selecting conventional plant to receive
connection offers will be on the basis of:
• Any applicants who have received or are due to receive a non-firm
connection offer. These applicants are:
o TG80 Kippagh Lough 70MW Pumped Storage Plant
o TG81 Knocknagreenan 70MW Pumped Storage Plant
o TG79 Suir 98MW OCGT
o TG89 Caulstown 58MW GT
o TG158 Edenderry 116MW Peaking Plant
o TG123 Cuilleen 98.4MW OCGT
o TG124 Kilbride 280MW OCGT;
• Any party with a connection contract for partial firm access. These
applicants are:
o Tawnaghmore two 52MW peaking plants (104MW in total)
o P184 Great Island additional capacity of 215MW;
37
A TSO and DSO ‘applicant’ in this context is defined by which of the system operators they made their
application to, and does not represent the connection point and thus which of the system operators that
the applicant will be offered a connection.
38
In line with node assignments the term ‘conventional’ in this context relates to all non-wind fuelled
generation. Note the MEC for the hybrid scheme, ‘Oriel’, is accounted for as mainly renewable for with
the residue conventional.
39
See footnote i above.
55
•
•
The first 500 MW of applicants with the earliest scheduled transmission
firm connection date for their full requested Maximum Export Capacity
in addition to the projects eligible for an offer above, as indicated by the
ITC Programme;
The interconnector with the earliest full scheduled firm access date as
determined initially by the ITC Programme.
Once the criteria above have been satisfied the remaining conventional
applications will be removed for the subsequent year runs of the ITC, bar the
non-GPA generators consisting of small scale (< 5MW) projects,
autoproducers or non-wind renewables. Any partial capacity allocated to
conventional plant that is removed from the ITC will not be reallocated as this
would involve restarting the ITC.
Generation already assumed in model:
Existing generation plant portfolio: The existing generation plant portfolio (including Northern Ireland) in FS08
Planet database model will be in the network models used in Gate 3. This
involves no closures except as noted below. The list of this generation can be
found in Appendix D of the Forecast Statement available at www.eirgrid.com.
The following closures are assumed and associated capacity available to the
system:
• Poolbeg Unit 3 closed from 2007.
• Poolbeg Units 1 and 2 closed from the end of quarter 1 2010.
• Marina Steam Turbine end of 2009
New generation to be added: Three sources of additional generation will be added to the model,
conventional and renewable, over and above that of the existing generation
portfolio in the FS08 database.
The first is any remaining Gate 2 generation that has not signed its offer, and
the offer is still valid post 1 April 2008 (the data freeze date for the FS08
database). All generation in Gate 2 that has signed post this date or offer
lapsed pre 1st July 2009 will or will not be included in the model accordingly.
All remaining Gate 2 offers ‘live’ post 1st July 2009 will be assumed to be
included in the model.
The second source of generation in the model will be driven by the existing
offers that are still ‘live’ or ‘committed’ conventional offers post 1st April 2008.
The list of the applicable generators, their status and the philosophy for their
use is:
•
Ballakelly CCGT in Co. Louth has accepted its connection offer.
56
•
Nore Power in Co. Kilkenny has accepted its connection offer.
Both these generators will be added to the model and dispatched as with all
existing firm generators.
The two pumped storage units included in Gate 2, Kippagh Lough and
Knocknagreen, were issued with non-firm connection offers. They will be
included in the model and tested for firm access in date order as per their
initial application received dates.
Similarly, both the peaking sets, either already connected or due to be
connected, in Tawnaghmore will be tested for firm access in date order as per
the date that firm access was applied for (its initial application received dates).
The third source will be as a result of re-powering applications of existing
generation at both Tarbert and Great Island.
The existing generation in Tarbert (G1-4) will be replaced based on the
applicant desired connection date with the replacement generation in the
application. The replacement generations’ total MEC is lower than the
combined total existing generations MEC that are to be removed.
The existing generation in Great Island (G1-3) will be replaced based on the
applicant desired connection date with the replacement generation in the
application up to the existing contracted MEC for the combined total existing
generations MEC. This remaining increase in MEC will be treated in the same
manner as any other generators requested MEC in Gate 3, and will have an
initial application received date of the 16th June 2008.
57
Interconnection
Interconnection considered in Gate:
Interconnection in Gate: As per Gate 3 Direction, two TSO applications totaling 1050MW.
Interconnection already assumed in the model:
Existing Interconnection portfolio: The existing generation plant portfolio in FS08 Planet database model will be
in the network models used in Gate 3. These are the Moyle and EWIC
interconnectors.
58
2. Network
Network development utilised in the Gate:
As per Gate 3 Direction, a Grid25 derived+
list of reinforcements will be included in the network models for the ITC runs.
