Appeal Panel Rule in Favor of Huntstown Power Station

An Appeal Panel appointed by the Department of Communications has determined that the Energy Regulator (CRU) erred in making changes to the licence of Huntstown gas powered station following the power station's failure to secure capacity payments in the recent capacity auction. The Regulator's decision would have forced the power station to give three years notice of closure, which meant the plant would have had to run at a loss for those years. 

"The CRU has effectively turned up the heat and locked the door of the kitchen.” - Appeal Panel decision

 The Appeal Panel was made up of three barristers - Eilis Brennan BL, Joe Jeffers BL and Aoife Carroll BL. They ruled that the Regulator had made a “serious and significant error (by omission)” by not reaching a negotiated settlement to help manage the power station's exit from the market through a Targeted Contracting Mechanism (TCM). In a further blow to the already delayed I-SEM, the Regulator had failed to include a TCM in it's setup.

It's uncertain as to the consequences of this ruling and whether it will actually be implemented at all. However, it does highlight the urgent need for some independent oversight in Ireland.

I wrote previously about the capacity auction here.

Power Stations to Close

New Single Electricity Market rules now in force will see capacity payments cut by 30%.  In some cases, the power stations may not receive any capacity payment at all.

The inevitable consequence of this is the closure of older power stations and less dispatchable plant available to keep the lights on. Dispatchable plant is plant that can be switched on quickly when required. Renewables like Wind energy are not dispatchable because their output is uncontrollable. Ireland (All Island) currently has about 10,000MW of dispatchable plant and about 4,000MW of wind energy. About 1,000MW of capacity will not qualify for capacity payments. This leaves around 9,000MW of dispatchable plant remaining.

	Dispatchable plant MW
Remaining dispatchable	9,046
Max demand (2010)	6,878
Capacity margin	2,168
Minimum new data centres	1,136
Capacity margin after data centres	1,032
Reserve Generation	500
Capacity Margin Net Surplus	532

When everything is accounted for, including periods of high demand such as occurred in winter 2010 and planned data centres, there is a capacity margin of 1,032MW. Reserve generation is required incase a power station trips out. Currently this is about 500MW. This leaves a net capacity margin of 532MW.

This is quite tight but what happens if Viridian shut down not one but both of their gas power stations in Dublin (they have notified the Regulator that they will close both).  

This would leave a capacity margin of just 132MW. It would be lunacy to allow this to happen as blackouts would be inevitable in a harsh winter.  Dublin would be at most risk where there is a requirement for two large power stations to be on load at all times (three if the UK interconnector is out). 

While it would reduce costs, a blackout would come at a greater cost. 

And what of Northern Ireland ?  Where is the surplus power to come from to export to the North through the North South Interconnector ? The new auction will result in the closure of power stations in the North (Kilroot and part of Ballylumford). Northern Ireland is already at risk of power shortages.

But don't worry the Energy Regulator knows what they are doing I hear you thinking ? Well, I will just leave this here :

http://www.rte.ie/radio1/today-with-sean-o-rourke/podcasts/ 

Look for Tuesday 30th January "Electricity Supply".

The interviewer asks the Regulator how much power do the Viridian power stations supply in percentage terms ? It's worrying that the Regulator had not checked this very important statistic. She replies that they are 800MW capacity so out of 9,000MW, it would be a bit less than 10%. But the 9,000MW is not demand, it's total capacity (capacity must be higher than demand). She also never mentioned the little problem of a minimum requirement for power stations in Dublin. Again, something I thought she should know. 



1) SEMO Auction Results - http://www.sem-o.com/ISEM/General/Capacity%20Market%20-%20Final%20Capacity%20Auction%20Results%20Report.pdf

2) Eirgrid Constraints in Dublin Region -  http://www.eirgridgroup.com/site-files/library/EirGrid/Operational-Constraints-Update-January-2018.pdf

3) Planned Data Centres - http://www.iwea.com/industryreports

4) Maximum demand all time - http://smartgriddashboard.eirgrid.com/#all/demand