Prior to the introduction of the "Gates", connection applications by renewable applications were dealt with under the traditional single-processing approach, whereby each connection application was assessed independently on an ongoing basis. If a renewable generator interacted with another applicant in their area then this would have a knock-on effect on their offer, which was open to being withdrawn and re-worked in the event that an interacting generator accepted their offer. This regime ultimately resulted in a "race to sign" between interacting applicants and therefore the single-processing lacked certainty for developers.
In 2004, the TSO and DSO issued a joint proposal to replace the single-processing regime in Ireland with a group-processing regime, which was to become known as Gate 1. This would look at applicants in a single batch and consider all factors, including the level of interaction prior to issuing an offer for connection. This negated the need to re-work connection offers and was intended to speed up renewable connections and give greater certainty for developers.
Group-processing (Gate) regime
The introduction of the group-processing regime signalled a greater involvement for the regulator in connection policy than they had previously. The Commission has the power to make Directions to the TSO under section 34 of the Electricity Regulation Act 1999 in relation to connection offers and, using these powers, the Commission, following extensive consultation, made Directions to the TSO on a number of matters including the size of the Gate and methodology for processing the applicants.
The Commission made its second Gate Direction in 2006. This directed that the first 500MW of applicants would receive an offer and a further 1300MW would be allocated among the remaining applicants on a system optimisation basis.
In Gate 3, unlike in Gate 2, the Commission operated a strictly “first come, first served” approach. The Commission noted in its Direction on Gate 3 that there was over 9000MW of renewable capacity waiting in the queue for a connection offer. Of these, the first 3900MW in the queue will be processed in Gate 3.
This will leave over 5000MW of renewable projects in the queue. Those projects not included will have to wait until Gate 4 (assuming that a further Gate will be introduced by the Commission), which has not yet been announced. The size of any future Gate will be dependent on, among other things, the available capacity on the grid, which already suffers from congestion. Ongoing development of the Grid will be carried out by the TSO under its “Grid Development Strategy” (Grid25), which aims to significantly reinforce and develop the Grid in order to meet projected demand in 2025.
Treatment of conventionals
The Commission has, to date, continued to treat conventional generation under the single processing regime on an ongoing basis. However the size of the queue has become increasingly long and the Commission took the decision in the Gate 3 Direction that conventional applications (which include, for these purposes, interconnectors) should be included in Gate 3. The reasons for this have been cited as partly for efficiency purposes and partly to promote security of supply.
The Commission has published a consultation paper regarding how conventional applications should be treated under Gate 3. The Commission has proposed that 3,400 MW of conventional generation is issued an offer alongside renewable generation on the basis that the TSO has estimated that this may be required to protect security of supply. Like renewable applications, the Commission has proposed that applications are dealt with on a date order basis subject to the requirement that the project “demonstrates commitment”. The Commission has also made more specific proposals in relation to particular projects on public interest or policy grounds.
An alternative route- treatment of small, renewable and low carbon generators
The Commission has also published a consultation on the treatment of small, renewable and low carbon generators outside of Gate 3. This consultation considers whether certain classes of renewable generators and small conventional generators under 5MW should be excluded from the group-processing regime. Briefly, the proposal suggests that the following classes of renewable generator should be excluded from the requirement to participate in the group-processing regime on “public interest grounds”:
- Biomass fuel
- Combined heat and power (CHP)
- Experimental/Emerging technologies
The Commission notes in the consultation that the public interest grounds for treating these classes of renewable generator differently are to encourage competition, to promote security of supply and to protect the environment by encouraging new renewable technologies in the Irish market.
The consultation also considers how to deal with interactions with other applicants ahead of them in the queue. It gives a number of options, including allowing the applicant to connect regardless of the impact or otherwise by allowing the applicant to “buy-out” the interaction by paying for the additional costs of shallow connection asset. The consultation also considers a combination of these two options.
The Commission’s consultation on treatment of conventional applications in Gate 3 has recently closed and the Commission will now be considering the responses. Meanwhile, the consultation regarding the treatment of alternative renewable technologies and small conventional generators will remain open for comment until 30 April. The Commission’s conclusions will no doubt be of interest to all those interested in the Irish renewable industry.
Meanwhile, the TSO has began running its “ITC programme” in Gate 3, which will calculate connection dates for all those renewable generators included in Gate 3, with connection offers expected to be issued later this year.
One thing that is clear is that connection to the grid remains one of the greatest difficulties facing renewable generators in Ireland.
About the writer
Lesley Gray is a solicitor in the Energy and Utilities Group and has worked in Dublin on secondment with the Commission for Energy Regulation for a year. For further information on the regulatory framework in Ireland please contact Lesley on 0131 473 5728.