Sunday 21 December 2008

€4bn worth of power stations seeking connection to grid

CER plans licensing overhaul as 50 projects await connection

THE Commission for Energy Regulation (CER) looks set to overhaul its approval system for new power stations after a flood of applications which has left up to €4bn worth of potential projects awaiting connections.

Sources said 50 projects with a combined capacity of 6,000 megawatts (MW), a similar level to the country's entire supply, were now seeking connections to the national grid.

These include large 400MW gas-fired stations, costing €350m each, from several major players. But the majority are smaller peaking plants, which step in during calm conditions when wind farms cannot produce power.

Most applications have been submitted over the past three months as investors seek to benefit from the forthcoming Gate 3 connection offers for wind farms.

Sources said the CER needed to alter its licensing system so it could quickly identify unviable schemes to allow Eirgrid, the national grid operator, to draw up long-term development plans.

"Due to the volume of renewable and conventional applications, the current system is beginning to creak," said a new CER connection report.

But CER is likely to continue to favour larger power plants because they produce cheaper electricity.

A CER spokesman confirmed the regulator was planning to alter its system for processing applications and would launch an industry consultation next month.

He said the renewed interest in conventional power generation was due to the single all-island electricity market introduced last year.

"Under the old market, if you didn't have enough customers, you had nobody to sell to and you could only really recover your fuel costs," he said. "The single market takes a lot of the risk out of power generation, giving new generators a good start."

The move is not expected to delay the processing of Gate 3 connection offers for wind farms and will have no impact on approved but unbuilt projects such as Seán Quinn's planned 445MW station in Co Louth.

But the independent interconnector being proposed by Imera may be delayed; although the CER has ordered Eirgrid to give the company a provisional connection offer, a final decision on the project will be made only when the new criteria are finalised.

Sunday Tribune

No comments: