Belfast Telegraph

NI Water looks towards the sun to make vital supplies more efficient

Analysis

By John Simpson

NI Water has installed a commercial solar energy plant to help make water supplies more efficient. A 5 MW solar array is cutting the costs of pumping fresh water supplies from Lough Neagh.

Moving water supplies and disposing of waste water depends on the assistance of electricity to pump supplies to the best positions in the province-wide network.

Perhaps surprisingly, NI Water is the largest single user of electricity in Northern Ireland. 

There should be no surprise that NI Water has a keen interest in the price that it pays for electricity. 

Large areas of land are used to serve as water catchment areas. NI Water now has an interest in the possibilities of generating some of its own electricity from on-shore wind farms and from any array of solar powered panel capacity.

The Dunore Water Treatment Works is now the 33 acre site for an impressive solar array.

The investment by NI Water in its own renewable energy scheme on the shores of Lough Neagh represents an example of good housekeeping.

NI Water has invested £7m in this solar array.

The business plan expects the investment to reduce the electricity bill for NI Water by £0.5m each year.

On their own, these basic figures do not show the expected net return on capital, but they do point to a positive net return that justifies this investment.

As with all additional renewable capacity being admitted to the Northern Ireland grid, there are now wider questions on the scale and sustainability (or reliability) of these additional renewable energy sources. 

In the last five years, Northern Ireland has experienced a rapid large scale investment in smaller wind farm-based electricity generation units, as well as a number of other solar schemes.

The original schemes to incentivise investment in renewable electricity sources have now been closed to new entrants, whether using on-shore wind or solar power.

The investors accepted under the former schemes (which is now closed to new investors) have been given the equivalent of a 20 year subvention in the form of valuable ROCs: renewable obligation certificates.

These certificates have value since electricity suppliers, across the UK, have obligations to purchase a proportion of their supplies from renewable sources. 

This is delivered through a UK market in ROCs where, interestingly and coincidentally, many of the NI earned ROCs are sold to English suppliers.

NI Water now earns 1.4 ROCs on its Dunore array. This effectively converts the £7m investment from a just marginally useful financial decision into a source of useful ‘profit’.

Applicants to install renewable capacity are no longer entitled to earn ROCs.

Nevertheless, in Northern Ireland, the capacity already installed has increased faster than was originally forecast. 

The scale of the subvention has proved adequate. 

For Northern Ireland there have been problems in the engineering of grid connections to resolve. 

After a short-term delay in organising an orderly sequence to allow renewable generators to connect to the electricity grid, the complex questions of reliable and commercially sensible connections have been resolved.

In addition, there are other planning constraints on the scale of electricity supplies from variable (wind and solar) sources. 

There is pressure to maximise the availability of cheaper renewables, but also minimise the risk that too large a reliance on uncertain sources might leave an occasional supply shortage.

This question has been solved by flexible contract arrangements to top-up supplies (when needed) by using N-S and E-W electricity interconnectors.

NI Water has taken a successful initiative, secured a deal to supply electricity (largely, but not only for its own use), entitled to earn supplementary income through ROCs, with an unconstrained contract that the solar energy will be used, either internally or by any surplus going into the grid.

With the improving efficiency of solar energy, this is expected to be an attractive idea for further investment, even without earning ROCs.

Belfast Telegraph

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