Wind Power in Ireland Treatment of wind in

Wind Power in Ireland: Treatment of wind in the Single Electricity Market APEx Conference, Paris 16 th October 2007

Presentation Overview Introduction: Wind Power in Ireland Single Electricity Market (SEM): Overview Treatment of Wind in SEM

Presentation Overview Introduction: Wind Power in Ireland Single Electricity Market (SEM): Overview Treatment of Wind in SEM

Introduction: Wind Power in Ireland Power System: – Approximately 6500 MW generation installed (excluding wind) – Peak demand: 5035 MW – Minimum demand: 1814 MW – 803 MW Wind Power installed at present – Wind Grid Code – Priority Dispatch

Year 7 20 0 6 20 0 5 20 0 4 20 0 3 20 0 2 20 0 1 20 0 0 20 0 9 19 9 8 19 9 7 19 9 6 19 9 5 19 9 4 19 9 3 19 9 2 19 9 Installed Wind Power (MW) Wind Power in Ireland to end 2007 1000 900 MW 900 800 700 600 500 400 300 200 100 0

Wind Power in Ireland: Future… Government Targets for Renewable Energy: 15% – 15% of electricity from renewable resources by 2010 • approximately 1160 MW of wind required – 33% of electricity from renewable resources by 2020 • in the region of 4600 MW of wind required • Ireland well placed to meet these targets: Connected Contracted Offer Process In Queue Total: 803 MW 451 MW 1344 MW 2923 MW 5521 MW 33%

Introduction: Wind Power in Northern Ireland Power System – Operated by SONI (Systems Operator for Northern Ireland) – 2132 MW generation installed (excluding wind and interconnection) – Peak demand: 1717 MW – Minimum demand: 561 MW 300 250 200 150 100 50 5 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 19 9 4 0 19 9 Installed Wind Power (MW) – 120 MW wind installed an additional 138 MW approved Year

Presentation Overview Introduction: Wind Power in Ireland Single Electricity Market (SEM): Overview Treatment of Wind in SEM

Single Electricity Market (SEM): Overview • Single Electricity Market: Joint market for both Ireland Northern Ireland • Dual Currency • Market Start: 1 st November 2007 • Mandatory pool with single clearing price – All energy must be sold directly into and bought from the pool – Separate physical energy trades are not permitted – De minimis level of 10 MW • Separate Capacity payment mechanism • Specific rules for “special” participants

Mandatory Pool Generator Unit TSO Dispatch Contracts for Differences Wholesale Market Pool Supplier Unit Generators bid in energy Suppliers buy @ SMP Physical Contract Customer

Presentation Overview Introduction: Wind Power in Ireland Single Electricity Market (SEM): Overview Treatment of Wind in SEM

Wind in SEM: Classification Yes Wind Grid Code Compliant? No Autonomous Variable Choice between being a Price Maker or Price Taker Price Maker Price Taker

Wind in SEM: Energy Payments • Price Takers – If wind blowing and wind power unit produces energy, it will receive single clearing price, SMP (System Marginal Price) for all energy produced • Price Makers – Scheduled by the market software based on the prices the wind power unit offers into the market. – Will receive SMP for scheduled energy

Wind in SEM: Constraint Payments • Price Taker – If dispatched down by TSO, each Price Taker wind power unit will still receive payment in full for what could have been produced • Price Maker – Always receive full energy payment for market schedule amount – If dispatched down: pay back avoided costs for difference – If dispatched up: receive costs incurred for difference Receive additional costs incurred Market Quantity Dispatch back avoided costs Pay Quantity Dispatch Quantity

Wind in SEM: Capacity Payments • Incentive to provide capacity adequacy through economic signals • Paid to all generators who provide capacity • Based on a combination of • Forecasted value of when capacity most needed • Actual availability on the day • Higher payments in times of small generation margins • In current market in Ireland: no capacity payment for wind • In SEM, all wind power units will receive a payment for available active power

Summary: Wind Power in Ireland • Increasing wind power in Ireland • Priority Dispatch • Price taker wind receives SMP for energy produced • Price maker wind receives SMP for market scheduled energy • All wind power units will receive capacity payments

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