STRUCTURE OF ELECTRICITY INDUSTRY IN IRELAND

1         KEY FEATURES OF THE ELECTRICITY INDUSTRY IN IRELAND

1.1         WHOLESALE MARKET & SYSTEM MARGINAL PRICE

1.1.1        SINGLE ELECTRICITY MARKET – SEM

The Single Electricity Market or SEM is the wholesale electricity market operating in the Republic of Ireland and Northern Ireland. It is regulated by the Commission for Energy Regulation (CER) in the Republic of Ireland and by the Utility Regulator in Northern Ireland.

It was created in 2007 to combine the two separate markets. The aim of the SEM was to provide competitive, sustainable and reliable wholesale electricity market and deliver long-term economic and social benefits, as well as lower cost of electricity generation.

1.1.2        SINGLE ELECTRICITY MARKET OPERATOR

The SEM is operated and administrated by Single Electricity Market Operator (SEMO). The organization is managed by Eirgrid in the Republic of Ireland and SONI in Northern Ireland.

1.1.3        SYSTEM MARGINAL PRICE

The SEM design is a centralised and mandatory all-island wholesale pool market, through which generators and suppliers trade electricity. Generators submit bid into this pool based on their fuel related operating costs.

Figure 1. SEM – Wholesale electricity market all-Ireland[1]

The System Marginal Price (SMP) is determined by SEMO based on generator costs and on customer demand for electricity in half-hour periods. The SEMO determines the cheapest generator cost bids necessary to meet the demand. The most expensive generators are “out of merit” and they are not run and are not paid SMP, keeping prices down.

Figure 2. More expensive generators are “out of merit” and hence they are not run and are not paid SMP.[2]

The mandatory centralised pool model in SEM in which all generators and suppliers must participate, has provided more transparency, and brought in new efficient generators into the market. Hence, providing environmental benefits. This has helped to keep prices down and provide security of supply.

1.2         FUEL MIX TRENDS

1.2.1        ELECTRICITY DEMAND

Electricity demand is a fundamental aspect when analysing energy generation and assessing the capacity market. It is important to understand the energy demand to ensure just enough generation to keep the system.

THE EFFECT OF WEATHER ON DEMAND

Temperature has a great impact on electricity demand in Ireland and Northern Ireland. For this reason, some historical data are adjusted.

Most of the sources used for this assignment refers to this adjustment as normalised or temperature correction and in other it does not adjust the figures. Therefore, some results might differ.

Figure 3. Past values of recorded maximum demand. [3]

1.2.2        FUEL MIX FOR ELECTRICITY GENERATION

Since the mid-1990s until now the use of higher efficiency natural gas plants and the increase in production from renewable sources. Between the years 2001 and 2004 took placed an increase in imports of electricity and the closure of old peat fired stations, as well as the coming of a new steam Combined Cycle Power plant (392 MW in August 2002 and 343 MW in November 2002).[4] These shifts in generating technology have had a direct effect in the efficiency of electricity supply.

Figure 4. Efficiency of electricity supply. Source SEAI 2017 Report[5]

Electricity generation has increased significantly over the period 1990-2017, the share of renewable sources on electricity generation has being increasing since 1992, due to the new wind power capacity.

Fuel-mix for electricity generation by fuel type:

Table 1. Percentage of fuel-mix provided by CRU 2017 report. (These figures represent the breakdown of the mix of energy provided by suppliers to their costumers)

In the table 1 above results for renewable energy is includes GOs imports, which differs considerably we compared with results published by the Sustainable Energy Authority of Ireland for 2016.

Figure 5. Flow of Energy in Electricity Generation 2016 – Outputs by fuel[6]. Note: Output percentage for Wind Energy was 20.4% (22.3% normalised) and overall number do not include imported GOs

1.2.3        THE ADOPTION OF WIND GENERATION

The first commercial wind farm was installed in Ireland in 1992 at Bellacorrick, co Mayo with a total installed capacity of 6.45 MW. Since then wind energy capacity has been gradually increasing to EU targets for renewable energy. Nowadays the largest wind farm intalled capacity is in Meenadreen, co Donegal with a power of 95 MW.

