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Treatment of Small, Renewable and Low Carbon Generators

outside the Group Processing Approach

DOCUMENT TYPE: Decision Paper


REFERENCE: CER/09/099
DATE PUBLISHED: 24 July 2009
QUERIES TO: Paul Hogan phogan@cer.ie

The Commission for Energy Regulation,


The Exchange,
Belgard Square North,
Tallaght,
Dublin 24.

www.cer.ie
CER/09/099 – Small, Renewable and Low Carbon Generators Decision 24 July 20009

CER – Information Page

Abstract:

The purpose of the paper is to outline the Commission‟s decision following the
comments received to the consultation document “Treatment of Small, Renewable and
Low Carbon Generators outside the Group Processing Approach” (CER09/044)
published on 27 March 2009. The Group Processing Approach (GPA) is the process by
which renewable generators receive a connection offer for connection to either the
transmission or distribution system; the current iteration is Gate 3. Therefore this
decision document details how small, renewable and low carbon generators that fulfil
public interest criteria would be processed outside the GPA. The public interest criteria
and the classes of technologies that fulfil these criteria are also set out.

Target Audience:

This paper will be of particular interest to generators connecting or applying for


connection to the transmission or distribution system and interested parties.

Related Documents:

Outlined below is a list of additional or further reading which may be of use or of interest
or may provide background.
 Treatment of Small, Renewable and Low Carbon Generators outside the Group
Processing Approach

 Group Processing Approach papers

 CER 08/260 - CER Direction on Criteria for Gate 3 Renewable Generator Offers
and Related Matters

 CER 05/049 - Direction to System Operators Group Processing Approach for


Renewable Generator Connection Applications - Connection and Pricing Rules

 CER 03/237 - Network Charges for Autoproducers and CHP Producers - A


Direction by the Commission for Energy Regulation

 CER 09/031 - Treatment of Conventional Generator Connection Applicants

For further information on this decision paper, please contact Paul Hogan
(phogan@cer.ie) at the Commission.

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CER/09/099 – Small, Renewable and Low Carbon Generators Decision 24 July 20009

Executive Summary
The Group Processing Approach (GPA) is the process by which renewable generators
receive offers for connection to either the transmission or distribution system1; the
current iteration is Gate 3. The Gate 3 selection criteria were the subject of a recent
decision2.
The advent of increased numbers of conventional generator applications, along with the
significant number of renewable applications, those in Gate 3 and those remaining in the
queue, has resulted in the Commission reviewing the process to select those
conventional generation which should be offered connection to the system. This
process is currently the subject of a separate consultation3.
In 2005, as part of the GPA process, the Commission issued a Direction4 to ESB
Networks (the “DSO”) and EirGrid (the “TSO”) (collectively the “System Operators”)
dealing with certain outstanding connection and pricing provisions to be included under
the GPA and set out a process for treating certain renewable generators outside the
GPA. A number of issues have been raised regarding this process: public interest is not
defined, the process is unwieldy and complex for small generators, particularly in light of
the ever increasing queue under the GPA.
On 27 March 2009 the Commission published a consultation paper dealing with how
certain renewable generators are to be processed outside the GPA. The consultation
paper discussed issues such as the definition of the term “public interest”, the classes of
renewable and low carbon technologies that would be considered to have public interest
benefits and the connection options and methods for connecting such generators to the
network.
Taking account of the comments received and weighing up the public interest benefits
that would be derived from connecting parties outside the GPA against the potential
disadvantage that would be caused to individual parties, the Commission has reached
the following decisions.
Public Interest
The Commission has decided that the public interest criteria can be summarised as:
Diversity of Fuel Mix
Predictability and power system support
Environmental benefits
Experimental/ Research
The Commission has decided that the existing arrangements relating to wind projects up
to 0.5MW will be retained.

1
Please refer to the Group Processing Approach papers
2
CER 08/260 - CER Direction on Criteria for Gate 3 Renewable Generator Offers and Related Matters
3
“Treatment of Conventional Generator Connection Applicants”
4
Group Processing Approach for Renewable Generator Connection Applications - Connection and Pricing
Rules (cer05/049)

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CER/09/099 – Small, Renewable and Low Carbon Generators Decision 24 July 20009

Classes of Technology
The Commission has decided the following list of technology or classes of technology
exhibit public interest benefits and are therefore preapproved for processing outside the
GPA:
Bioenergy
CHP
Autoproducers
Hydro
Ocean
Wave
Solar
Geothermal
Experimental/Emerging Technology5
Connection Options
Generators eligible to be processed outside the GPA will receive an offer for a shallow
connection to the network. However, the offer will only include non firm access to the
transmission system. The operational date related to deep reinforcement works will be
determined on subsequent iterations of the ITC programme at which point firm access
will be allocated to these projects.
The Commission has decided on an approach incorporating an increase in the threshold
level from 1 MW to 5 MW. At and below this level interaction studies will not be
performed. Projects that qualify for having public interest benefits but are above 5 MW
will be considered on a case by case basis where interaction studies exist. The
Commission will consider any hybrid solutions or technologies as yet unknown in
“Experimental/Emerging Technology” category and be treated under a case by case
basis.
For small conventional projects up to 5 MW interaction studies will be performed. If no
interactions are found to exist then they can proceed to be given a connection offer. If
interactions do exist then the conventional project will remain in the queue.
Interaction studies will be reviewed by the DSO as well as the network information it
publishes and processes and timelines generally will be reviewed by the DSO. In terms
of connection method a sequential approach will be adopted by the DSO. The DSO will
also consider if a group approach would be more useful should the situation arise where
two or more applications are approved for processing outside the GPA. This process will
be kept under review by the DSO and the Commission.
The following matrix summaries how connection for various types of generation:

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Experimental and emerging technology will be assessed on a case by case basis.

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Renewable - Wind Renewable – Non Wind* Conventional Projects


All processed through Processed through non GPA Process – must fulfil public Processed through non GPA Offers issued under the
GPA Process. interest criteria. Process proposed Direction on
Conventional
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Exception: new build Offer Issuance Criteria
wind projects with MEC
less than or equal to 0.5 =< 5 MW >5 MW =< 5 MW > 5MW
MW Connection offers Interaction studies are performed. Interaction studies are Exception: Conventional
made without performed autoproducers that are not
performing If no interactions then connect in first 500MW tranche.
interaction** studies If no interactions are found to These could be processed
If interactions exist then CER look exist then they can proceed to through the non GPA
at on a case-by-case basis be given a connection offer process

If interactions exist then look at If interactions exist then the Process allows for public
public interest benefits (e.g. conventional project will remain interest criteria (e.g.
Security of Supply) and the in the queue Security of Supply) to move
impacts of interaction on other up the queue projects such
applicant in the queue as clean coal and includes
high efficiency CHP.
If CER approves then connect and
if not approve then option to buy
out interaction or remain in the GPA
queue

* Non Wind Renewable project is defined here as a renewable project that has a fuel source other than wind power. It is intended to be a short hand term
to define those renewable projects other than wind renewable projects that are discussed in the document. Includes, biomass, hydro, high efficiency
CHP, Autoproducers (renewable including wind)

** Interactions - two applications are deemed to be interacting if progressing an application outside the GPA, results in an additional cost being incurred
by other applicants in the GPA queue. Interaction studies relate to the shallow connection.

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CER 09/114

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CER/09/099 – Small, Renewable and Low Carbon Generators - Decision 24 July 20009

Table of Contents
Executive Summary .............................................................................................. 3
1.0 Introduction ..................................................................................................... 7
1.1 The Commission for Energy Regulation ................................................................. 7
1.2 Purpose of this paper ............................................................................................. 7
1.3 Comments Received.............................................................................................. 7
1.4 Background Information ......................................................................................... 8
1.5 Structure of this paper ............................................................................................ 8
2.0 General Comments ..................................................................................... 9
2.1 Current Process ................................................................................................ 9
2.2 Criteria for Accessing Public Interest ................................................................. 9
2.3 Classes of Technology ...................................................................................... 9
2.4 Connection Options......................................................................................... 10
2.5 Commission Response and Summary Decisions ............................................ 12
3.0 Specific Comments ................................................................................... 15
3.1 Introduction ..................................................................................................... 15
3.2 Criteria for Accessing Public Interest ............................................................... 15
3.3 Classes of Technology .................................................................................... 18
3.4 Connection Options......................................................................................... 20
3.5 Commission Response to Comments ............................................................. 25
4.0 Summary Decisions and Next Steps ......................................................... 35
4.1 Summary Decisions ........................................................................................ 35
4.2 Next Steps ...................................................................................................... 37

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1.0 Introduction
1.1 The Commission for Energy Regulation
The Commission for Energy Regulation („the Commission‟) is the independent body
responsible for overseeing the regulation of Ireland's electricity and gas sectors. The
Commission was initially established and granted regulatory powers over the electricity
market under the Electricity Regulation Act, 1999. The enactment of the Gas (Interim)
(Regulation) Act, 2002 expanded the Commission‟s jurisdiction to include regulation of
the natural gas market, while the Energy (Miscellaneous Provisions) Act 2006 granted
the Commission additional powers in relation to gas and electricity safety. The Electricity
Regulation Amendment (SEM) Act 2007 outlined the Commission‟s functions in relation
to the Single Electricity Market (SEM) for the island of Ireland. This market is regulated
jointly by the Commission and the Northern Ireland Authority for Utility Regulation
(NIAUR). The Commission is working to ensure that consumers benefit from regulation
and the introduction of competition in the energy sector.

