by Owen Martin
The Energy Regulator has reported that there is currently a backlog of 36,000MW of renewable and conventional generation connection applications (See above graph). This would increase the current capacity of 10,500MW to a staggering 46,500MW if all of these applications were accepted. As the regulator points out we only have an electricity demand for about 7,000MW.
Under normal circumstances, only capacity that replaced existing capacity or was required to meet additional demand or reserve requirements would be accepted. Now, because of the rush to meet EU targets, thousands of megawatts of inefficient and intermittent renewable generation are being added. Renewable generation, mostly wind and solar, make up about 70% of the planned generation figure.
This will lead to a low capacity factor across the board, with all generators operating inefficiently and intermittently. As this blog reported recently, many wind farm companies are making losses. As more generation is added, the market share for all generators will be eroded and we will see more loss making generators. Which will require yet more government intervention to keep the lights on (and possibly another NAMA to be set up).
And it gets worse. The Grid will require a large upgrade as most of these solar and wind farms will be in remote and dispersed regions far away from centres of demand. The costs will simply keep rising exponentially.
In particular, the CRU notes that the existing backlog of connection applications amounting to 36,000MW is already significantly in excess of the all-island total electricity requirement. Keeping the non-GPA process open to further applications during the consultation period would only increase this volume. This would potentially add to consumer costs with no discernible benefit.
For example, with this much renewable generation, it will become increasingly difficult to stabilize and manage the grid frequency. That is why more conventional generation is required to maintain stability and of course this adds to the costs. The Regulator refers to these generators as DS3 providers and has proposed giving them priority over renewable generation :
DS3 system services are required by the system in order to accommodate increasing volumes of non-synchronous renewable generation. The CRU decided in CER/16/284 that providers of those services will be prioritised for a connection offer under the non-GPA process, and requested the system operators to develop a process for this prioritisation.
The regulator also plans on suspending some of the renewable generation which would of course be a wise decision and be in the interests of all consumers. Naturally, the renewable lobby groups are not happy and have somehow managed to spin this as a decision that will "result in higher electricity prices." It's difficult to understand why they are lobbying for more supply in an already over-saturated market which will erode the market share of existing renewable generators.
The energy regulator should stick to the facts and figures as presented in her document. That way she can defend her actions later. It could be the first time an energy regulator has stood up to the green lobby and protected consumer's rights. The Energy Bubble is clearly unsustainable. I for one am hoping that for the first time in recent Irish history, an Irish regulator does the right thing before it's too late.