The timing of the addition of new network build into the ITC model will be
derived from Grid25 using standard lead-times for construction of new assets
and recognising certain practical considerations (e.g. the ability to obtain
outages and sustainable capital spend).
The addition of line uprates to the ITC model for the 2010 run will be based on
the most heavily loaded lines identified from some initial Grid25 and Gate 3
related studies. The timing of the addition of line uprates to the ITC model for
each of the years 2011 through to 2025 will be based on those lines identified
from the previous year’s ITC run as being the most restrictive from a firm
access perspective. The programming of line uprates will be done as
systematically as possible taking into account practical considerations e.g.
ability to obtain outages or where there is another uprate or new-build
following closely behind which would negate the need for the uprate.
In addition to the Grid25 list of reinforcements, additional reactive support and/
or equipment changes (for primarily short circuit reasons) that are required to
provide a valid system model at the start of each season or year will be added
as required. The definition of a valid system model is a system model which
will remain compliant following the loss of any item of plant or equipment due
to fault or outage.
Network already assumed in model:
Existing network model: The existing network model (including Northern Ireland) in FS08 Planet
database model will be in the network models used in Gate 3. Details of the
existing network models circuits, stations and transformers can be found in
Appendix B of the Forecast Statement available at www.eirgrid.com.
New developments to be added: A number of sources of additional network will be added to the model
produced from the FS08 database.
All of these reinforcements will be added based on the current transmission
standards and policies.
59
DSO related developments
In line with Grid25 the current Dublin City Plan (DCP), the elements of the
DSO’s proposal for long term development of Dublin’s network, at 110kV or
above, will be added based on the lead-times included in their report.
In addition to this, additional transformer capacity is required to cover the
period beyond the DCP end date to 2025. The system models will therefore be
modified to reflect the need for increased transformer capacity as it arises.
These additional developments will be added to the model either by the DCP
dates, or as required to obtain an N-1 compliant base case.
Gate 2 deep reinforcements
All Gate 2 deep reinforcements associated with Gate 2 that are not already in
the FS08 database will be added in line with Grid25.
Capital Approved projects post FS08:
Any capital projects approved post the 1st April 2008 and prior to
commencement of the ITC analysis will be included in the system model on
the basis of the estimated completion date in the capital approval.
New Generation to be added to the model:
Additional firm generation outside of Gate 3 that are added to the FS08
database post 1st April 2008, which is restricted to Ballakelly and Nore Power,
will have the deep reinforcements associated with them added to the model as
per the estimated completion dates derived as part of their offer processing.
Transmission shallow connection assets:
All40 transmission shallow connection assets will be assumed to be completed
immediately (and therefore in all seasons and years of study) to avoid shallow
connection assets biasing the firm access quantities to be offered to the
individual generators.
Offers will however recognise the completion date for shallow assets by only
offering firm access quantities on the basis of the completion date of both the
deep or shallow connection assets required for the generator.
40
Due to lead-time involved in delivering 220kV infrastructure, in the case of Seecon (Galway) and
Bellacorrick (Mayo) nodes (both of which involve 220kV shallow connections) we are utilising the
existing 110kV network in the early years of the ITC model.
60
3. Load
Load utilised in the study:
The load demand used in the Gate 3 network models will be based on the
latest forecast demand figures published in the updated Generation Adequacy
Report by EirGrid in Q3 2009 (www.eirgrid.com).
Northern Ireland:
The load demand used in the Gate 3 network models will be based on the
most up to date forecast demand figures provided by SONI.
61
4. Technical parameters
Firm Access Quantity step size:
0.5MW will be used in line with the Gate 3 Direction.
Order of Study:
Applications shall be tested in initial application received date order at the
nodes specified in the Gate 3 Node Assignments List published on the 22nd
May 2009 as amended by approved Gate 3 change requests.
Period of Study:
Studies will be completed from, and including, winter peak 2010 until winter
peak 2025, using study periods at summer night valley, summer peak and
winter peak.
Firm Access Quantity per applicant:
A scheduled Firm Access Quantity, either in part or the entire requested MEC,
cannot be guaranteed for each applicant.
Consequently, in the event that the Commission’s objectives are not met then
either in part, or entirety, the ITC phase of the process will need to be re-run
with assumptions adapted to those outlined in this document, most likely with
an augmented network model.
In this situation this document will be re-written with the new assumptions and
a new version issued.