1.2 Purpose of this paper


The purpose of this paper is to outline and describe the Commission‟s decision with
regard to the treatment of certain renewable, low carbon and small conventional
generators outside the Group Processing Approach (GPA). The Commission has
carried out a full public consultation on this topic and has considered fully the comments
and submissions received. Issues raised throughout the consultation process will be
addressed in this paper, as well as outlining the final decision on this topic.

1.3 Comments Received


The Commission received 35 submissions to the consultation paper (CER/09/044). Two
parties requested that their submission would be kept confidential. Submissions were
received from the following organisations or individuals which are published on the
Commission‟s website, a summary of which is contained in this paper:

Airtricity IDA (Industrial Development Authority)


Alchemy investments IrBEA (Irish Bioenergy Association)
Aquamarine IWEA (Irish Wind Energy Association)
Casey John Clery (Slievereagh Power Ltd)
CHP Ireland Liffey Meats
Clearpower Micro Mega
Chris Mee Safety Engineering MRIA (Marine Renewable Industry Assoc)
Nick Rackard NOW Ireland
Eco Evolution Pelamis Wave Power
EirGrid RPG (on behalf of wind autoproducers)
Endesa RPS Group
ESB Saorgus
ESB Networks SEI (Sustainable Energy Ireland)
Fingleton White Shannon LNG
FMC Tech Sustainable Energy Association
Fred Olsen Renewables Tonn Energy
GT Energy

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1.4 Background Information


Outlined below is a list of additional or further reading which may be of use or of interest
or may provide background.
 CER/09/044 - Treatment of Small, Renewable and Low Carbon Generators
outside the Group Processing Approach

 Group Processing Approach papers

 CER 08/260 - CER Direction on Criteria for Gate 3 Renewable Generator Offers
and Related Matters

 CER 05/049 - Direction to System Operators Group Processing Approach for


Renewable Generator Connection Applications - Connection and Pricing Rules

 CER 03/237 - Network Charges for Autoproducers and CHP Producers - A


Direction by the Commission for Energy Regulation

 CER 09/031 - Treatment of Conventional Generator Connection Applicants

1.5 Structure of this paper


This paper is structured in the same format as the original document for convenience. In
this response document each section will detail the questions posed in the consultation
document, the responses received and the Commission‟s response to these issues.
Finally the Commission‟s decision is presented at the end of each section.
Sections 2.0 outlines the current arrangements;
Sections 3.0 discusses the proposed criteria for assessing public interest;
Sections 4.0 details the classes of renewable and low carbon generators to which the
public interest criteria will apply;
Sections 5.0 discusses the options for connecting a generator who has public interest
benefits and presents the final decided option;
Sections 6.0 details other issues to be considered including the increase of the 0.5MW
threshold, impacts on microgeneration and the treatment of small scale conventional
generators; and
Section 7.0 contains the summary decisions and the next steps.

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2.0 General Comments


2.1 Current Process
Overall respondents welcomed this consultation both for its timely nature and for its
general approach. Respondents feel that the issues identified capture those that are
generally facing generators and are appreciative that the Commission recognises the
benefits of processing certain small renewables outside the GPA. However, some
respondents point out that consideration should also be given to the impact that projects
processed outside the GPA would have on any project inside GPA. Respondents also
welcome the recognition that has been given to autoproducers from the benefits that
they bring.
One common theme that emerged was the requirement to have defined processes and
timelines for interaction and connection studies and for connection offer issue. Generally
there was a call for transparent, traceable and timely processes to be implemented.
Respondents felt that timelines need to be enforceable as at present they state that it
can take upwards of 6 months to 2 years for processing applications. Also there is a call
for the renewable industry not to be bureaucratic.

2.2 Criteria for Accessing Public Interest


Overall respondents felt that the proposed criteria are appropriate and consistent with
the Commission‟s duties. Respondents said that ocean energy should be part of the
public interest criteria and that the inclusion of bioenergy projects is also in the public
interest as, unlike wind, there is no need for bioenergy projects to be built in remote
locations. Some respondents also felt that socio-economic factors should be part of the
Commission‟s public interest criteria. Some respondents felt that wind should be part of
the public interest while others suggesting that the existing arrangements relating to
wind projects with an MEC less than 0.5 MW should be retained.

2.3 Classes of Technology


Overall there was general agreement that the technologies proposed meet the public
interest criteria. One respondent, while agreeing with the presented list, suggested that
small scale conventional should also be considered and that all technologies with an
MEC which is less than or equal to 1MW should meet the public interest criteria.
Suggestions were made regarding additional ways that public interest could be
considered. One respondent felt that no other technologies need to be added to the list.
Another suggested that a weighting of public interest categories could be implemented
for each technology type, e.g. weight carbon offsetting more than waste reduction for
each technology in a category. Yet another suggested that wind generation should be
co-located with water based power generation (e.g. hydro) and with biomass based
generation and that these technologies should be supported by the REFIT and PSO
mechanisms. Another respondent suggested that plant which has the capacity to
operate in the mid merit to peaker ranges should be prioritised and come under the
public interest criteria.

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2.4 Connection Options


In Section 5 of the original consultation document the Commission proposed four options
that could be used to connect generators outside the GPA. By way of a reminder a
summary of the four options is set out below:

Options as Proposed in Consultation:

Option 1
In this option a qualifying generator is allowed to connect outside the GPA process
regardless of the impact on other generators ahead of it in the GPA queue. Interactions
between the qualifying generator and any other applicant ahead of it in the GPA queue
are not investigated or considered.
Option 2
In this option, interaction studies would be performed for those qualifying generators. If
the result of the interaction study shows that the qualifying generator does not have an
interaction with any other applicant who is in the GPA queue ahead of it, then the
qualifying generator application would be processed. Should the result of the study show
an interaction, that is, the qualifying generator does have an interaction with another
applicant who is ahead in the GPA queue, the applicant would have the option of
effectively “buying out” that interaction.
Option 3
This option is a hybrid of Options 1 and 2 but using a threshold.
Generators with MEC less than or equal to 1 MW:
Generators with an MEC of less than or equal to 1 MW would be processed outside the
GPA; interactions between the applicant and any other applicant or in the queue are not
investigated or considered. The order in the GPA queue is determined on date order.
Generators with MEC greater than 1 MW:
Interaction studies would be performed for those generators with an MEC of greater than
1MW. If the result of the interaction study shows that the applicant does not have an
interaction with any other applicant who is in the GPA queue ahead of it, then the
applicant should be allowed to connect. Should the result of the study show an
interaction the applicant would have the option of effectively “buying out” that interaction.
Option 4:
This option is similar to option 3 above. Generators with an MEC less than or equal to 1
MW would be treated as per option 1 above. The difference with this proposal compared
with option 3 is that generators with an MEC greater than 1 MW would be treated on a
case by case basis when interactions occur.
If the result of the interaction study shows that the applicant wishing to be processed
outside of the GPA does not have an interaction, with any other applicant who is in the
GPA ahead of it, then the applicant would be allowed to connect. Should the result of the
study show an interaction, that is, the applicant does interaction with another applicant
who is ahead in the GPA queue, the Commission is proposing that this be dealt with on
a case by case basis.

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There was mixed support for Option 1 with those in favour arguing that it would avoid a
queue of non GPA applicants. Respondents who favour option 1 would favour either
options 3 or 4 as an alternative but with an increase in threshold to between 5MW and
10 MW. Respondents felt that the benefits of being processed outside the GPA should
not be negated by imposing financial penalties in the form of compensation payments to
interacting GPA generators (Options 2-4), which would act against the public interest
and that the entry of ocean and other sustainable technologies may be inhibited.
Those against option 1 argued that it would be unfair to generators within the gate
process and suggest that some case by case processing is required due to the impact
on the GPA queue and network development.
Generally there was no support for option 2. Respondents felt it was unnecessarily
complicated.
There was general support for option 3 but equal support for a combination of options 3
and 4. Respondents in favour of option 3 claimed it was a logical approach but that the
limit should be 5MW as this level is needed to achieve economies of scale. Those
against option 3, similarly to option 2, claimed it could discourage renewable generators
to connect and that the calculation of payments for interactions could be complex and
resource intensive.
There was general support among respondents for option 4, largely as an alternative to
option 1. Those against option 4 said it could introduce ambiguity and time delays. Most
respondents seemed to favour a combination of options 3 and 4 but with an increase in
the threshold above the proposed level of 1MW.
Treatment of Autoproducers
Various parties proposed alternative or hybrid options for the treatment of
autoproducers. One such proposal suggested that generators with an MEC less than or
equal to 1 MW interaction studies would not be performed (as option 1), for an MEC
greater than 1MW but less than or equal to 10 MW applications would be treated on a
case by case basis and where the MEC is greater than 10 MW interaction studies would
be performed with an option to buy out an interaction if one should exist (as option 2).
Threshold Level
There was a variety of answers to the question if the 1MW level is appropriate for
options 3 and 4. Most respondents felt that the threshold level should be increased
above the proposed level of 1MW. Suggested values were 5MW, 7MW and 10MW.
Deep Reinforcement Treatment
Respondents felt that the proposals on the treatment of deep reinforcements are fair and
reasonable. Respondents suggested that frequent reviews of the ITC model should be
performed and that more clarity should be given as to when the next iteration of the ITC
model will occur. One respondent suggested that non-form access should be given to
expedite connections.
Interaction Studies
Respondents stated that if interaction studies are to be performed then there should be a
clearly defined process and timelines by which they should be performed. Respondents
welcome any proposals that reduce times and administrative expense and feel that that
the process should be objective, transparent, and non discriminatory and not unduly
impact on generators in the GPA. One respondent proposes that instead of studies or
offers taking 90 days to process the end to end time should be in the order of 6 weeks.

