Record Prices hit the Irish Electricity Market

 On Thursday the 9th September, prices in the All Ireland Electricity Market hit record highs of €4,680 per MWh, well over 20 times the normal price :

The scale here is from €0 to €5,000 MWh

What a normal day looks like, prices rise to about €150 MWh

These prices may have had something to do with the UK switching on coal plant that same week, the cost of which can be very high. Margins are set to get even tighter in the UK as this week one of the interconnectors to France went on fire causing wholesale prices to rise even higher there. Low outputs of wind energy have plagued both Ireland and the UK for many months now. In essence, high prices in the electricity market go hand in hand with low amounts of reliable generation.

There have been three Amber Alerts and seven Notifications of Tight Generation Margins issued this month in the Single Electricity Market (SEM). An Amber Alert means there was expected to be enough energy to meet demand, but possibly not enough in reserve should something go wrong. They can also be issued if there are significant frequency / voltage deviations which can happen when there aren't enough large power stations on the grid. The notification of Tight Generation Margins seems to be a prelude to an Amber Alert. 

System Alerts can go from Alert (Amber) to Emergency (Red) to Blackout (Blue) and finally to a Restoration state. Up to the end of August of this year there have been six system alerts on the grid. In the previous decade, they averaged just one per year.

Irish Market Experiences High Levels of Negative Pricing

Since the introduction of the I-SEM in October 2018, Ireland has experienced a high level of negative pricing compared to other European markets. Prices dropped as low as minus €139.44 in February. Negative pricing occurs during periods of very high wind, mostly at night, when it becomes too expensive for power stations to switch off and then back on again when wind energy is low.

In such circumstances, it becomes cheaper for the power station to pay energy suppliers to take their power. It would be a bit like walking into a shop and seeing a negative price on a box of cereal i.e. they are paying customers to take their product.

Negative pricing is a new development in the Irish electricity market, but it is symptomatic of a problem that presumably has been happening for many years. If power stations are unable to switch off during periods of high wind then that means the co2 savings attributable to wind are much less than is often claimed.

In effect, it means we are running a duplicate system, with wind and fossil fuel /other renewables running in parallel with each other.

Power stations affected by negative pricing include other renewables such as biomass and waste to energy which are increasingly having to waste their output to facilitate more wind.

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.

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. 

Delay in New All Island Electricity Market Raises Questions over Future of Power Stations

The new All Island Electricity Market (I-SEM) was set to come into operation in May this year but has now been delayed by six months. This raises questions over what will happen to two power stations set to close this year. Both Huntstown CCGT in Dublin and Kilroot in Northern Ireland failed to secure capacity payments in the recent I-SEM auctions and signaled their intention to close down by the end of May. This would be disastrous for both Dublin and in particular Northern Ireland, which, with no replacement generation ready, would face the prospect of prolonged blackouts for the next year at least. With all the focus being placed on renewables and battery storage, there still has been no proper impact assessment (nor media coverage), now needed more urgently than ever, on how the Irish grid will cope without these power stations.

The blame for the delay in the I-SEM has been put down to software problems. Which is something this blog highlighted a few years ago - the increased administration costs and problems that could arise from the increased complexity of operating a grid designed around wind energy.