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Background
The Commission for Regulation of Utilities (the “CRU”) recently published the Sharing of Maximum Export Capacity (MEC) behind a Single Connection Point Decision Paper (the “Decision”), which allows MEC to be shared between multiple generation (eg, wind, solar or gas generation) / storage technologies behind a single connection point for onshore projects. The System Operators (EirGrid and ESB Networks) are due to publish an Implementation Roadmap outlining the actions and timelines required to implement the Decision over the coming months.
We have set out below a high-level overview of the key provisions of the decision which will be of interest to stakeholders in the Irish energy sector.
Scope
The Decision applies to onshore hybrid co-located projects with a single legal entity behind a connection point.
| Key Definition
A hybrid co-located project is “a project that combines multiple forms of generation and/or storage technologies behind a single defined connection point to the electricity distribution or transmission network where the generation units for the different technologies are individually sub-metered and registered, and operate independently of one another for market, settlement, and dispatch purposes.” |
The Decision does not cover:
- integrated hybrid projects (which, in contrast to a hybrid co-located project, are where the generating units for the different technologies are registered and operate as a single unit for market, settlement, and dispatch purposes). See Appendix 1;
- offshore projects;
- Maximum Import Capacity (MIC) sharing (which the CRU flagged as being of particular interest for storage unit developers) or energy sharing (although the CRU did indicate an interest in gathering further information to develop its position on these topics); or
- the possibility to have multiple legal entities behind a single connection point who share a grid connection. This is expected to be dealt with as part of the work on the Private Wires Bill.
Key Provisions
| Topic | Analysis |
| MEC Sharing Permitted | The Decision means the contracted MEC at a single connection point may be dynamically shared between multiple generation and/or storage units within a Hybrid Co-located Project behind that connection point.
Under previous rules, each unit had to have its own ‘dedicated’ MEC that was allocated to that unit. For example a wind and battery storage project could have an overall MEC of 100 MW, but this would have to be allocated to each unit (eg, 75 MW for the wind farm and 25 MW for the battery storage project). Following the decision, the MEC of 100 MW could be utilised fully by the wind farm or battery storage project. Or, more likely, the developer would apply for a lower MEC (say 75 MW), the connection would be sized accordingly and then the wind farm and battery storage project would share this 75 MW between them depending on wind conditions, market pricing and so on. |
| Contracted MEC cannot be exceeded at the Connection Point | The aggregate generation and dispatch of all units at the connection point must not exceed the contracted MEC. Breaching the MEC is a breach under the connection agreement which could result in the System Operators taking action and so sites must put control or tripping mechanisms in place.
Participants will need to manage the MEC between technologies to remain within the contracted MEC. If the total potential export of the co-located generation exceeds the MEC, the participant must decide how each unit’s declared availability is capped. If applicable for the relevant generation type, Physical Notifications still need to be submitted for the relevant generating unit and again the participant must take steps to ensure that the contracted MEC is not exceeded across the Physical Notifications and remain within the declared availability of the individual technologies. |
| Independent Participation in the Market | Generating units for different technology types sharing MEC within a Hybrid Co-located Project will continue to be separately registered and sub-metered, and will operate independently (ie, for scheduling and dispatch, market participation, and system services provision). |
| Market Registration depends on Ownership of the Units | Where all units within a site are owned by the same participant, the units can be registered as a Single Trading Site or multiple Trading Sites. If different participants operate individual units in the market (including those sharing MEC) the site must be split as multiple Trading Sites each registered under its participant. |
| Adding a Technology Type | New Hybrid Co-located Projects or projects converting to a Hybrid Co-located Project increasing their MEC must apply for grid capacity through the ECP-GSS process.
Existing projects adding a new technology type to their connection but not increasing their MEC must apply using the Modifications to Generation Connection Offers process. |
| Priority Status | The addition of a Non-Priority Dispatch (NPD) unit to an existing Priority Dispatch unit will likely result in it being automatically treated as a “significant modification” (under SEM-20-072 and Article 12 of Regulation (EU) 2019/943) which means the Priority Dispatch status for the existing renewable unit will likely be lost. The CRU did however note that “further assessment will be required to understand how PD rules would be upheld, how curtailment and constraint would be allocated, and how internal interactions between units would be managed under a shared MEC limit”. |
Commentary
The Decision is a significant and positive development for those involved in the development of hybrid renewable energy projects in Ireland. According to the CRU, the ability to share MEC behind a single connection point is expected to remove barriers to hybrid electricity generation, unlock system and consumer benefits by reducing connection costs, reducing the need for network reinforcements and enabling the accelerated deployment of renewable generation.
However, how the Decision will be implemented in practice remains to be seen particularly given that the Implementation Roadmap has not yet been published. As flagged throughout the Decision, there are a significant number of topics which have yet to be developed and will require further consideration. These include MIC sharing, energy sharing, MEC sharing for hybrid offshore wind, the potential for synchronous generation units to share a connection point with a Power Park Module, capacity auction participation for hybrid units, how tariffs and charges are applied, MEC bond arrangements and the arrangements for multiple legal entities behind a single connection point.
Energy stakeholders will also be particularly interested in the SEM Committee’s further consideration of the loss of a project’s priority dispatch status arising from MEC sharing. However, it is not yet clear when that analysis will be provided.
Contact Us
If you have any questions on the Decision or any energy topics please get in touch with Owen Collins or Alison O’Brien or your usual Matheson contacts.