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Small Conventionals
Generally respondents felt that the treatment appears fair and reasonable. One
respondent stated that these conventionals should not be base load. Another
respondent feels that conventional and renewable generation are not mutually exclusive
and should not be treated as such.

2.5 Commission Response and Summary Decisions

Public Interest
The Commission has decided the following in relation to Public Interest:
The Commission has decided that the public interest criteria are:
Diversity of Fuel Mix
Predictability and power system support
Environmental benefits
Experimental/ Research
Therefore for a generator to be considered to be processed outside the GPA it must
fulfil at least one of the above criteria.
The Commission has also decided the following:
The Commission does not have a remit for socio-economic factors and therefore
are not considered as part of the criteria for public interest.
Although wind does not form part of the public interest criteria the existing
arrangements relating to wind projects up to 0.5MW will be retained and will be
only for the establishment of small, one off wind developments that would not
otherwise be covered by the autoproducer category and will be limited to a
“green field” site, that is, one where either a connection agreement does not exist
or if one does where there is not already a pre-existing MEC.
The existing arrangements for micro generation will remain as is.
Network optimisation, extending the public interest to cover specific interest and
competition will not form part of the public interest criteria.

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Classes of Technology
The Commission has decided the following list of technology or classes of technology
exhibit public interest benefits and are therefore preapproved for processing outside the
GPA:
Bioenergy
CHP
Autoproducers
Hydro
Ocean
Wave
Solar
Geothermal
Experimental/Emerging Technology
For the avoidance of doubt the above classes of technologies are preapproved for
processing outside the GPA. This is, however, subject to the conditions of the
connection options as discussed below.

Connection Options
The Commission has decided the following in relation to how classes of technology that
exhibit public interest benefits are connected to the network.
Non wind renewable projects with an MEC less than or equal to 5 MW will be
processed without interaction studies. For the avoidance of doubt this excludes
small conventional projects up to 5 MW.
Wind projects with an MEC less than 0.5 MW, that is, as per the existing
arrangements (as defined in document CER05/049), will also be connected
without performing interaction studies.
Non wind renewable projects with an MEC above 5 MW will be processed with
interaction studies. If no interactions are found to exist then they can proceed to
be given a connection offer. If interactions do exist then the Commission will
consider these on a case-by-case basis. The Commission will consider if the
project has overwhelming public interest benefits and the degree of disadvantage
that connecting the project could cause to other applicants ahead of it in the
queue. If the Commission does not consider that the project‟s public benefit does
not out weight the adverse impact then the applicant will be given the option of
buying out the interaction caused in order to be able to connect. Should the
applicant consider that the cost of buying out the interaction is not economically
viable then the applicant has the option of remaining in the queue.
For small conventional projects up to 5 MW interaction studies will be performed.
If no interactions are found to exist then they can proceed to be given a
connection offer. If interactions do exist then the conventional project will remain
in the queue.

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Connection offers (i.e. shallow connections to the network) will be on a non firm
basis with respect to transmission capacity.
The Commission will consider any hybrid solutions or technologies as yet
unknown in “Experimental/Emerging Technology” category and be treated under
a case by case basis.
A sequential approach will be adopted and kept under review and a case by case
basis will be used to determine if a GPA approach could be used should two or
more applications be approved for processing outside the GPA
Interaction studies will be reviewed by the DSO as well as the network
information it publishes.
Processes and timelines generally will be reviewed by the DSO.

Review of Arrangements
The Commission will monitor the situation on an ongoing basis following the
implementation of these arrangements. Should the number of projects or the quantity of
MW being processed outside the GPA become unmanageable, or if constraint costs to
other generators become material or other distortions are caused the Commission
reserves the right to review these arrangements.

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3.0 Specific Comments


3.1 Introduction
In the original consultation document the Commission set out a series of questions to
elicit responses from respondents on the following topics:
Criteria for assessing public interest
Classes of Technology that fulfil the public interest criteria
Options by which these technologies could be connected outside the GPA.
Each of these areas will be dealt with in detail with the Commission‟s response to the
comments received and its final decision given in the following section.

3.2 Criteria for Accessing Public Interest

Definition of “final customer”


Mega raised the point that the definition of “final customer” should be modified to take
cognisance of future customers.

Legislative Background
Respondents state that the Commission‟s legislative background should include
Sections 9 (1)(d), 9(4)(f), 9(5)(b) & 9(5)(d) of Electricity Regulation Act, 1999.
The Irish Bioenergy Energy Association stated that the Commission did not reference
National and EU Energy Policy as part of the framework under which the Commission
operate. It goes on to say that as the Gate 3 criteria were heavily influenced by the
Government‟s 40% target and that by extension so should the non-GPA process.
Sustainable Energy Ireland stated that the consultation should explicitly mention
Directive 2003/54/EC.

Additional Criteria for Definition of Public Interest


The ESB stated that the public interest definition needs to recognise the electricity
system in conjunction with the market. It goes on to say that the definition should
contain Security of Supply requirements, protection of the environment and promotion of
renewable and sustainable energy.

Socio-Economic Considerations
Some respondents felt that the Commission‟s responsibilities and legislative duties
should also include socio-economic considerations and that these should be reflected in
the public interest criteria. The Commission‟s duties should therefore be extended to
include employment, training, competitiveness and economic development. By doing so
it is felt that the Commission should create an environment where industry can deliver on
government targets and suggest that this could be done through a PSO type
mechanism.

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Wind as a Public Interest Criterion


M.F. Casey & Associates stated that it should be possible to prioritise one wind farm
over another in terms of receiving a connection offer and it does not accept that this
would be an administrative burden.
The Wind Autoproduction Industry proposed that the existing facility for wind be retained,
that is, projects that have an MEC that is less than 0.5 MW be processed outside the
GPA. The Wind autoproduction Industry proposes that this level be increased to 1MW
but limited to single turbines so as to prevent existing projects from increasing their
project size by 1 MW at a time.

Offshore Wind
Airtricity raised the query as to whether large scale offshore wind will be dealt with as
part of parallel process outside of Gate 3. It would also like to see a separate
consultation options for large scale off shore wind as it feels that it is appropriate to treat
off shore wind outside the Gate 3 process. Airtricity also believes that offshore wind
needs to be considered a class of generator within a larger technology category as it has
different operating environments and can provide higher load factors and larger
capacities due to the ability to build larger scales offshore.

Micro Generation
Mega also queries why rural communities are prevented from producing and selling
electricity while power lines traverse farmers' lands to bring power to cities. It goes on to
state that the repression of the micro generation and small scale renewable sector will
lead to blockages of major infrastructural projects and eventual supply failures. It
believes that this is a matter of public interest.

Network Development/Optimisation
M.F. Casey stated that the Commission should broaden its view of what constitutes a
public benefit to include the many benefits that can be identified specific to a
development and not limit the definition to the benefits a particular technology can
provide.
Liffey Meats Ltd, while suggesting that the criteria are appropriate goes on to suggest
that promotion of efficient and cost effective development of the network should be an
additional criterion.
John Clery of Slievereagh Power Ltd suggests that an extension of a wind farm project
should be given priority in certain situations where the infrastructure to add additional
capacity is already in place. It also would seem sensible to have the infrastructure that is
already installed fully utilised, rather than having underutilised connection assets,
particularly in light of potential future difficulties and objections of landowners. Similarly
Alchemy investments suggested that the Commission should also consider site location
citing that biomass projects can be located close to population centres.
The Wind Autoproduction Industry suggested that a facility should be available to
demand customers that wish to develop generation projects where the grid connection
infrastructure already exists as the demand customer has already paid for the
connection/capacity.

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Hybrid Technologies
Saorgus suggests that wind energy projects that are integrated with other “public
interest” generation or energy storage technologies should be eligible for non-GPA
processing or wind energy projects that significantly improve the capacity factor or
dispatchability of the wind project be eligible for non-GPA processing.
Mega suggests that hybrid solutions give stability and security of supply to the network
but that the 2MW level for reserves as suggested in the consultation document should
be much lower at between 500kW to 50kW.
Eco Evolution suggest that the renewable electricity generation sector should be
segmented into type of technology employed, or combination of technologies in the case
of a hybrid system with different technologies having different external costs.
ArCogen suggest that using hybrids at distribution level offers local load control with the
Wind Autoproduction Industry stating that the provision of primary and secondary
operating reserves should include firming of wind with battery but that for plants that are
greater than 5MW these should be dealt with as part of the conventionals process.

