Tuesday, 5 June 2018

Demand Side Units Now Reach 540MW

by Owen Martin

A total of 544MW of demand side units (DSU) was contracted for in the recent All Island I-SEM capacity auction. Each DSU will qualify for capacity payments of € 41,800 per MW. So that's a total of €22 million that will be paid each year to encourage off grid generation, including "dirty" diesel generation, in my opinion, a consequence of the mad rush for wind energy.  Since wind cannot always be depended on to meet demand, the obvious solution is to reduce demand.

A Demand Side Unit (DSU) is a demand site that can be instructed by EirGrid to reduce electricity demand. Instructions to reduce electricity demand are called dispatch instructions. Where a DSU consists of more than one individual demand site it is called an aggregated DSU. A DSU uses a combination of on-site generation and/or plant shutdown to deliver a demand reduction in response to an instruction from EirGrid [Eirgrid].

However such industrial sites can offer demand reduction services through a combination of load reduction, running standby diesel generators, or running inactive Combined Heat and Power (CHP) plant [Rationale for DSU].  

Many data centres have installed diesel generators, so presumably they can also qualify as a Demand Side Unit, which will greatly reduce the load on the now wind dominated grid. In fact, we may soon see the entire industry of Ireland registering to become Demand Side Units which would greatly reduce electricity demand and thereby make it easier to meet our renewable targets. Although, in reality, it would be a fudge and would make a mockery of our "green" credentials as we would still be as dependent on fossil fuels as ever. 

It is ironic that the mad rush for clean wind involves moving away from very efficient gas generation to inefficient fast acting forms of generation such as diesel. In fact, the capacity auctions saw DSU's take precedence over the very recently built modern and efficient CCGT in Huntstown, Dublin. So we have one policy which seems to prefer higher emitting generation in direct conflict with the other policies that encourage lower emitting generation.  

It was no surprise then that recently it was announced that Ireland's carbon emissions were rising. This is because central planning is about box ticking and meeting targets rather than a sensible all round plan that can adapt and respond logically to feedback. 


  1. The whole benefit of mains electricity supply for the average small to medium sized enterprise and domestic consumer is that consumers get flick of a switch power at an affordable cost freeing up their time for more profitable or enjoyable activities. Its the same as baking, milk supply or vegetable supply. I have always claimed that wind does not work or it it does, it works in such a way as to be near useless to consumers. This is why you rarely see wind turbines powering homes or farms. Once government decides to promote wind at all cost, engineers have to introduce ways to accommodate that wind. The above article describes such an attempt. In plain man's language what is happening is this.
    1) Start up businesses are encouraged to install fossil fuel back up generators for which they receive hansom fixed payments and payments for supply of power. (all extra)
    2) Existing businesses are encouraged to install such generators both to supply themselves reliable power (reduce demand on grid) and to supply the grid in times of low wind. We can see that both these initiatives reduce the market for electricity for conventional suppliers who will struggle to stay in business. They reverse the business model, so that instead of cash flowing towards the Mains supplier, it goes the other way. If this catches on, the price of Irish electricity will surpass the highest electricity prices on the world. Consumers will switch to bottled gas and diesel generation where possible. The consequent reduction on demand will cripple mains fossil fuel suppliers and will cripple the ever growing wind and solar producers unless prices increase a lot. Note (the ESB and SSE are in financial difficulties and Gaelectric are bankrupt). Meanwhile thare will be no emissions reduction. There will be no public outcry for another few years until mass disconnections become normal. This is the most perfect example of Irish Paddywhackery. It's a cross between a classic economic bubble and a Ponzi scheme. I have been working hard to see if it is possible to bet in the financial markets that the whole lot will come tumbling down. The problem is how does one define its failure? Meanwhile Ireland and the UK is on its 9th day with no wind energy at all. There is a lot of sun and government's answer is to install more solar generation. So its another added cost.

  2. When I looked the business model of wind generation in 2012. I said wind generation is crazy. I always thought that customers create demand not production units. Some of these diesel units are use for peak smoothing. It is very difficult to see how they can actually be used as at the level of 75% wind penetration on the grid the grid becomes very unstable. Eirgrid virtually shut down wind production during one of the big storms before last Christmas. Probably because wind generation during periods of turbulent wind storms would crash the grid. These DSU's and solar generation will cannibalise even further the income of theses loss making wind farms.It will be interesting to see what is the next accountancy trick that they will use to give the impression of financial solvency on paper. Surely another company not mentioned ,in the above comment , to be under financial pressure has to be Bord Na Mona. Both Sliabh Bawn, which they own jointly with Coillte, and Mount Lucas had capacity factors of less than 15% in 2017. The only thing certain about the Irish Energy policy is it financial implosion.