Dáil Éireann Debate, Tuesday - 29 January 2013
492. Deputy Jack Wall asked the Minister for Communications, Energy and Natural Resources when will gate four offers be forthcoming; if it is necessary for all gate three offers to be determined prior to this offer; the grid connection price, if any, that will be charged; and if he will make a statement on the matter. [3783/13]
View answer493. Deputy Jack Wall asked the Minister for Communications, Energy and Natural Resources when the CER is making their decision with regard to Gate three offers, the grid connection fee, if any, that will be charged per megawatt; and if he will make a statement on the matter. [3784/13]
View answerI propose to take Questions Nos. 492 and 493 together.
Supervision of the grid connection process is vested in the Commission for Energy Regulation. The Gate 3 Direction to System Operators (CER/08/260) published in December 2008 set out the list of projects to receive grid connection offers. As explained in the Direction, Gate 3 was designed to ensure the 40% target for renewable electricity (RES-E) by 2020 could be achieved and this was based on an assumption that 5800MW of renewable generation would be required. Gate 3 followed Gate 1 and Gate 2 and provided for additional grid connection offers totalling almost 4000MW. Since then, due to changes in economic conditions, SEAI estimated for the First Progress Report on the National Renewable Energy Action Plan (NREAP) that the amount of MW needed to meet 40% RES-E has fallen to approximately 4000MW.
Gate 3 grid connection offers were issued between December 2009 and mid-2011. All offers have now issued and to date, there has been approximately 10% take up. The low take-up to date is primarily due to a delay in technical market decisions from the All Island SEM Committee. I am concerned about this delay and its potential impact on meeting our renewable energy targets. I understand that the key decisions will be made shortly by the SEM committee. This should bring clarity to the situation in relation to the take up rate of Gate 3 connection offers and which projects intend to proceed to build. I expect that the outcome will be that there is still sufficient capacity in Gate 3 to ensure that our 40% RES-E target can be met. The matter will, however, be kept under ongoing review.
The implementation of Gate 3 requires a significant amount of grid build and grid upgrade, which will be challenging to achieve in the period to 2020. EirGrid’s Grid 25 implementation plans are designed around building the necessary grid and upgrading the grid as necessary, in order to build the necessary grid to underpin the Gate 3 grid connection offers and to deliver on our 2020 targets. Any decision on a potential future Gate will have to be considered in the context of the SEM committee processes already underway.
In terms of the cost of grid connections, costs will vary by project connecting, in line with the “shallow connection” principle. The National Renewable Energy Action Plan (NREAP) available on my Department’s website www.dcenr.gov.ie explains the processes that are in place. The rules outlining cost sharing and bearing of network technical adaptations are published by EirGrid and approved by the Commission for Energy Regulation (CER.) The capital costs of connection and technical adaptation are divided between producers, transmission and distribution system operators using a methodology based on a version of the “shallow connection” principle. This means that the costs of the immediate connection assets to the network are borne by the connecting producer while the costs of additional reinforcement of the surrounding base network are recovered through a tariff imposed on all users of the system. This costing mechanism has evolved from a number of CER decisions over a number of years. The relevant rules outlined are based on objective, transparent and non-discriminatory criteria. The DSO (ESB Network) document ‘Standard Prices for Generators 2010’ provides details and descriptions of standard connection building blocks and may be viewed at:
http://www.esb.ie/esbnetworks/en/commercial-downloads/Standard-Prices-for-Generator-Connections.pdf