At the present there are 226 wind farms operational in the Republic of Ireland and 276 in the all island the current installed capacity is 4,471 MW in the Republic of Ireland and 1,160 MW in Northern Ireland.

Wind capacity between 1997 to 2017 for the Republic of Ireland is shown in the table below:

Table 2. Ireland´s wind capacity 1997-2017[7][8]

Year

Wind Capacity (MW)

Year

Wind Capacity (MW)

1997

57.23

2009

1264.832

1998

62.23

2010

1405.948

1999

70.81

2011

1613.908

2000

117.16

2012

1738.498

2001

123.56

2013

2,232

2002

135.46

2014

2,263

2003

209.72

2013

2,232

2004

336.14

2014

2,263

2005

492.94

2015

2,447

2006

673.64

2016

2,779

2007

740.98

2017

3,311

2008

939.512

2018

–

Fuel-mix of renewable energy:

Table 3. Renewable Energy (%) Contribution to Gross Final Consumption.[9]

1.2.4        THE ADOPTION OF CCGT AND PEAKING PLANTS

The majority of the power plants in operation today use Combined Cycle Generation Turbines (CCGT) technology, thus the gas turbine is used to produce electricity in combination with a bottoming water-steam cycle. By using waste heat from the gas turbine exhaust to generate electricity, the net result is highly efficient overall plant with low emissions.

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CCGT plants were designed to generate electricity 24 hours a day, seven days a week. However, with the recent growth in wind generation, CCGT plants are expected to operate in a more flexible way, thus when the wind is blowing, the demand for electricity from conventional generation falls, and when the wind drops off, more electricity from conventional plant is needed to meet the demand. This process is known as ‘two-shifting’, and is a common requirement for CCGT plants.

The simple cycle peaking plants, or peakers, are power plants generally run only when there is a high demand for electricity. The impact of those peaking plants effect to the cost electricity prices, due to in peaking plants the fuel would be the same price as in CCGT, but those cost for much lower capacity and fewer hours of operation results in higher electricity prices.

1.3         SUPPLY CHAIN

1.3.1        GENERATION

1.3.1.1         ESB GENERATION

1.3.1.2         WINDFARMS

1.3.1.3         INTERCONNECTORS

Currently the transmission networks of Northern Ireland and the Republic of Ireland are connected electrically by means of one 275 kV double circuit connection

1.3.1.3.1        EAST-WEST INTERCONNECTOR (EWIC)

The East–West Interconnector is owned by EirGrid and links the electricity grids of the island of Ireland and Great Britain via submarine cables running between converter stations in Ireland and Wales. It was completed in 2012 and it is a High Voltage Direct Current (HVDC) connection capable of providing capacity of 500 MW, flowing in both directions (import / export).

1.3.1.3.2        NOTHERN IRELAND – SCOTLAND INTERCONNECTOR

It links in Great Britain through the Moyle Interconnector to Scotland. The interconnector has a nominal capacity of 500 MW.[10]

1.3.1.4         IPPS

1.3.2        NETWORK: TRANSMISSION & DISTRIBUTION

The infrastructure around the country is divided in distribution and transmission network. The transmission network is in charge of sending electricity from generating stations to main points in the country, operates at high voltage and is the backbone of the electricity supply system. Eirgrid is responsible for the operation, maintenance and development of the transmission system.

The distribution network sends electricity supply to customers, and operates at medium to low voltage. ESB Networks is responsible for the operation, maintenance and development of the distribution network in Ireland.

1.3.3        SUPPLY

1.4         INTERCONNECTION & SECURITY SUPPLY

1.4.1        ENERGY SECURITY

The International Energy Association (IEA) defines energy security as “the uninterrupted availability of energy sources at an affordable price”[11]and it relates to energy import dependency.

