submission to the cer's review of grid connection …...reducing its reliance on imported fossil...

SUBMISSION TO THE CER'S REVIEW OF GRID CONNECTION POLICY

FEBRUARY 2016

Elgin Energy Submission to CER Grid Connection and Access Policy Review

1 | P a g eFebruary 2016

1. Executive Summary

Elgin Energy calls on the CER to direct the System Operators (SO) to process all existing

applications in the Non Group Processing Approach under the rules as set out in the CER/09/099

until such time a new process can be implemented.

To ensure existing applicants that were lodged in good faith are not disadvantaged by a new

process, Elgin calls on the CER to ensure the first 5 applications at each 110kV node are processed

in date order prior to a new process being implemented.

Elgin does not agree with proposals to limit grid offers to those applicants with planning

permission given the uncertainty of grid connection costs and availability, as well as the O Grianna

High Court decision whereby connections to the grid must form part of the planning application.

To ensure future connections are delivered, Elgin calls on the CER to abandon a proposed Gate

process given the history of previous Gates which only delayed the connection process. Elgin

recommends that steps are instead taken to increase network capacity transparency to ensure

more targeted applications – for example in the form of heat maps similar to those used by UK

Distributed Network Operators.

2. Introduction

Elgin Energy welcomes the opportunity to engage with the CER in the development of the electricity

system and the policy which governs the future use of this vital infrastructure.

Solar PV is the most deployable renewable technology available and can help ensure that Ireland

reaches its 2020 renewable targets and offset any wind energy deficit, given its ability to be

constructed rapidly throughout the country over the coming years. The UK has seen a rapid growth in

the development of solar PV in the past few years including the development of 2.5GW in Q1 2015

alone. The development of solar PV generation will help Ireland increase its energy security by

reducing its reliance on imported fossil fuels.

Elgin, as an Irish company with experience in developing solar projects in the UK, has worked closely

with many of the distribution network operators (DNOs) over the past five years and understands the

challenges faced by the CER, ESB and EirGrid in operating a safe, secure and reliable infrastructure for

future generations.

Elgin has lodged 51 applications to ESB for connection to date and are awaiting a number of grid

connection offers from the System Operators.

Elgin calls on the CER to assist the solar energy industry in developing a market in Ireland by ensuring

that existing policies are implemented in a fair and transparent manner and that any future policy

considers the existing applications which have been lodged at great expense and in good faith.



3. Enduring Connection Policy: Objective, Principles and Approach

3.1 Enduring Connection Policy Objective and Underlying Principles

Do you agree with the policy objective for the Enduring Connection Policy? Are there other matters the CER should consider?

Elgin Energy agrees with the Enduring Connection Policy objectives in principle, and welcomes the CER consultation as a vital step to ensure that connection policy is fit for purpose for current and future requirements.

Do you agree with the application of the above underlying principles to the development of Enduring Connection Policy? Are there any other principles that the CER should consider?

A future policy must encourage transparency, equity and fairness and also cost effectiveness at its core. Future connection application policy must ensure engagement by the system operators with proposed applicants prior to applications to be lodged to help encourage targeted connections thereby reducing speculation.

3.2 Enduring Connection Policy: High Level Approach

What is your view on the high level processing approach outlined above? Are there other processing approaches the CER should consider?

Elgin welcomes steps to optimise system development and network efficiency. In addition to the high level approach, the current offer regime around the 110kv node could seriously inhibit the speedy deployment of infrastructure if not addressed. Elgin recommends that the appropriate processing node for 5MW installations should be the MV/38kv, as projects of this size will not impact the 110kV network to any significant degree. Additionally, the policy that any generation greater than 500kw must be connected into a substation via a dedicated circuit should be reviewed in light of connection policies in the UK which allow “T” connections into 11, 33 & 133kV overhead lines, allowing for more suitable siting of projects.

Elgin believes that the current system prohibiting auto-production, unless the generator is contained on site, also needs to be reviewed to:

1. Enable large demand users to minimise their impact on the existing electricitynetwork, and;

2. Promote the generation of local electricity to meet local demand and minimisethe demand on the transmission network.

4. Enduring Connection Policy: Key Policy Drivers to Determining

Appropriate Connection Criteria

4.1 Renewable Targets

Do respondents agree that the CER should consider the connection of renewables as one of several drivers to be balanced in the development of an Enduring Connection Policy?



Ireland’s 40% renewable energy targets for 2020 and future European Climate and Energy Goals [and potential fines due to non-compliance] remain important drivers of Enduring Connection Policy. Ireland is heavily reliant on importing fossil fuels to meet the countries nation demands for electricity. The CER should prioritise applications that encourage renewable indigenous sources of electricity.

An independent study carried out by Baringa Energy Consultants have estimated that Ireland will fall considerably short of the 40% renewable targets.