Security of Supply
Mega suggest that there should be open access to published information allowing full
transparency and traceability. It goes on to say that the GPA presents a narrow and
archaic methodology to secure Security of Supply and questions if the Commission is ill
informed and what is the backup plan should these measures not be adequate.

Diversity of Fuel Mix


RPG Group suggest that the Commission should consider origin or primary fuel when
assessing public interest criteria, i.e. to prevent importation of wood pellets when they
could be sourced in Ireland thereby negating any carbon reduction.

Competition
RPS Group suggests that the Commission should use competition as a criterion where
necessary. On the contrary ESB suggest that a competition criterion may not be
appropriate.
Mega argues that all renewables cannot be bunched together and it forecasts that in the
future different renewable technologies or innovations will be categorised, rated and
prioritised into clusters with different utility values and demand.

Predictability and System Support


IDA Ireland would agree in principle with the proposed treatment of any renewable
technology that can provide primary or secondary operating reserves. However, it
suggests that there would be merit in the Commission examining the possibility of
applying this provision to high efficiency/low carbon technologies, such as CHP.
Endesa claims that the consultation paper seems to limit security of supply benefits to
the diversification of the fuel mix and believes that the ability to provide ancillary services
and the contribution toward generation adequacy should also be taken into account.

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3.3 Classes of Technology

CHP/Biomass
One respondent, whose comments were requested to be treated as confidential,
suggested that biomass CHP should be used where possible as opposed to natural gas
CHP.
The Wind Autoproduction Industry, agreeing with the Commission‟s proposals, but
arguing that natural gas fired CHP is not low carbon but rather is a full CO 2 emitter and
has limited operational benefits due to limitations by heat load requirements and is
therefore neither renewable nor sustainable. With respect to security of supply gas fired
CHP has no benefit as it uses imported gas and has no additional benefit above
conventional portfolio.
Fingleton-White argues however that natural gas fired CHP does meet the public interest
criteria.
Chris Mee Safety Engineering argues that on site wind production is better than green
house gas emitting CHP as even though high efficiency CHP may reduce CO2 by 37% a
1MW on site wind turbine will generate 400kW at 0.4 utilisation factor.

Autoproduction
Mega welcomes the inclusion of the autoproduction category in conjunction with the use
of renewables but expresses concern that the autoproduction definition is being
extended to allow transfer of electricity from one site to another.
The Wind Autoproduction Industry argue that during low demand e.g.
nights/weekends/shutdowns then an export capacity is required to allow the projects to
spill excess electricity to the grid and get paid for it as to get finance banks will require a
MEC equal to the full amount of generation available.

Hydro
Mega agrees with the position as set out by the Commission with respect to hydro but
stresses the need for positive discrimination for hydro projects as opposed to
conventional generation and other renewables.

Geothermal
One respondent GT Energy, commenting on geothermal argued that as an industry it
has larger growth potential.

Ocean
Some respondents (e.g. Aquamarine Power, IDA, and SEI) welcome the fact that the
Commission recognise ocean energy as experimental and agrees that ocean energy
should be part of public interest and environmental/emerging technology category.

Wave
Pelamis feel that the consultation and attached consultant‟s report does not reflect the
scale of opportunity of wave/tidal to achieve public benefit.

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Solar
Mega believes that solar is an established technology and that therefore, it is likely that
solar power would be pursued in areas with on site demand and would not require the
capability to export on to the grid. However for completeness the technology would be
meet the public interest criteria from a diversity of fuel mix and environmental
perspective as looking at solar on MWh and distance travelled its benefits might be more
than is currently estimated.

Experimental/Emerging Technology
Pelamis argue that wave energy has a huge potential to meet significant percentages of
electricity demand in Ireland. In its opinion the consultation document and appended
consultant‟s report did not reflect the scale of opportunity represented by the marine
industry to achieve public benefit. It believes that wave technology is compatible with
intermittent renewable generation and could be used to balance system even at high
penetration of renewables.
Mega believes that island-type local community electricity systems, with strong black
start and export capability, will form the early movement towards the micro grid/smart
grid vision and believes that the Commission needs to be proactive on this subject and
believes that such micro grids might involve elements of all of the generating types listed
in the consultation document.

Hybrid/Co-location
The Wind Autoproduction Industry suggested that other technologies or combinations of
technologies should be considered as having public interest, e.g. wind in conjunction
with storage.
ArCogen stated that the current system does not recognise the potential for hybrid
solutions. ArCogen goes on to say that technologies that can store wind energy should
be processed outside the gate which would add to the security and consistency of
supply, e.g. pumped hydro, compressed air and fuel cells.
Mega suggest that wind and water power could be co-located with biomass and/or CHP
which it sees would contribute to future on call system reserves.

Categorisation
The Marine Renewable Industry Association (MRIA) while welcoming the public interest
criteria suggests that a weighting of technology would be more appropriate to define the
public interest for different categories of technology e.g. ocean energy could „score‟
ahead of natural gas fired CHP in terms of carbon offsetting, i.e. CHP versus ocean
technology.
SEI state that apart from the case of biogas plant, which may be assigned priority on the
grounds of avoiding emission of an extremely strong greenhouse gas, there is no
compelling case for introducing such categorisation in the connection process. It argues
that plant should be categorised within the connection process according to their size
and likely impact upon the distribution and transmission networks and feels that the
category list should be indicative rather than absolute. Also it argues that pre
determination of technologies that are qualified for streamlined access to the network is
likely to result in conflicts with other measures on renewable electricity and in particular
the Renewable Electricity Feed-in Tariff (REFIT). The introduction of sub-categories of
renewable generators that might be prioritised above others, has the potential to distort

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the market, may be discriminatory and may lead to outcomes contrary to energy policy
objectives.
Mega states that REFIT tariffs must be developed appropriately under special orders or
amendments to the Public Services Obligations (PSO) legislation to support the
deployment of such technologies on time for the consumer

Microgeneration
Mega suggest that there needs to be a streamlined system for microgeneration and
medium scale generation up to 0.5MW, with established timetables for assessment and
offer for connections with timescales of approximately 3-4 months. It also argues that the
provision whereby interaction studies on projects with an MEC up to 50 kW would not be
performed, as proposed in the original consultation, should be extended to micro
generation. It felt that previous comments on micro generation have been ignored and
not discussed in this consultation.

3.4 Connection Options


In Section 5 of the original consultation document the Commission proposed four options
that could be used to connect generators outside the GPA (please refer to Section 2.4
for a summary table). In the exercise of its functions the Commission is required to not
discriminate unfairly between holders of licences, authorisations or between applicants
for authorisations or licences. The Commission also has a duty to act in a manner that it
considers protects the interests of final customers of electricity. The objective of the
Commission is to balance the public interest with the interest of individual connection
applicants.
The Commission believes that there is a public interest in connecting certain renewable
and low carbon generators outside the GPA. However, there is potential for adverse
impacts on generators that would be processed within the GPA in terms of increased
connection costs and timelines. It is impossible to calculate the level or likelihood of this
impact as it will vary from connection to connection. The options are designed to take
into account the public interest benefits, limit the adverse impacts to other connection
applicants, be practical to implement and be administratively light for the connecting
party and System Operators.
There was mixed support for option 1 as proposed by the Commission. Those in favour
for Option 1 argued that it would avoid a queue of non GPA applicants. MRIA argue that
the cost of interactions would have a negative impact on marine renewable generators
both financially and through increased project risk.
Respondents who favour option 1 would favour either options 3 or 4 as an alternative but
with an increase in threshold to between 5MW and 10 MW. The reasons cited are cost
reduction for emerging projects, that paying the cost of interactions in advance (option 2)
as bonds or a cash payment would be particularly difficult for emerging renewable
technologies, the benefits of being processed outside the GPA should not be negated by
imposing financial penalties in the form of compensation payments to interacting GPA
generators (options 2-4), which would act against the public interest and that the entry of
ocean and other sustainable technologies may be inhibited.
Those against option 1 argued that it would be unfair to generators within the gate
process and suggest that some case by case processing is required due to the impact
on the Gate queue and network development.