The geographical location of Ireland means that it is naturally isolated from the European electricity grid and the small market size leads to risks to the security of supply and possible reduction of competition.

This isolation has been addressed by building interconnection infrastructure that links Ireland to other markets. Ireland currently has electricity interconnection with Northern Ireland (as part of the Single Electricity Market) and with Great Britain.

Figure 7. Import Dependency of Ireland and the EU. Ireland’s dependency changed after 2016 due to start of natural gas production on the Corrib gas field. [12]

1.4.2        I-SEM

As discussed earlier the wholesale Single Electricity Market (SEM) for the all-Ireland is in operation since 2007. However, European Union is currently in the process of developing the Integrated Single Electricity Market which will introduce a free trade of electricity across the borders as the part of European single market.

The Integrated Energy Market will join 20 countries including, coupled by 38 cross-border interconnectors, containing a total generating capacity of over 3,000 terawatts (TW).[13]

Figure 8. Internal market showing cross-border interconnectors.[14]

1.4.3        CELTIC INTERCONNECTOR

European Union goal is to develop an Internal Energy Market within Europe. This will require the physical infrastructure of interconnection between Ireland and mainland Europe.

EirGrid is currently exploring an interconnector between Ireland and France, known as the Celtic Interconnector. A series of joint studies between Eirgrid and the French transmission system operation (Réseau de Transport d’Électricité – RTE) have been carried out since 2011 and final decision will be taken by 2021.

The capacity of the Celtic Interconnector is estimated at approximately 700 megawatts (MW), and the length of the subsea cable would be have a total length of approximately 600 km. [15]

The purpose of this interconnector is to improve security of supply for Irish electricity users, by providing Ireland with direct energy connection to an EU Member State once the United Kingdom leaves the EU, and to increase competition and efficient use of renewables.

1.5         REGULATORY FEATURES

1.5.1        ELECTRICITY SUPPLY BOARD ACT, 1927

1.5.2        ENERGY DIRECTIVE, 1996

1.5.3        THE COMMISSION FOR ENERGY REGULATION, 1999 & 2003

“The Commission for Energy Regulation (CER) is the independent body responsible for regulating the natural gas and electricity markets in Ireland.” CER Factsheet on the Single Electricity Market April 2011

2020

1.6         REFERENCES

CER Factsheet on the Single Electricity Market. https://www.cru.ie/wp-content/uploads/2011/07/cer11075.pdf

Sustainable Energy Authority of Ireland (2015), Energy Security in Ireland, www.seai.ie

2         ENERGY MARKET INTEGRATION

The Single Electricity Market (SEM) is undergoing through significant change. EU legislation is driving a merge of energy markets across Europe. The purpose is to create a fully liberalised internal electricity market.

The new wholesale market will be known as the Integrated Single Electricity Market (I-SEM) and must be in place by the end of 2017. The I-SEM will deliver higher levels of competition as well as lower prices and increase security of supply and transparency.

2.1         European market integration

2.2         Grid development

2.3         The future of renewable energy

Project Ireland 2040, the National Planning Framework13, sets out a number of priorities for policy in the energy sector, including commitments around decarbonising the energy system, increasing renewable energy and reinforcements of the distribution and transmission network to facilitate planned economic growth, to strengthen energy security and to support an island population of up to 8 million people.

http://www.eirgridgroup.com/annual-report-2017/

3         ELECTRICAL TARIFFS

Most loads on an electrical distribution system fall into three categories: resistive, inductive and capacitive. The most common is inductive, this includes transformers, fluorescent lighting and AC induction motors. Most inductive loads use a conductive coil winding to produce an electromagnetic field that allows the motor to function.

Inductive loads require two kinds of power to operate. Active or useful power to produce motion, and reactive or magnetic power to energise the magnetic field.