“Both RoI and NI have set a target of sourcing 40% of electricity consumption from renewable sources by 2020, mainly from wind. We have conservatively assumed 1360 MW of wind capacity (1055 MW in RoI and 305 MW in NI) added to the system between 2015 and 2020 in all scenarios. This leads to total renewable generation (including hydro) of 31 to 32.5% of total generation in 2020, depending on the scenario taken.” - Baringa Irish Energy Report December 2015.

Elgin calls for the connection of renewables, including Solar PV which can be quickly deployed, to be prioritised, to help Ireland diversify its renewable energy mix beyond its current reliance on wind; to offset any shortfall in predicted wind capacity due to planning delays; and to ensure that Ireland’s RES-E 2020 targets and beyond are met; and hefty EU fines avoided.

4.2 Interconnection, Demand and Generation Forecasts

Should connection policy make explicit provision for interconnectors? If so, what issues should the CER take into consideration?

Elgin believes that Interconnectors provide a vital gateway to access European markets and should be facilitated to encourage competition and enhance security of supply.

4.3 Treatment of Non-GPA Applications

Should the technologies and projects currently covered under the non-GPA process be processed under the GPA process when the new connection policy is implemented?

Elgin Energy contends that the proposed CER review of non-GPA applications, particularly for Solar PV technology, is premature given the length of time that the non-GPA process has been open for solar applications. In this context, Elgin Energy believes that the existing non-GPA process should be maintained in the interim. In addition, in order to ensure that existing applicants that were lodged in good faith are not disadvantaged by a new process, Elgin calls on the CER to ensure the first 5 applications at each 110kV node are processed in date order prior to a new process being implemented.

Elgin Energy has engaged with the System Operators at an early stage in the development of its projects and has invested considerable sums of money in lodging grid applications to the non-GPA process.

Rather than a blanket GPA process to address clustering retrospectively, Elgin recommends that System Operators are encouraged to increase network capacity transparency to ensure more targeted applications – for example in the form of heat



maps similar to those used by UK Distributed Network Operators. Currently a grid application connection fee of €8,956 is payable to System Operators before the applicant is informed of the likelihood of connection and position within the queue to be processed. Planning costs are also likely to be incurred by developers with no guarantee of local network capacity. Increased transparency would allow developers to plan responsibly, reduce speculative applications and alleviate pressure on the system.

Furthermore, SOs should be instructed by the CER to process non-GPA applications in a timely manner and in accordance with CER/09/099 guidance set out for the non-GPA process. Specifically, applications that are currently with the System Operators should be processed in a sequential date order fashion within the 90 day timeframe as set out by ESBN until such time that an agreed policy can be implemented. Grid Offers should be issued without delay. These offers should also take priority over the processing of future applications.

Future grid offers should also be issued and accepted in a more expedient timeframe than is currently being realised. Elgin believes that a universal GPA process/gate system will delay the issuance of offers and a model similar to that implemented by many of the DNOs in the UK should be enacted, whereby development companies can engage with the System Operators and request a grid offer for a minimum cost with a high level of certainty that an offer will be made within a matter of weeks. This system is operated on a first-come-first-served basis.

In any new process, the System Operators must commit to a quicker timeframe than 90 days and the developer must not delay on the acceptance of the offer by only allowing 30 days to accept. A more expedient timeframe for delivering projects should be encouraged in a future policy to reduce hoarding of capacity by shortening the existing long stop dates.

Elgin has made 51 applications to date to the system operators under the non GPA process. We expected by the end of January to receive a number of grid offers, however, to date we have only received one. This current delay by the system operators is not allowing developers to accept valid grid offers and delaying further applications in the queue system.

Should some categories of project be processed outside the GPA process when the new connection policy is implemented?

As above, in order to ensure that existing applicants that were lodged in good faith are not disadvantaged by a new process, Elgin calls on the CER to ensure the first 5 applications at each 110kV node are processed in date order prior to a new process being implemented.

4.4 Connection and Access Considerations

4.4.1 I-SEM Design: Do respondents agree that the CER should progress the development of theEnduring Connection Policy in advance of I-SEM go-live? N/A

4.4.2 DS3: Should connection policy facilitate a mix of generation and in particular facilitate providers of system services? Should connection policy focus on certain technology types or rely entirely on market signals?



To encourage a prosperous low carbon economy, technologies that assist the development of renewable energy projects should be prioritised. Lithium Ion battery technology and other storage projects are in their infancy and will provide vital services to help the deployment of renewable technologies and reduce our reliance of fossil fuels.

4.4.3 Network Issues: Should projects which make the most efficient use of the existing network be prioritised over projects driving more deep reinforcements?

Yes. Elgin supports the prioritisation of projects such as solar PV, which can be swiftly deployed and reduce the requirement for system reinforcement which will ultimately contribute to Ireland’s renewable energy targets and reduce the eventual cost to the end-user.

“T” connections for generators which would help make the most use out of the existing network and reduce the need for expensive station upgrades should be encouraged similar to the UK and other European Jurisdictions.

4.4.4 Demand: Should large demand connection which makes the most efficient use of the existing network be encouraged through the Enduring Connection Policy?