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Clearpower‟s preferred option is option 1 which would require no interaction studies but
in the event that they are required it feels that the main priority should be that interaction
studies are carried out efficiently and timely so as the likely effects on a project can be
measured
Generally there was no support for option 2. Respondents felt it was unnecessarily
complicated as generators under 1MW would have relatively low levels of interaction,
connection costs may increase, the option is too stringent and there is concern about
how buying out an option would operate in practice. IrBEA suggest that the post-Gate 3
list of generator applications could be described as being mainly speculative and that it
is probably reasonable to assume that the vast majority of these in the queue do not
have planning permission. Due to the size of the current queue some of the applications
may have to wait until Gate 5 or 6. This may result in some applications not receiving a
connection offer for 6-10 years. It feels that this seems completely unreasonable to link a
non-GPA application to a GPA application that is unlikely to have planning permission
and may not have a connection offer for a very long period of time. Therefore the buyout
option could increase connection costs which could result in projects not being
developed. The IrBEA suggest that there should be simple and standard connection
process for biomass projects that have an output less than 100kW.
There was general support for option 3 but equal support for a combination of options 3
and 4.
Respondents in favour of option 3 claimed it was a logical approach but that the limit
should be 5MW as needed for economies of scale. Fingleton-White however believes
that increasing the existing limit of 500kW to 1MW and allowing for generators over 1MW
to buy out any interaction is logical. The IWEA favours option 3 in the vast majority of
cases.
Airtricity believes that for relatively early stage technologies such as wave, tidal and solar
requiring projects to „buy out‟ interactions may pose hurdles to them getting connected to
the network. It feels that more mature technologies such as biomass may more easily
accommodate such a requirement in their financing arrangements.
Those against option 3, similarly to option 2, claimed it could discourage renewable
generators to connect and that the calculation of payment could be complex and
resource intensive. Aquamarine Power believes that the threshold of 1MW offered in
options 3 and 4 provides insufficient support to secure the commercialisation of ocean
energy in Ireland and considers that the non-GPA qualification should be increased to
10MW. It believes that a 10MW threshold would also be consistent with the requirements
to be party to the Trading and Settlement Code whereby generators below this level of
MEC are not required to be part of the Single Electricity Market.
There was general support among respondents for option 4 largely as an alternative to
option 1. Generally there was also a call for the Commission to increase the proposed
threshold from 1MW to between 5 MW and 10 MW. However Fingleton-White claimed
that option 4 would leave the handling of generators over 1MW in the dark as to how
these cases would be handled on a case by case basis and that a definite procedure
would be more desirable. IBEC made a similar request for a defined procedure for this
option. SEI said that option 4 does not meet its objectives unless the criteria are clearly
defined. DSO proposes that the level should not increase beyond the 1MW set out in the
consultation paper.
Those against option 4 said it could introduce ambiguity and time delays (e.g. IWEA).
Most respondents seemed to favour a combination of Options 3 and 4. ESB, for
example, states that either Option 3 or Option 4 provides the DSO with the flexibility to

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take account of overriding public interest benefits. Mega favours Option 3 but believes
there is not much difference between either Option 3 or 4 and it should be an "and/or"
situation. Clearpower feel that if Option 3 or 4 are implemented that the cut-off point
should be increased from 1 MW to 5MW. The reason for this is that the majority of
Biomass CHP projects will be in excess of 1 MW output. Therefore, with a 1 MW cut-off
point Option 3 would effectively revert to Option 2 for the majority of these projects with
the resulting negative impacts as previously discussed.
Airtricity said that for early stage technologies such as wave, tidal and solar power the
threshold should be increased such that the MEC is less than or equal to 10MW.
Regarding the question of which option best balances the public interest with the interest
of individual connecting parties those respondents that answered the question were
divided between a combination of Options 3 or 4 and Option 1.
Nick Rackard (agent for Energiprojekt), Aquamarine Power and the IrBEA thought
Option 1 best balances the public interest with the interest of individual connecting
parties. Alchemy Investments, while believing Option 1 to best balance the interests also
thought that Option 3 is a viable alternative, but with the MEC increased from 1 MW to 5
MW.
The Wind Autoproducers Industry, SEI and ArCogen believe that either Options 3 or 4
balance the respective interests. They also believe that if Option 4 is implemented it
must be clearly defined. ArCogen go on to say that it is difficult to achieve this balance
as it believes that not all GPA generators are of equal value.

Treatment of Autoproducers
Airtricity, IBEC, IWEA, the Wind Autoproducers Industry and Fingleton-White proposed
alternative or hybrid options in response to Question 3 as posed by the Commission.
Airtricity proposes a hybrid of Options 3 and 4 such that for an MEC that is less than or
equal to 1 MW interaction studies would not be performed (as Option 1), for an MEC
greater than 1MW but less than or equal to 10 MW applications would be treated on a
case by case basis and where the MEC is greater than 10 MW interaction studies would
be performed with an option to buy out an interaction if one should exist (as Option 2).
IBEC/Fingleton White proposes that if at a site the MEC is less than the MIC + 1MW
then the application should be connected outside GPA without interaction studies being
performed. If the MEC is greater than the MIC + 1MW then interaction studies are
performed and if interactions are found to exist then the interaction can be bought out.
Fingleton-White also suggest that for CHP that is also an autoproducer such that the
MEC is less than the MIC + 500kW then the application should be treated the same as a
low carbon generator that is less than 500kW as it has little or no affect on the network.
This would be equivalent to the existing arrangement for projects that are less than
500kW as detailed in the CER Document CER05/049.
IWEA suggest that for autoproducer applicants a three threshold approach should be
implemented where up to a level of MEC of 2MW interaction studies are not performed.
Between 2MW and 5 MW interaction studies would be performed as per the DSO
proposal. Above 5 MW applications are treated on a case by case basis.
A similar proposal was forwarded by the Wind Autoproducer Industry. It also suggested
that for non auto production applicants where the MEC is less than 1MW then interaction
studies would not be performed (as Option 1), for an MEC greater than 1MW but less
than or equal to 5 MW interaction studies would be performed with an option to buy out
an interaction if one should exist (as Option 2). Where the MEC is greater than 5MW

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applications would be treated on a case by case basis. It also suggests that a facility
should be available to demand customers that wish to develop generation projects
where the grid connection infrastructure already exists, i.e. the demand customer has
already paid for the connection/capacity.
Liffey Meats suggest that auto production should be considered as a separate category
and propose that auto producer export threshold be determined on a case by case basis
and be based on the technology and site demand e.g. it could be 150% of annual
demand to cater for expansion).
The Wind Autoproducer Industry states that there needs to be an upper limit on auto-
producer project size allowed to apply for export capacity outside the GPA and, similarly
to the IWEA, suggest that this should be limited to the MEC equal to twice the MIC, as
referenced in CER Document (CER03/238). Finally, the IWEA queries if REFIT will cover
price taker exposure to negative prices.

Threshold Level:
EirGrid suggested that applicants with an MEC greater than 10MW should be treated
outside GPA under a different process although did not suggest such a process.
There was a variety of answers to the question as to whether or not the 1MW level is
appropriate for Options 3 and 4. SEI feels that the proposed level of 1MW is an
appropriate level as it lines up with the licence by order provisions of the Commission.
However SEI suggests that the level should be reviewed periodically. IWEA and FMC
Tech feel that an increase of the level to 2MW for MEC is appropriate.
Aquamarine suggest increasing the threshold from 1MW to 10 MW as it believes that in
the ocean energy industry as a whole, arrays of up to 10MW in size are typically
classified as non-commercial demonstration projects, therefore still requiring financial
support. Alternatively a generator can be given autonomy during crucial trial periods to
mitigate the risk of curtailment adversely impacting demonstration results.
MRIA suggest that a level of between 7MW and 10MW is an economically viable level
for installations. Nick Rackard suggests that the threshold be increased from 1MW to
5MW as the bigger the project the more economically viable the project becomes. In the
anaerobic digester market he believes that 5MW is more financial viable and would help
stimulate this market. Tonn Energy also suggests that the threshold be increased to 5
MW.
RPS suggests that a review of the threshold be carried out in the context of the
development of certain technologies in the Irish market and considering the various
support mechanism available to technologies. RPS also suggests that those projects
already approved to be processed outside the GPA could be analysed retrospectively to
see if they interacted with applicants ahead of them in the GPA. This analysis could be
one way of determining the threshold level.

Deep Reinforcement Treatment:


With respect to the question posed on the treatment of deep reinforcements generally
respondents felt that the proposal is fair and reasonable.
ArCogen stated that load studies could be less conservative thereby freeing valuable
resources. Aquamarine Power suggested that frequent reviews of ITC model should be
performed to determine the remaining capacity with a full report published. The Wind
Autoproduction Industry query whether connection offers for projects greater than 5MW
will issue only after each iteration of the ITC Programme or will it just effect the firm

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connection date. The IWEA suggested that more clarity is needed as to when the next
run of the ITC model will happen, the frequency of iterations and will it impact the
connection offer or just firm dates.
Similarly SEI requested that clear timelines are needed for operational date outside GPA
and the likely impact on processing of applications for connections should be detailed.
The IrBEA stated that generators with an MEC of less than 5MW should continue not to
have deep transmission or deep reinforcement dates applied to their projects and SEI
stated that non firm offers should be introduced for autogenerators irrespective of
capacity. SEI suggests that non-firm access should be given to expedite connections.

