Our panel discussion points to the need to adapt to changing market conditions and technologies.
The need for flexibility in a time of considerable change for the energy system was the main running theme in Gaelectric’s panel discussion on how energy storage related to the wider market.
NIE Managing Director Nicholas Tarrant welcomed the success of wind and solar energy and saw NIE’s ability to adapt to the pace of disruptive change as an important issue. “Having the flexibility to be ahead of the market and adapt to the market more quickly is going to be a key requirement for the future,” he commented. The company’s regulated contract is “quite rigid” and he wanted to see a more flexible model going forward, following the next price control review in 2017.
Jo Aston, the Utility Regulator’s Director of Wholesale Energy, commented that the changes in the market are “going to present fantastic opportunities for lots of new technologies and for development in the market.” The regulator is technology-neutral but looking for capacity to meet the system’s needs “and if you can show that you can deliver that, then you’ve got that ticket.”
Speaking for Gaelectric, Keith McGrane commended EirGrid’s DS3 innovation process and added that capital was ready to be deployed and money “flows to the place of least resistance”. Ireland has been “very good at getting everybody on board” with energy projects, UCD’s Damian Flynn remarked. “We need to be proposing solutions that will work for everybody,” he noted, adding that these need to make technical and economic sense. EirGrid’s Director of Operations, Andrew Cooke, explained: “Storage is obviously very welcome, not so much because of the issue around peak shaving and load shifting but because it comes from the characteristics of flexibility of response and reserve.”
Nicholas Tarrant explained that 80 per cent of capital expenditure in the current review period (RP5) is allocated for asset replacement. A further 8 per cent goes towards smaller projects on load growth with the remaining 12 per cent going into network reinforcement, including for renewables. He wanted to see more scope for avoiding asset replacement in RP6. From a regulator’s perspective, Jo Aston explained: “Where the business case is made and where the investment is justified, we’re happy to support it.” There is a need to be innovative and “think out of the box” as consumers’ money is involved.
On storage, Damian Flynn noted that Italy has experienced large scale growth in solar energy in recent years, accompanied by similar growth in battery installations.
In a response to a query by AES’ Brian Mongan about congestion in the transmission system at Islandmagee, Andrew Cooke said that EirGrid needed to consider the “totality of requirements” on the network. Jo Aston commented that the investment community needed to be “informed, engaged, assured and confident” and the regulator would play its part in that.
Keith McGrane described the subsidisation of carbon as “an outrageous market distortion” and welcomed commitments by Ikea and Apple to move towards carbon neutrality. This, in his view, could only achieved by a proper price on carbon. Damian Flynn commented that flexibility was harder to provide than capacity – and requiring conventional generators to be more flexible would increase their ramping and cycling costs. In Germany, conventional capacity has been maintained as it is needed to provide voltage support. He expected similar generators in Ireland to have a continued role in the system.