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CER Review of Connection and Grid Access Policy

AUTHOR(S): Garret Farrelly
PRACTICE AREA GROUP: Projects, Energy and Natural Resources
DATE: 06.04.2016

Overview

On 11th December 2015 the Commission for Energy Regulation (“CER”), the Irish energy regulator, published a consultation paper on the review of connection and grid access policy in the Republic of Ireland (the “Consultation Paper”). The Consultation Paper sets out the initial steps to be taken in implementing a new connection policy (“Enduring Connection Policy”) for the electrical system in the Republic of Ireland, the effect of which is to free-up capacity on the system and introduce a more streamlined application process. The CER states as its objective for introducing the new connection policy the provision of:

“a fair opportunity for generation to receive offers of connection to the network taking account of system needs, efficiency, national policy and consumer interest”.

Significance of the Consultation Paper 

The important aspects of the Consultation Paper are summarised below. To support the timely transition to the new Enduring Connection Policy, the CER considers that there are benefits to implementing the following policy measures and arrangements for connection to the grid more quickly where this supports the proposed connection policy objective. It is proposed that policy measures (a) and (c) listed below would be implemented before 30 June 2016. 

  • The CER have concluded that a number of applicants currently in Gate 3 may no longer be in a position to move forward with the project, despite having signed connection offers. The CER propose returning 100% of a project’s first stage payment to the applicant in consideration of the applicant’s termination of the connection agreement so that the capacity can then be allotted to another applicant (presumably whose project is more advanced with its permitting and is nearer to the commencement of construction).
  • The CER also intend to move away from the Gate 3 style system of application that has resulted in a high number of outstanding applications. Instead, the CER want smaller batches of applications resulting in quicker turnaround times for applicants, rather than the single window of application that operated in the case of Gate 3. The CER claim that a more flexible policy enables the achievement of the overall policy objective for greater connection and grid accessibility. Notwithstanding this change to the application method, the Group Processing Approach is set to remain.
  • Finally, the CER propose that the System Operators (“SOs”), EirGrid and ESB Networks, issue a modification to the connection offer/agreement of existing generators requiring them to increase capacity to no more than 10% of the maximum export capacity allocated to that generator. The CER argue that such a measure is the fastest and most efficient way of increasing capacity, provided the increase in capacity does not require a change to the connection assets.

Next steps

Stakeholder’s responses to the initial thinking set out in the Consultation Paper will be reviewed and will frame the discussion in a further consultation paper on the Enduring Connection Policy due in early Q2 2016. Following this, the CER will publish a draft decision paper on the Enduring Connection Policy in Q4 2016.

This article was written by Garret Farrelly, Partner and Michael Hackett, Solicitor in the Energy and Infrastructure Group.

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