DERIVING REVENUE FROM ENERGY;DEMAND SIDE REDUCTION & POWER GENERATION

PRESENTED BY:MICHAEL JACKSON MSc CEng FEI Chartered Energy Engineer

MANAGING DIRECTOR, ETI

21st March 2014

SINGLE ELECTRICITY MARKET - OPERATION

WHAT SERVICE DOES ENERGY TRADING IRELAND (ETI) PROVIDE ?

1. ETI contracts with each site owner/client and bids the capacity into the Single Electricity Market (SEM)

2. SEM pays ETI Capacity Payments – ETI pay each client as per the ETI/Client contract

3. ETI pays capacity annually - DSUs energy is recompensed by avoided demand, DUOS and TUOS during the time of dispatch.

4. There are three ways to reduce demand: - Direct demand reduction – pumps, fans, compressors, air conditioning etc. - Suppress demand using a stand-by diesel (or other generator) - A combination of 1 & 2.

WHY ARE CAPACITY PAYMENTS MADE?

1. Capacity payments are made to incentivise generators to provide capacity.

2. Capacity payments are made whether or not the generators are scheduled to run.

3. In UK and Ireland our maximum demand is in November – February but capacity payments still must be paid to ensure these power stations remain available and commercially viable.

4. Outside of the winter peak many of the expensive peak generators will not be required to generate as the demand will have reduced.

5. Generation and electrical demand must always be in balance every second. Failure to balance = blackouts.

NIE LOADCURVE

ETI Services

Aggregated Generating Unit Aggregated Demand Side Unit

M

NIE Network

G Load

M

MECM

NIE Network

G Load

WHAT IS REQUIRED FOR INCLUSION IN THE AGU?

System Requirements:- No longer financially viable for most sites!!

1. An MEC (maximum export capacity) – depends on the local NIE/ESB network £1200

2. A separate electricity meter required on generator tails - £600

3. Synchronizing panel - £10K

4. G59/G10, NVD, under/over frequency protection (costly!) NVD - £40K

5. NIE SCADA - £10K

6. Set up local RTU (remote terminal unit) to communicate with ETI’s SCADA system for monitoring and control of the generator controller and plant

7. Contract with Energy Trading Ireland (ETI)

DSU - WHAT IS REQUIRED?System Requirements:- Recommendation for most clients!!

1. An MEC (maximum export capacity) – NOT REQUIRED but will increase income potential. (Depends on the local NIE/ESB network)

2. A separate electricity meter required on generator tails – NOT REQUIRED

3. Contactors on switched circuits/loads – YES (if offering direct demand reduction)

4. Synchronizing panel - if you don’t want to ‘island’ the site.

5. G59 protection to Generator

6. Set up local RTU (remote terminal unit) to communicate with ETI’s SCADA system for monitoring and control of the generator controller and plant

7. Contract with Energy Trading Ireland (ETI)

WHY USE ETI SERVICE IN YOUR BUSINESS ?

• Your business has existing infrastructure which could be earning significant

revenue - large standby diesel generators /large demand which can be

reduced.

• Presently it is costing your business to maintain diesels.

• ETI provide a personalised service to maximise income. We discuss with

the client the income from capacity payments versus their operational

requirements. The client decides what they want ETI to trade!!

HOW MUCH COULD YOUR COMPANY EARN?

• Anticipated £15k - £20k/MW/yr (subject to technical feasibility).

• If using DSU the capacity payment will be based on your demand

curve and the load which we can reduced by ‘switching off’ and/or

using diesels for load suppression.

WHAT ARE THE RISKS? – FEW!!

• If the company previously carried out demand reduction they will

understand what is involved

• The diesels are paid for sharing their capacity with the SEM, irrespective

of whether, or not, they are called to run

• They are the most expensive generation available to the TSOs, therefore

will be the last to be ‘called’.

• In 2011-12 they were ‘called’ for 1hr in the whole year

• In 2012-13 they have not been called

• Capacity is increasing so the likelihood is diminishing

• Additional benefits: 24/7 monitoring of diesels and fuel stock levels