Yes. In addition, Elgin believes that the current system prohibiting auto-production, unless the generator is contained on site, should be reviewed as part of the Enduring Connection Policy framework to:

1. Enable large demand users to minimise their impact on the existing electricitynetwork, and;

2. Promote the generation of local electricity to meet local demand minimising thedemand on the transmission network.

4.4.5 Government Commitments and European Policy

4.4.6 Community Based Schemes: Are there any specific issues the CER should take into consideration regarding community based schemes?

Elgin welcomes the recent extension of the Better Energy Communities Grant Scheme to support community-based renewable electricity projects for the first time and supports local energy generation to meet local demand where appropriate.

4.4.7 Planning and Consenting Considerations: Should the CER include planning permission in the criteria for receiving a connection offer?

No. Without knowledge of cost of the connection fee, the proposal to require developers to achieve planning permission for a site in advance of the issuance of a grid offer is unreasonable.

In the current system, the System Operators will not release sufficient information to allow applicants to risk-assess additional costs to secure planning on sites.

Further, the O’Grianna High Court decision indicates that unless an applicant has considered connection to the grid, planning will not be granted.

Consequently, without a valid grid offer, the developer cannot develop a robust planning application and therefore runs a serious risk of an appeal, incurring further costs.



4.5 Conclusions

Have we identified the correct policy issues? Are there policy issues which we have not accounted for?

As per s.4.4.4. above, Elgin believes that the current system prohibiting auto-production, unless the generator is contained on site, needs to be reviewed to:

1. Enable large demand users to minimise their impact on the existing electricitynetwork and;

2. Promote the generation of local electricity to meet local demand and minimisethe demand on the transmission network.

Should the GPA process be retained? And should there be more frequent rounds of offer processing?

Elgin believes that the GPA/gate system will delay the issuance of offers and a model similar to that implemented by many of the DNOs in the UK should be enacted, whereby development companies can engage with the System Operators and request a grid offer for a minimum cost with a high level of certainty that an offer will be made within a matter of weeks. This system is operated on a first-come-first-served basis.

Should the non-GPA approach be revised?

See 4.3 above.

5. Proposed Transitional Arrangements

5.1 Release of Existing Capacity

5.2 Existing Connections

5.3 Units seeking to provide System Services required by the TSO

Whether these transitional measures should be implemented ahead of the development and implementation of the Enduring Connection Policy?

The proposals to release capacity back to the system by offering to refund first stage payments is welcomed. Elgin contends that application fees should also be refundable as currently the developer is unclear at submission where the project sits in the queue.

All projects that are unlikely to be connected should be refunded the initial application fee and future applicants should be made aware of the existing number of applications in an area before submitting a connection application form.

The timing of such arrangements (30th June 2016 for policy measure (1) and (2)):

The timing is reasonable, provided existing non-GPA applications are provided for in line with the recommendation that the first 5 applications at each 110kV node are processed in date order prior to a new process being implemented.

The appropriate level of increase in capacity under policy measure (2) to deliver most final customer benefit.



Elgin does not agree with the CER’s proposal to allow current generators to increase their MEC by 10%. This policy will disadvantage those applicants that have applied in good faith and, as capacity is limited, will only serve to benefit those that already have had connections and discourage competition in the market.

In addition, many of the recent grid connection offers are for generators located in isolated areas and a significant amount of lost generation would occur due to the length of connections from centres of electrical demand.



About Elgin Energy

Elgin Energy is an Irish owned and headquartered Solar PV development company and a proven

developer of large scale ground mounted Solar PV projects. Elgin has developed over 200MW in Britain

to date with a further 700MW at various stages of development throughout the UK and Ireland.

This includes a 50MW solar farm in Antrim expected to break ground in 2016 and five further projects

at various stages of development in Northern Ireland. Elgin’s developments total £160m potential

investment in the region with the capacity to generate 160MW of renewable, affordable energy for

the Northern Ireland in the coming years.

Elgin also has over 50 projects underway in the Republic of Ireland, with the potential to create up to

an estimated 1500 direct jobs (c. 2500 indirect) by 2020 and investment of €360m across all four

provinces.

Elgin is committed to best practice stakeholder and community consultation and environmental

scoping and has extensive experience of planning, connection and installation. All Elgin projects are

privately financed by Elgin Energy EsCo Limited – Elgin’s Low Carbon Energy Investment Vehicle. Elgin

also leads all aspects of the development and construction phases of its projects and intends to

operate and manage all sites in the Republic of Ireland, creating jobs and acting as a key driver of

Ireland 2020 post-subsidy potential.

Elgin Energy Services Ltd

2nd Floor

134/135 Lower Baggot Street

Dublin 2

T: +353-1-660 0190

E: [email protected]

www.elegin-energy.com

mailto:[email protected]

Title PageReview of CER Grid Connection Policy Final

submission to the cer's review of grid connection …...reducing its reliance on imported fossil...

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