Interactions Studies:
Respondents stated that if interaction studies are to be performed then there should be a
clearly defined process and timelines by which they should be performed. The Wind
Autoproducer Industry suggest that where a cost of interaction has to be paid for by a
qualifying project this should be paid for at the time of it occurring rather than in advance
of the other applicant receiving a connection offer. This could be paid in a staged
manner in parallel with the stage payments made by the affected applicant during their
connection process or at the time of connection as is proposed under the DSO‟s position
in rebates for shared infrastructure under the GPA. It feels that there is no need for a
bond as the option is always there for the DSO to remove the MEC in the event that the
interaction cost is not paid.
Liffey Meats suggest that interaction studies should not be considered for auto
producers. Nick Rackard, as well as most respondents, welcomes any proposals that
reduce times and administrative expense; creating employment is in the public interest. It
is felt that the process should be objective, transparent, and non discriminatory and not
unduly impact on generators in the GPA. Mega proposes that instead of studies or offers
taking 90 days to process the end to end time should be in the order of 6 weeks.
The Wind autoproducers industry suggested that there should be a defined minimum
timescale for the DSO to carry out each section of the interaction study. The IrBEA
suggested that it would be beneficial to the industry to have greater volumes of
published data on the distribution system. As an initial step the IrBEA propose that
information on the existing and planned 38 kV networks is published in a similar
document as EirGrid‟s Forecast Statement. In the medium term the IrBEA would hope
that information on the three-phase MV network would also be published.

Small Conventionals:
Generally respondents who answer the Commission‟s question on the treatment of small
conventional projects felt that the treatment appears fair and reasonable but asked the
more clarity be given as to their treatment and that a limit on aggregation should be put
in place to limit multiple 4.99 MW applications.
The IWEA suggest that the arrangements are acceptable but once it is not base load
and can accommodate greater amount of renewables on the system.
ArCogen state that conventional and renewable generation are not mutually exclusive
and cannot be treated as such.

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3.5 Commission Response to Comments

3.5.1 Criteria for Accessing Public Interest

Definition of “final customer”


Mega raised the query that the definition of “final customer” should be modified to take
cognisance of future customers. Under the Electricity Regulation Act, 1999, a final
customer is defined as “a person being supplied with electricity at a single premises for
consumption on those premises”. Therefore it is not necessary to change the definition
to incorporate the concept of “future final customer” as suggested.

Legislative Background
A respondent states that the Commission‟s legislative background should include
Sections 9(1)(d), 9(4)(f), 9(5)(b) & 9(5)(d) of Electricity Regulation Act, 1999 (“the Act”).
As per the consultation document (Section 3.1) the Commission‟s legislative background
includes Sections 9(4)(f), 9(5)(b) and 9(5)(d) of the Act.
Section 9 (1)(d) of the Act states that the Commission will monitor “the terms, conditions
and tariffs for connecting new producers of electricity to guarantee that these are
objective, transparent and non-discriminatory taking full account of the costs and
benefits of the various renewable energy sources technologies, distributed generation
and combined heat and power”. Though not explicitly highlighted in this consultation, the
Commission is nonetheless bound by this provision in the Act.

Additional Criteria for Definition of Public Interest


The Commission believes that the issues raised with respect to the definition of public
interest are fulfilled in its original considerations. Security of Supply requirements,
protection of the environment and promotion of renewable and sustainable energy are
key drivers of the public interest criteria and form part of the Commission‟s duties.

Socio-economic considerations
As set out in the original consultation document in Section 3.1 the Commission stated
that socio-economic responsibilities are not covered by the relevant legislation and
therefore cannot be used by the Commission in formulating its decisions as it does not
form part of its legislative duties. The Commission does though indirectly contribute to
the economic benefits of the island through the implementation and oversight of the
Single Electricity Market (SEM) and through its connection policy whereby the
connection of generation is facilitated. In this regard the policy decisions presented here
contribute to the economic benefits by allowing a larger number of small scale
generators to connect.

Wind as a Public Interest Criterion


Notwithstanding that it may or may not be possible to administratively prioritise one wind
farm over another the thrust of the original consultation document was that the benefits
of renewable generation are those that over and above the known benefits of wind
generation. The Commission is satisfied that this approach is still valid and appropriate.

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However, based on the comment received with respect to the retention of the provision
0.5 MW limit for wind projects to be processed outside the GPA the Commission has
decided to maintain the current arrangements without a change in upper limit. However,
the issue of interaction studies will be dealt with in Section 5.

Offshore Wind
With regard to the treatment of offshore wind being dealt with as part of parallel process
outside of Gate 3 or to be considered a class of generator within a larger technology
category the Commission does not consider this to be appropriate, for the reasons
detailed above with respect to wind generally. The Commission does not see offshore
wind being distinct from onshore wind and would not favour such a dichotomy being
formed. For example, in its consideration of the Gate 3 criteria the Commission did not
give preferential treatment to onshore versus offshore wind generation. Therefore
consistent with this argument, and with the arguments presented above, the Commission
is not changing its position with respect to offshore wind.

Micro Generation
The arrangements for micro generation were not being reviewed as part of this
consultation process and consequently will remain as is. The arrangements for micro
generation are consistent with European standard EN50438 and that these
arrangements have been the subject of consultation in the past7.

Network Development/Optimisation
The Commission in its consideration of the Gate 3 criteria dismissed the proposal of
network optimisation as a criterion. Therefore to remain consistent with the principles of
Gate 3 the Commission is not proposing to process applications on the basis of network
optimisation or location basis.
However the arrangements for processing wind applications up to 0.5MW outside the
GPA, as discussed above, would not apply to extensions to already connected wind
farms. The purpose behind this provision is for the establishment of small, one off wind
developments that would not otherwise be covered by the autoproducer category.
Therefore the provision would be limited to a “green field” site, that is, one where either a
connection agreement does not exist or if one does where there is not already a pre-
existing MEC. This provision is intended to prevent a loop-hole being created whereby a
connection for 0.5MW can be sought and a modification applied for later to oversize the
connection.

Security of Supply
It was not intended to set out the Commission‟s policy relating to Security of Supply in
the consultation document on processing applicants outside the GPA. The purpose here
with respect to Security of Supply was merely to complement the existing security
arrangements. These arrangements are set out in the Commission‟s “Security of
Supply of Electricity Report” where the Commission‟s monitoring activities are described,
presents the conclusions drawn from that monitoring and the measures being taken, or

7
The definition of micro-generation is in accordance with European standards, as set out by the
European Committee for Electrotechnical Standardisation (CENELEC) and is contained in the
Commission‟s decision paper CER/07/208.

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planned to be taken, to protect Ireland‟s security of supply of electricity. The report


examines the key areas of fuel, networks, generation and demand.
To this end the Commission is confident of the quality of the information it receives from
the System Operators and of its strategy in this area.

Diversity of Fuel Mix


The Commission accepts that the local availability of more than one fuel source for the
generation of electricity creates diversity. However, if these fuels are sourced locally this
would reduce dependence on imported sources, and hence reduce potential supply
restrictions and price shocks. Locally produced fuels may not necessarily be the most
economic source as foreign sources fuels could be more competitive, as externalities
such as cost of carbon could be priced into their cost. This should include carbon
offsetting, where the carbon used to transport the fuel is offset by a reduction in the net
amount of carbon used in the growth and production of the fuels.

Competition
The Commission, in line with its view in the original consultation, believes that it is
inappropriate to use competition as a criterion for selecting projects outside the GPA in
this instance. Diversity of fuel mix and the associated contribution to Security of Supply
are the primary drivers for the connection of non wind renewables outside the GPA. In
this regard competition is a second order consideration. As renewable generation
qualifies for relevant subsidies, e.g. REFIT and would receive the same price for their
energy in the market competition between renewable generators is a moot point.
Therefore the Commission holds its view that completion should not be used as a criteria
for processing applications outside the GPA.
Taking account of the views expressed by Mega the Commission accepts that the
potential exists for projects to be clustered together in a complementary manner. This
will be discussed in the next section in relation to hybrids.

Predictability and System Support


The Commission accepts and believes that the ability to provide secondary reserves and
ancillary services is a requirement under the public interest criteria. Consistent with the
Grid Code this requirement is on generators with an MEC greater than or equal to 2MW.

3.5.2 Classes of Technology


The Commission welcomes the fact that there was general agreement among
respondents and that the list of technologies proposed was felt to cover the public
interest criteria. The Commission notes that no particular additional technologies were
proposed but that the issues of hybrid technologies, categorisation and co-location of
technologies were raised.
The Commission does not accept that all technologies with an MEC which is less than or
equal to 1MW should meet the public interest criteria. Under the Grid Code generators
with an MEC of 2MW and above are required to offer ancillary services and system
support. The inclusion of wind generators would not be appropriate as wind generators
can only provide limited system support (in terms of reactive power) and would be
inherently intermittent.

