Certainty around use of the grid is critical to development of renewable energy projects. Two recent decisions in this area are outlined below.
Firm Access Methodology
We looked at EirGrid's proposal for a new Firm Access methodology here. It suggested giving projects dates by which they will get Firm Access, which is relevant to their entitlement to be compensated for being dispatched down, rather than linking Firm Access to completion of grid reinforcement, which is not within the control of individual projects.
The SEM Committee has now published its decision paper (SEM-23-004), largely supporting EirGrid's proposals. Answers to many of the questions raised by industry participants are to be considered in a more detailed methodology to be developed by the Commission for Regulation of Utilities ("CRU") in coordination with EirGrid.
In the meantime, key elements of the decision are as follows.
- Projects will be given time bound dates by which they will get Firm Access.
- Dates are to be allocated in an Annual Review process where analysis shows constraints are expected to be below a 'Firm Threshold' in a given year.
- Where the full Firm Access Quantity sought is not yet available, partial Firm Access can be granted (in blocks of 20 MW), with the size of a block to be reviewed in the more detailed methodology.
- Projects become eligible for Firm Access when they reach committed project stage. This has been determined to be connection agreement stage. It is stated that this will ensure certainty in advance of auction bidding or securing a CPPA. However, it is not clear how it applies in all scenarios, particularly as regards offshore projects bidding into ORESS1.
- First to be committed will be first to be firm. Provision of a longstop date for receipt of Firm Access Quantity is to be considered in the detailed methodology.
For offshore projects successful in ORESS1, Firm Access is to be provided no later than 2030. Firm Access allocation may be lost if a connection agreement is not executed by the end of 2025 or is terminated, or if a project loses its Maritime Area Consent.
Connected legacy generation is included in the methodology. However, batteries and other services providers are not. This position is to be reviewed once DECC completes the Electricity Storage Policy Framework. In the meantime it will be important to remain alert to Clean Energy Package legal requirements, such as those requiring a non-discriminatory approach towards market participants, defined to include energy storage services.
EirGrid is to carry out an initial firm access run in early 2023, capturing existing connected non-firm generation and offshore phase 1 projects.
Industry participants will be keen to see the detailed methodology to be elaborated in order to understand how these principles will apply in practice to their projects.
Offshore Grid Connection
The CRU published a decision ( CRU/2023/09) on the Offshore Grid Connection Asset Treatment for phase 1 projects that are successful in ORESS1. Key elements are:
- Asset Transfer: There will be an Asset Transfer Valuation for transmission assets to be transferred to EirGrid. Offshore Generator Transmission Use of System charges (OG-TUoS) will be developed for each project. An Asset Transfer Process will comprise a set of sequential gateways over 18 months. This will be reflected in the offshore form of Connection Agreement, which the CRU will consult on later this year.
- O&M: Eirgrid will fully assume responsibility for operation and maintenance following completion of asset transfer.
- Guarantee of Availability: From asset transfer throughout the period of ORESS support, scheduled outages (in excess of allowed days), unscheduled maintenance and unplanned outages that result in connection assets being unavailable for electricity transmission will be compensated at each project's ORESS strike price (unless ESB Networks' connection assets are unavailable simultaneously).
- Offshore Grid Charge: A new Offshore Demand Transmission Use of Service charge will become part of D-TUoS recovered from consumers via suppliers. It will cover O&M costs and compensation for outages.
The CRU will engage with EirGrid and phase 1 projects to develop the detail of the Asset Transfer Valuation and gateways, intended to be finalised in March 2023.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.