62
Appendix 3: Terms of Reference of ITC Audit
Independent technical audit of ITC Programme Terms of Reference
th
16 December 2009 (Version 1.2)
Background
On 16 December 2008 CER published its final decision (CER/08/260) on Gate
3 (‘Criteria for Gate 3 Renewable Generator Offers & Related Matters –
Direction to the System Operators’41) (hereinafter referred to as “the Gate 3
Direction”). The Gate 3 Direction included a requirement for EirGrid to
calculate scheduled transmission firm access levels for each eligible Gate 3
project for each year from 2010 to 2025 based on EirGrid’s forward-looking
Grid Development Strategy (GDS)42 and using the ITC Programme43.
On 24 July 2009 the CER published a ‘Proposed Direction on Conventional
Offer Issuance Criteria’44. This proposed direction requires EirGrid to
calculate scheduled transmission firm access levels for those conventional
projects eligible for an offer in addition to the Gate 3 renewable projects.
The Gate 3 Direction (Section 5.22) stipulates the appointment of an
independent technical auditor (the Auditor) to audit the ITC Programme:
“The ITC Programme and the methodology employed to achieve its
results will be the subject of an independent technical audit to
provide the market with full confidence as to its objectivity and
fairness in applying the above rules. The auditor will be appointed
by EirGrid with terms of reference approved by the Commission,
and that EirGrid issues a report following the audit to be published
on its website.”
Audit Purpose
The purpose of the audit is to provide assurance to applicants and the industry
in general that the methodology for the ITC Programme conforms with the
41
http://www.cer.ie/GetAttachment.aspx?id=54270766-56dc-4ddf-b0a1-d3be66a23df1
http://www.eirgrid.com/media/Grid%2025.pdf
43
ITC (Incremental Transfer Capability) Program is a computer program used by EirGrid to identify
available firm generation capacity and allocate it to the Gate 3 applicants on a date-order basis
44
http://www.cer.ie/GetAttachment.aspx?id=952e3c6b-ebdf-4866-b278-06d0391562b3
42
63
Gate 3 Direction and CER/09/192 and that the methodology has been applied
in a fair and objective manner.
Audit Checks
The following outlines the items that will be checked as part of the audit:
-
that the ITC Programme allocates scheduled firm access quantities in line
with the ITC rules set out in sub-sections 5.16, 5.18 and 5.19 of the Gate 3
Direction, under the heading “Date Order Allocation of Scheduled Firm
Capacity”, and as directed by the Commission in Sections 3 and 4 of
CER/09/192 (‘Detail for Allocating Scheduled Firm Access in Gate 3 ITC
Programme’);
-
that the date recorded in Appendix 1 of the Gate 3 Direction45 is the date
which is used in the ITC Programme for Gate 3 renewable applications;
-
that the date recorded in Appendix 1 of the CER’s 24 July 2009 Proposed
Direction on Conventional Offer Issuance Criteria (CER/09/114)46 is the
date which is used in the ITC Programme for Gate 3 conventional and
Gate 3 non-wind renewable applications47;
-
that all shallow works48 are included in Year 0 (2010) (i.e. the base case
model) of the ITC Programme (except for Seecon (Galway) and
Bellacorrick (Mayo) nodes where the respective applicants are modeled on
the existing local 110kV network until such time as the 220kV and/or
additional 110kV shallow-connection infrastructure is assumed to be in
place based on standard construction lead-times) (ref. Section 2 of
‘Technical Assumptions to be applied in Gate 3 (July 2009)’49 (hereinafter
referred to as the “ITC Technical Assumptions Document”) i.e.
“Transmission shallow connection assets: All transmission shallow
connection assets will be assumed to be completed immediately (and
therefore in all seasons and years of study) to avoid shallow connection
assets biasing the firm access quantities to be offered to the individual
generators”).
-
that the transmission network uprates are added to the programme in
accordance with Section 2 of the ITC Technical Assumptions Document
i.e. “the timing of the addition of line uprates to the ITC model for each of
the years 2011 through to 2025 will be based on those lines identified from
the previous year’s ITC run as being the most restrictive from a firm access
perspective”;
45
As may have been amended by an approved change request
http://www.cer.ie/GetAttachment.aspx?id=952e3c6b-ebdf-4866-b278-06d0391562b3
47
As may have been amended by an approved change request
48
For the purpose of the ITC Program shallow works are defined as those works required to transfer the
total MEC at a node(s) to the meshed transmission system
49
Ref. Appendix 2 of ‘Proposed Direction on Conventional Offer Issuance Criteria’
(http://www.cer.ie/GetAttachment.aspx?id=952e3c6b-ebdf-4866-b278-06d0391562b3)
46
64
-
that EirGrid’s proposed new transmission network build programme is
reflected in the ITC Programme runs (ref. Section 2 of the ITC Technical
Assumptions Document);
-
that the ITC Programme’s firm capacity test tolerance is 0.5MW (ref.