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Regarding a weighting of technologies the Commission does not feel that this is
appropriate. The thrust of the original consultation document was that predictability is an
additional benefit that renewable technology may bring. The technologies mentioned all
have predictability, though to varying degrees, and therefore offer benefits above those
offered by wind. However, as well as predictability they offer other public interest benefits
as already discussed.
Also it is considered that non wind renewable and low carbon technologies are not
competing with each other for connection but rather with projects that are included in any
“post Gate 3” arrangements. Furthermore to weight one technology over another could
potential distort and create a “rush to connect” particular types of technology. Forces
such as costs and environmental aspects should ultimately dictate the types of
technologies that would be connected.
As a result the Commission is not introducing weighting of technologies and also does
not agree with the proposal of categorising technologies within the connection process
according to their size and likely impact upon the distribution and transmission networks
as this is related to the network optimisation proposal as already discussed.
However, the Commission accepts that the list of technologies is not absolute and as
such new, as yet unknown technologies can be catered for either under the
“Experimental/Emerging Technology” category or under the Commission‟s case by case
basis approach, to be discussed in the next section.
With respect to hybrid technologies the Commission would not consider these
technologies as a pre-approved class exhibiting public interest benefits initially but would
consider individual projects presented on a case by case basis, again, under the
“Experimental/Emerging Technology” category.
The Commission does not propose to change the provisions with respect to
autoproduction as set out in the original consultation document. An autoproducer, as
defined in the consultation document, is as a person who has entered into a connection
agreement with the DSO or TSO and generates and consumes electricity in a single
premises, or on whose behalf another person generates electricity in the single
premises, essentially for the first person‟s own consumption in that single premises. CER
document CER03/237 “Network Charges for Autoproducers and CHP Producers” sets
out this definition.
Therefore any generator, including wind, who can demonstrate that the project fulfils this
criteria will be deemed an autoproducer and consequently be eligible for processing
outside the GPA.
Regarding CHP and respondents saying that natural gas fired CHP is not low carbon or
renewable the Commission feels that there is role to be played on the part of gas fired
CHP. As per the original consultation document even where the fuel is natural gas high
efficiency CHP would be expected to deliver environmental benefits in terms of the
reduction of greenhouse gas emissions. Should CHP not be included it is likely then that
the alternative heat and electricity source would be from distinct sources (e.g. gas/oil
fired heating and electricity imported from the grid). This would obviously less efficient
than a CHP solution.
Also it is likely that the main heat customer of a CHP plant would also have a significant
electricity demand. CHP can also be considered a base load plant which can be
predictable and controllable. Therefore, in terms of the environmental and security of
supply benefits the Commission concludes that high efficiency CHP (even where the fuel
source is not renewable) would be in the public interest.

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3.5.3 Connection Options


In the original consultation document the Commission weighed up the interests that
accrue to all customers (i.e. security/diversity of supply and environmental benefits)
against the interests of individual connecting parties, (i.e. not to discriminate unfairly
between holders of licences). Also any scheme has to be practical to implement and not
pose an unreasonable burden on the connecting party or the System Operators to
effectively administer. Taking into account each of the options presented, this balance
would seem to swing from almost exclusively favouring applicants to be processed
outside the GPA, hence recognising public interest benefits at the expense of other
applicants (i.e. Option 1) towards performing interaction studies for all such applicants,
regardless of size (i.e. Option 2) thereby limiting the impact to individual applicants but
perhaps not giving due weight to the public interest. Options 3 and 4 propose a middle
ground between options 1 and 2. A threshold level of 1MW was proposed as part of the
combined Option 3 and 4. This attempts to allow smaller applicants, who will have a
smaller impact, to connect to the system in an easier and simpler process. Larger
connection applicants would be subject to interaction assessment. With Option 4 larger
connection applications that do have an interaction would be assessed by the
Commission on a case by case basis. This allows the Commission to make an
assessment of the individual impacts and public interest benefits arising. While this
would be less transparent and administratively more complex it would recognise the
complexities in determining the public interest and weighting this up against the potential
impacts.
This proposal was reflected in the responses to the consultation. There was no support
for Option 2, where interaction studies for all applicants, regardless of size, were
performed. There was mixed support for Option 1 where interaction studies were not
performed. A strong theme emerged from the responses favouring a threshold based
approach of a combination of Options 3 and 4. A similar theme of increasing the
threshold level from the proposal of 1MW was also clear.
Taking into accounts the views and concerns of respondents and being conscious of the
benefits of expediting the connection small, renewable and low carbon generation with
the potential disadvantage to other applicants in the GPA the Commission is proposing
to adopt a combination of Options 3 and 4 as proposed taking account of an increased
threshold level.
Following consultation and taking accounts of the arguments presented the Commission
is adopting the following rule set for how generators that demonstrate public interest
benefits are processed outside the GPA. These rules take account of the arguments
presented above in relation to the connection option to be adopted, the appropriateness
of the threshold level and arrangements with respect to autoproducers.
Non wind renewable projects with an MEC less than or equal to 5 MW will be processed
without interaction studies. For the avoidance of doubt this excludes small conventional
projects up to 5 MW.
Wind projects with an MEC less than 0.5 MW, that is, as per the existing arrangements
(as defined in document CER05/049), will also be connected without performing
interaction studies.
Non wind renewable projects with an MEC above 5 MW will be processed with
interaction studies. If no interactions are found to exist then they can proceed to be given
a connection offer. If interactions do exist then the Commission will look at on a case-by-
case basis. The Commission will consider if the project has overwhelming public interest
benefits and the degree of disadvantage that connecting the project could cause to other
applicants ahead of it in the queue. If the Commission considers that the project‟s public

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benefit out weights the adverse impact then the applicant will be given the option of
buying out the interaction in order to be able to connect. Should the applicant consider
that the cost of buying out the interaction is not economically viable then the applicant
has the option of remaining in the queue.
However this process will be monitored and reviewed should it cause distortions or
become unmanageable.
The Commission believes that this recognises the public interest benefit of projects up to
and including 5MW while at the same time allowing the opportunity for larger project,
which satisfy the public interest criteria, to be connected.
For small conventional projects up to 5 MW interaction studies will be performed. If no
interactions are found to exist then they can proceed to be given a connection offer. If
interactions do exist then the conventional project will remain in the queue.
The Commission, in conjunction with the DSO, will define a process with timelines to
implement these arrangements.

Treatment of Autoproducers
The proposals put forward regarding the treatment of autoproducers in itself has merits.
However, difficulties arise when taken in conjunction with a threshold level being
imposed for the treatment of interaction studies. Allowing an autoproducer with an MEC
in excess of the decided threshold level to be connected goes against the arguments of
balancing the public benefit against individual generator‟s interests. Therefore the
Commission is not proposing to implement any MEC or MIC formula in determining
whether interaction studies are performed. As presented in the original consultation
document the definition of autoproducer will remain as someone who generates and
consumes electricity in a single premises, or on whose behalf another person generates
electricity in the single premises, essentially for the first person‟s own consumption in
that single premises. The “rule of thumb” referred to in Commission document
CER03/238 will remain for guidance only.
However the provisions of the connection option with an increased threshold will take
account of the case of autoproducers without causing incremental disadvantage to other
generators.

Threshold Level
In the original consultation document the Commission proposed a threshold level of
1MW below which interaction studies would not be performed, with respect to the
appropriate option.
From the responses to the consultation no party disagreed with the fundamental idea
that a threshold level should exist. Most responds favoured a level above that proposed,
ranging from 2MW to 10 MW. Economically viable sizes are quoted as being between 5
and 10MW, depending on the technology type.
One respondent suggested retrospectively analysing projects already approved to be
processed outside the GPA to see if they interacted with applicants ahead of them in the
GPA as a way of determining the threshold level. The Commission feels that while this is
a good qualitative method in itself it does not give predictive value of what projects might
be presented for connection in the future. Notwithstanding this, projects that have been
processed outside the GPA under the existing arrangements have not interacted with
other projects within the GPA, with the exception of one.

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Taking account of the responses received and weighing up the public interest benefits
against the potential disadvantage caused to applicants that are in the GPA queue (but
not affecting applicants in Gate 3) the Commission has decided to increase the threshold
level to 5 MW. Therefore below this level interaction studies will not be performed.
The Commission considers that this level is appropriate as it takes account of the public
interest benefits offered by classes of generators. Raising the threshold, or indeed not
having any threshold, would ensure that generators that have public interest benefits
would be included. However, as discussed, this would have to be weighed against any
disadvantage caused to other generators. Various technologies have varying levels of
scale at which they become economically viable. The Commission considers based on
the comments received that this threshold is above the proposed 1 MW level but below
the maximum level of 10 MW as proposed by some respondents.
A threshold of 5 MW would capture projects that are at or above the financially viable
level. Based on the list of approved applicants as presented in the original consultation
document these projects8, with the exception of two, have been below 5 MW in size.
This would seem to suggest that generally renewable projects would be in this range.
In the renewables queue post those in Gate 3 there are, at time of writing, some 288
projects amounting to 8616 MW. This is broken down further as:

Wind Projects Non Wind Renewable Total Total no.


