Belfast Telegraph

John Simpson: Will we still be able to keep the lights on?

Analysis

By John Simpson

Sensible advance planning that households and businesses will have an adequate sustainable electricity supply relies on a well prepared and co-ordinated appreciation of the contribution that is expected from a range of sources.

The main providers will be the electricity power stations supplemented by electricity supplies from either Scotland or across the Irish border: the two main interconnections. In addition, the electricity network is evolving to use increasing supplies from renewable sources: the now extensive range of onshore wind or solar powered units.

In mid-2018, the commercial scheduling of electricity supplies will switch to a series of new contractual relationships for the wholesale electricity market now being finalised and redefined for the whole island of Ireland as an Integrated Single Electricity Market (I-SEM).

The I-SEM brings to the electricity market a range of more modern contractual opportunities to offer wholesale pricing options which can be better incentivised to relate generating capacity to changes in market demand (and vice versa).

Electricity planning must anticipate the changing supply and demand, making informed estimates of the interaction of providers and customers for several years ahead. Critically, where generating capacity is expected to change then the Regulator, Government policy and decisions, and the actions of private sector investors must be integrated into a coherent forward view and plan.

This type of analysis has recently been undertaken by EirGrid and its subsidiary in Northern Ireland, SONI, on an all-island basis, with particular emphasis on the implications for Northern Ireland and separately the Republic of Ireland, and then from an all-island perspective.

The report offers cautionary comments on both the regulated functioning of the I-SEM as we leave the existing SEM as well as the expected changes in electricity supply capacities from existing generators.

There are three critical underpinning assumptions to this study.

First, the I-SEM will commence as planned in 2018 and the remaining uncertainties and difficulties will be resolved to facilitate an orderly change.

Second, the long-awaited high capacity cross-border interconnector from Tyrone through to Dublin will finally be approved, north and south, and will be completed by the end of 2020.

Third, the inter-connector to Scotland - the Moyle Interconnector - will be repaired and restored to its best commercial capacity.

Any failure to deliver on these three assumptions could be a serious problem.

Without the completion and full operation of the new cross-border interconnector and with the expected withdrawal of some generating capacity at Ballylumford and Kilroot, SONI forecasts that Northern Ireland would not have adequate generating capacity in 2021. Indeed, allowing only a small margin of spare capacity, or with major unexpected outages of a large plant, Northern Ireland would be trading with a potential shortage in late 2019 or in 2020.

SONI has anticipated the withdrawal of 250mw of capacity in Northern Ireland at Ballylumford in 2018, which has an option for a two-year extension, and the withdrawal of 514mw of capacity at Kilroot between 2020 and 2023. The Kilroot capacity closure is required because of the Industrial Emissions Directive. From 2020 to 2023 because of the IED limitations the coal burning units at Kilroot would be limited to running for only 1,500 hours each year.

A further planning constraint for Northern Ireland follows from the decision by the I-SEM authorities to work on an assumption that the Moyle Interconnector should be treated as only available at 50% of its notional capacity, partly because there may be capacity constraints in drawing electricity from the GB grid.

A recent private sector initiative by Belfast Power, owned by Evermore Energy, for a new 480mw gas fired power station in Belfast Harbour estate offers an important method of easing a potential future Northern Ireland crisis.

Even with this possible new capacity, the Northern Ireland authorities (the Executive, the Regulator and SONI) have good reason to take care to avoid passively drifting towards difficult trading conditions.

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