Section 4 of the ITC Technical Assumptions Document);
-
that firm capacity identified in any given year is included in the base case
model for all subsequent ITC annual runs;
-
that all conventional applications which are not either:
(a) one of the ‘non-firm’50 offers;
(b) one of the ‘partially firm’51 offers;
(c) part of the first 500MW (subject to the 550MW threshold as set by the
Commission) of full firm access determined by the ITC Programme (in
addition to the projects in (a) and (b)); or
(d) small-scale (<5MW) generation projects, autoproducers or non-wind
renewable projects which meet certain public interest criteria (ref.
section 6.20 of the CER’s 24 July 2009 Proposed Direction52
(CER/09/114) on Conventional Offer Issuance Criteria)
are removed from the list of applications to be included in future runs of the
ITC Programme once 500MW (subject to the 550MW threshold as set by
the Commission) of full firm access is determined by the ITC Programme
(in addition to the projects in (a) and (b))53;
-
that, in accordance with CER/09/114 (Section 6.20) all other interconnector
applications are removed from the list of applications to be included in
future runs of the ITC Programme once full firm access is determined by
the ITC Programme for one interconnector application; and
-
that the firm access quantities to be provided to the CER (and ultimately to
the industry) correctly factor in shallow connection lead-times.
Special Requirements
The following outlines a number of special requirements for the audit:
-
the consultancy providing the services of Auditor shall not be in a position
of conflict of interest in undertaking this audit with regard to its own
interests or its clients’ interests in Gate 3 or in any of the conventional plant
which are subject to the CER’s proposed direction (CER/09/114) on the
Conventional Offer Issuance Criteria and shall make a declaration to such
50
Tawnaghmore (104MW), Kippagh Lough (70MW), TG81 Knocknagreenan (70MW), TG79 Suir
(98MW), TG89 Caulstown (58MW), TG158 Edenderry (116MW), TG123 Cuilleen (98.4MW) &
TG124 Kilbride (280MW)
51
P184 Great Island additional capacity of 215MW.
52
http://www.cer.ie/GetAttachment.aspx?id=952e3c6b-ebdf-4866-b278-06d0391562b3
53
Refer to the forthcoming Final Direction on the criteria for connecting conventionals for any possible
amendments to this.
65
effect. Any potential material conflicts of interest shall be notified by EirGrid
to the CER prior to the appointment of the auditor;
-
the audit checks listed above will need to be performed at three separate
stages: (1) for the first eight (8) years of ITC runs (2010-2017 runs); (2) for
the 2018-2021 ITC runs and (3) for the 2022-2025 ITC runs;
[It is currently expected that these ‘mini-audits’ will take place in late Nov.
(2010-2017 runs), early Jan. (2018-2021 runs) and mid/late Jan. (20222025 runs). Please note, however, that the audit of the applications
“receipt date” having been correctly recorded as per the definition in
Section 5.13 of the Gate 3 Direction as amended by the CER Direction
CER/09/192 (referenced above) should be completed in advance of the
audit of the first eight (8) years of ITC runs (2010-2017 runs).]
NOTE: EirGrid will confirm the required start-date of each mini-audit at
least 10 business days in advance of the required mini-audit start date;
-
audits to be carried out at EirGrid’s offices at 160 Shelbourne Road, Dublin
4 and at ESB Network’s offices, as appropriate;
-
audits to be carried out diligently in a timely, accurate and complete
manner;
-
a draft report to be provided to EirGrid for comment within 4 business days
of the completion by the Auditor of the listed checks for each mini-audit
(EirGrid will provide comments on the draft report within 4 business days of
its receipt). The final report to be provided to EirGrid within 2 business
days of receipt of EirGrid comments on the draft report; and
-
a draft report (for the overall audit) to be provided to EirGrid for comment
within 5 business days of the completion by the Auditor of the listed checks
for the final mini-audit for EirGrid comment (EirGrid will provide comments
on the draft report (for the overall audit) within 5 business days of its
receipt). The final report (for the overall audit) to be provided to EirGrid
within 3 business days of receipt of EirGrid comments on the draft report
(for the overall audit).
Revisions of the Terms of Reference
Any amendments to the Terms of Reference shall be subject to approval by
the CER.
Confidentiality
All information relating to the audits shall be regarded as strictly confidential
and is intended to be for the sole use of the auditor(s), EirGrid, ESB Networks
(the DSO) and the CER and any other disclosure or use of information relating
to the audits by the auditor(s) is prohibited without the prior written consent of
EirGrid, ESB Networks (the DSO) and the CER.
****************
66