Projects (MW) of
Project
projects
size
No. of No. of No. of MW No. of
MW projects projects

>= 5 MW 8447 240 36 1 8483 241

< 5MW 125 39 8 8 133 47

< 1MW 2 6 2 5 4 11

<0.5 MW 1 4 2 5 3 9

Total 8572 279 44 9 8616 288

Source: EirGrid

From the table it is evident that the vast majority of projects in the queue post Gate 3 are
wind projects representing 99.5% of the total queue currently. Non wind renewable
projects make up 44MW of the queue, with 1 project being 36MW of this figure.
The DSO in its original submission proposed that the level should not increase beyond
the 1MW as set out in the consultation paper. However, the DSO, from a network
perspective is supportive of the Commission‟s proposal of increasing the threshold level.
The Commission recognises that the threshold increase should free up DSO and TSO
resources whereby interaction studies would not be required for any project below the
threshold. Therefore these resources could be redeployed to other elements of the
connection offer process. A lower threshold may not result in such gains.
The Commission expects that the majority of non-wind renewable projects to be under
5MW while the majority of wind projects will be significantly greater than 5MW, the

8
CER document CER/09/044 - Appendix B

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average from the above table indicate an average greater than 30MW. The Commission
believes that setting the threshold to 5MW is appropriate. The basis on the projects
process outside the GPA to date, the non-wind renewables current in the queue and the
expectations or plans of the renewable industry as contained in their responses to the
consultation.
The Commission recognises the any level of threshold is somewhat arbitrary. However
the Commission believes that a 5MW threshold does provide a balance. However, the
Commission is mindful that this is balance predicated on the belief that the number and
size of projects to be process outside the GPA will be similar to those seen in the
previous years. In particular the Commission believes that the processing of parties
outside the GPA should not impact materially on the processing of connection offers in
Gate 3. If this proves to be untrue then the Commission retains the right to review this
policy and take appropriate action as necessary. The Commission requests the SOs to
monitor this and report to the Commission where it feels that the processing of
connection offers outside the GPA impacts materially on the GPA process itself.
With respect to the sequential approach for connecting non GPA applicants the
Commission welcomes the approach of the DSO as it allows for the timely connection of
applicants outside the GPA while at the same time, if the situation arises, allowing for the
optimal connection to the network. This is based on the assumption that the numbers of
applicants and sizes of projects to be processed outside the GPA will be relatively small
compared to those within the GPA and therefore will be a manageable process. The
Commission does not intend this process becoming a “mini Gate” or a Gate in its own
right.

Deep Reinforcement Treatment


Respondents feel that the treatment of deep reinforcement with respect to project being
connected outside the GPA is generally reasonable but further clarity is required as to
further iterations of the ITC model.
The Commission is deciding, as per the proposals in the original consultation9 that
projects greater than 5MW or those less than 5MW but who elect to be controllable and
who are to be processed outside the queue the operational date related to deep
reinforcement works will be determined on subsequent iterations of the ITC programme.
EirGrid will engage with the Commission to determine the detail of how this process will
work.

Interaction Studies
The connection option that the Commission is adopting and the increase in the threshold
level will entail that interaction studies will be performed for some applications. The
Commission is adopting the approach as detailed by the DSO in the original consultation
document but is requesting the DSO to review its timescales taking account of
comments raised in this Decision document. The Commission is also asking the DSO to
review what network information it publishes.

Small Conventionals
The Commission has considered the responses received in relation to the treatment of
small conventional projects up to 5 MW and is deciding that the arrangement as

9
Section 5.2.2

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proposed should be retained. Therefore if there is an interaction with a generator in the


GPA who has applied for a connection earlier then the generator is processed after that
generator receives an offer. Deep connection dates, where relevant, will be determined
in line with subsequent iterations of the ITC programme as discussed above.

3.5.4 Review of Arrangements and Potential Effects

Review of Arrangements
The Commission will monitor the situation on an ongoing basis following the
implementation of these arrangements. Should the number of projects or the quantity of
MW being processed outside the GPA become unmanageable, or if constraint costs to
other generators become material or other distortions are caused the Commission
reserves the right to review these arrangements.

Effects on Other Generators/Constraint Payments


Generators less than or equal to 5MW that are connected to the system without
interaction studies are granted de facto firm access but is effectively meaningless both
from a physical perspective, in terms of their ability to receive a dispatch instruction, and,
depending on their treatment in the Trading & Settlement Code (currently required to be
Autonomous units) or outside of the Code. In such an event what would, in reality,
happen where a constraint was experienced is that alternative generators, which could
alleviate any constraint experienced, would be dispatched down. Depending upon
whether this alternative generator was either itself financially firm or non firm the
resultant cost would be borne either by the general customer or by the generator.

To the extent these issues arise in the context of Group Processing the implications can
be considered. However, when these generators are processed outside the GPA they
are not considered when network access rights are granted and/ or constraints studies
carried out as they are not known or included in the models at that time. The scale of the
effect is, of course, dependent upon both the number and geographic location of such
generators but will be more significant the greater the scale and the more remote they
are in terms of their electrical configuration on the network.

It is EirGrid‟s opinion that the scale cannot be readily quantified as it is dependent on a


number of unknowns including the running pattern of the generator in question, the
assumed running pattern of others, which generators are firm/ non firm etc. and the
impact will differ in each instance. It believes that there is some tolerance margin,
however, if the scale or number were to be significant or they were to be located at a
point in the network which was approaching, or had with other non firm units exceeded,
capacity then the effect would be material. However, at the moment the numbers and
size of generators means that this is not a significant issue. As part of the decision
paper we have requested the System Operators to keep this under review and report to
the Commission.

Autogeneration Affects on Throughput


It would be expected that the throughput of the transmission and distribution system
would be reduced. Given that a significant portion of the network revenue is collection
on a €/kWh basis in the short term the connection of autogeneration will reduce the
revenue collected and hence tend to increase the average unit price for all customers.
Obviously this will occur whether the autogenerator has the ability to export on to the

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system or not. In the longer term it would be expected that increases in autogeneration
would defer the need to build additional network capacity. Also autogeneration would
have the benefit of reducing loses on the system.

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4.0 Summary Decisions and Next Steps


4.1 Summary Decisions
The decisions reached in the previous sections can be summarised as follows:

Public Interest
The Commission has decided the following in relation to Public Interest:
The Commission has decided that the public interest criteria are:
Diversity of Fuel Mix
Predictability and power system support
Environmental benefits
Experimental/ Research
Therefore for a generator to be considered to be processed outside the GPA it must
fulfil at least one of the above criteria.
The Commission has also decided the following:
The Commission does not have a remit for socio-economic factors and therefore
are not considered as part of the criteria for public interest.
Although wind does not form part of the public interest criteria the existing
arrangements relating to wind projects up to 0.5MW will be retained and will be
only for the establishment of small, one off wind developments that would not
otherwise be covered by the autoproducer category and will be limited to a
“green field” site, that is, one where either a connection agreement does not exist
or if one does where there is not already a pre-existing MEC.
The existing arrangements for micro generation will remain as is.
Network optimisation, extending the public interest to cover specific interest and
competition will not form part of the public interest criteria.

Classes of Technology
The Commission has decided the following list of technology or classes of technology
exhibit public interest benefits and are therefore preapproved for processing outside the
GPA:
Bioenergy
CHP
Autoproducers
Hydro
Ocean
Wave
Solar

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Geothermal
Experimental/Emerging Technology
For the avoidance of doubt the above classes of technologies are preapproved for
processing outside the GPA. This is, however, subject to the conditions of the
connection options as discussed below.

Connection Options
The Commission has decided the following in relation to how classes of technology that
exhibit public interest benefits are connected to the network.
Non wind renewable projects with an MEC less than or equal to 5 MW will be
processed without interaction studies. For the avoidance of doubt this excludes
small conventional projects up to 5 MW.
Wind projects with an MEC less than 0.5 MW, that is, as per the existing
arrangements (as defined in document CER05/049), will also be connected
without performing interaction studies.
Non wind renewable projects with an MEC above 5 MW will be processed with
interaction studies. If no interactions are found to exist then they can proceed to
be given a connection offer. If interactions do exist then the Commission will
consider these on a case-by-case basis. The Commission will consider if the
project has overwhelming public interest benefits and the degree of disadvantage
that connecting the project could cause to other applicants ahead of it in the
queue. If the Commission does not consider that the project‟s public benefit does
not out weight the adverse impact then the applicant will be given the option of
buying out the interaction caused in order to be able to connect. Should the
applicant consider that the cost of buying out the interaction is not economically
viable then the applicant has the option of remaining in the queue.
For small conventional projects up to 5 MW interaction studies will be performed.
If no interactions are found to exist then they can proceed to be given a
connection offer. If interactions do exist then the conventional project will remain
in the queue.
Connection offers (i.e. shallow connections to the network) will be on a non firm
basis with respect to transmission capacity.
The Commission will consider any hybrid solutions or technologies as yet
unknown in “Experimental/Emerging Technology” category and be treated under
a case by case basis.
A sequential approach will be adopted and kept under review and a case by case
basis will be used to determine if a GPA approach could be used should two or
more applications be approved for processing outside the GPA
Interaction studies will be reviewed by the DSO as well as the network
information it publishes.
Processes and timelines generally will be reviewed by the DSO.

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Review of Arrangements
The Commission will monitor the situation on an ongoing basis following the
implementation of these arrangements. Should the number of projects or the quantity of
MW being processed outside the GPA become unmanageable, or if constraint costs to
other generators become material or other distortions are caused the Commission
reserves the right to review these arrangements.

4.2 Next Steps


The DSO, in consultation with the Commission, is to draft the necessary processes
along with appropriate timelines. The DSO will also revise its interaction study
procedure10 as presented in the original consultation document.
The Commission will determine a process and timelines for the case by case approach.
These processes and time lines will be published in the coming weeks.

10
Appendix D in original consultation document

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