In large industrial sites are likely to used electrical equipment that requires wattless energy to operate. Wattles energy is measure separately from the general units, and if you exceed a certain limit, it will result in an extra charge.

3.1         POWER FACTOR

“Power factor is the ratio between the useful power (kW) and the total power (kVA)consumed by an item of A.C. electrical equipment or a complete electrical installation. It is a measure of how efficiently power is converted into useful work output.” IEEE https://electrical.theiet.org/media/1687/power-factor-correction-pfc.pdf

3.1.1        TRUE, REACTIVE & APPARENT POWER

True or active power is the current and voltage consumed and registered on the meter. It performs the actual work, such as creating heat, light and motion. True power is expressed in kilowatts (kW), which is expressed in kWh on your electric meter.

Reactive power is not useful work, but it is required to sustain the electromagnetic field associated with commercial and industrial loads. Reactive power takes space in the distribution lines. It is measured in kVAr, kilovolt-amperes-reactive.

The resultant capacity is known as apparent power or total power, it is measured in kVA, kilovolt-ampere.

Figure 2.IT Sligo notes

3.1.2        BENEFITS OF A GOOD POWER FACTOR  taken from GMIT notes need to verify

–          Environmental benefit. Reduction in power consumption due to improve energy efficiency means les gas emissions and fossil fuels by power stations.

–          Reduction of electricity bills.

–          Extra kVA available from the existing supply.

–          Reduction of I2R losses in transformers and distribution equipment.

–          Reduction on voltage drops in long cables.

–          Extended equipment life by reducing electrical and heat burden on cables and electrical components.

3.1.3        DISADVANTAGES OF POOR POWER FACTOR

–          Larger cables required carrying the same load.

–          Larger switchgear and transformers required.

–          Larger currents give rise to higher CU and AL losses in cables.

–          Larger currents give larger voltage drops in cables.

3.2         ENERGY BILLS

The following sample electricity bill was provided. Some penalties ….

3.2.1        LOW POWER FACTOR SURCHARGE

If the number of wattless units you use in a single billing period exceeds a limit of one-third of all your general units, a charge will be applied. The term power factor is to express the ratio between active and reactive power. A power factor of 0.95 must be maintained in order to avoid wattless charges. Power factor values can vary from 0 to 1. The closest to 1 the better power factor.

In the case of consumption of wattless units increases above one third of your total units per bill, then the power factor will drop below 0.95, and the low power factor surcharge will be applied.

To improve the power factor, it is necessary to fit power factor correction equipment to reduce the amount of reactive power consumed. Power factor correction is achieved by the addition of capacitors in parallel with the connected motor or lighting circuits.

Power distributors offer incentives for operating with a good power factor better than 0.95,.by for example penalizing consumers with a poor power factor, in order to reduce wasted energy in the distribution system.

Figure 1. A phase angle difference, ϕ exists between voltage and currents in an AC circuit. The cosine of ϕ (or Cos ϕ) is termed as the power factor. https://www.electronicshub.org/power-factor-and-its-correction/

3.2.2        WINTER MAXIMUM CHARGE

3.2.3        MAXIMUM IMPORT CAPACITY (MIC)

The maximum import capacity is the maximum electrical capacity of the connection point between ESB networks and the customer. In order to maintain standards of supply, the customer’s demands should not exceed the max. capacity agreed. MIC is measured in kVA

Customers are charged based on Maximum Demand. Maximum Demand is the highest demand value during billing period. Maximum demand meters record customer’s consumption over 15-minute intervals.

3.2.4        REDUCTION OF UTILITY BILL

Electricity bill details:

Tariff= Low Voltage Demand Tariff

Billing period= 1 January – 31 January = 31 days = 744 hours

Day units= 45,409 kWh

Night units= 14,984 kWh

Total units= 60,393 kWh

Wattles charges= 5,169 kVAr hr

3.3         REFERENCES

Section 3:

IEEE https://electrical.theiet.org/media/1687/power-factor-correction-pfc.pdf