New Connections: Ireland’s ECP 2.4 and What Comes Next
Grid connection capacity is a scarce resource and a vital ingredient in the development of any power generation project. Allocation of grid connections among projects in an efficient manner which promotes successful project delivery is essential if Ireland is to meet its 2030 and subsequent renewable energy targets. Against this background, the Commission for Regulation of Utilities (CRU) recently published its Decision Paper on the Enduring Connection Policy – 2.4 (ECP 2.4) (the Decision Paper) with the stated objective of addressing the volume of grid connection applications in a way that promotes an optimal use of the existing network considering the system needs, national policy, and the consumer interest.
Section 34 of the Electricity Regulation Act 1999 allows the CRU to give policy directions to EirGrid plc (Ireland’s transmission system operator (TSO)), and ESB Networks DAC (Ireland’s distribution system operator (DSO)), on the terms and conditions of access to the Irish transmission and distribution systems. This has led to a number of programmes pursuant to which grid connections have been allocated in batches pursuant to decisions made by the CRU.
After Gate 3 of the previous group processing approach closed in 2008, there was a long gap until the announcement in 2018 of the CRU’s decision on the first Enduring Connection Policy (ECP 1), which provided for a single batch of connection offers. This was followed by the ECP 2 decision in 2020 which provided for three further annual rounds of connection offers (ECP 2.1 to ECP 2.3) from 2020 to 2022. ECP 2.4 extends this by another year. The CRU states that this is to enable a transition while the new connection policy is being developed.
In the article we give an overview of ECP 2.4 and discuss steps towards what will follow.
What is ECP 2.4?
ECP 2.4 is a single batch application window by which applicants can seek grid connection offers.
When is ECP 2.4?
The ECP 2.4 batch window opens in October 2023 for two months. ESB and EirGrid (the SOs) will publish a clarification note to the ECP 2 Ruleset that transposes the ECP 2.4 decision before the batch application window opens.
What offers will be made?
ECP 2.4 targets 100 connection offers in total which is a reduction from the 115 offers made in the earlier ECP 2 rounds. These will consist of 70 offers for generation (not confined to renewables), storage and other system services each with a maximum export capacity (MEC) of greater than 500kW (Category A). Of the remaining connections, 15 will be for projects with a MEC between 11kW and 500kW such as autoproducers and DS3 system services trials (Category B) and 15 will be for community led projects (Category C).
The CRU states that it recognises the inherent difficulties encountered by the SOs when processing and issuing offers and understands that delays in processing previous ECP 2 batches have occurred and are continuing to occur. Therefore, it considers that the reduction in offers is appropriate given factors including:
- the outstanding and ongoing offer processing by the SOs from previous batches;
- the CRU’s intention to introduce a new policy following ECP 2.4 and the aspiration to reduce overlap of batch processing by the SOs; and
- the SOs’ other connection offer work such as existing offer modifications, demand connections, micro-generation, interconnection, regulatory directions (e.g., relating to the Capacity Market) and offshore.
How will Category A Connections be prioritised?
For Category A, the 25 largest renewable energy generation projects will be prioritised. After that, projects will be prioritised on the basis of the date of grant of their planning permissions with the earliest dated grant of permission receiving highest priority but provided that no more than 10 storage and other system services projects will be accepted.
In ECP 2.1 to 2.3, projects were classified as “primarily storage” if more than 50% of the MEC was to be allocated to a storage project. For ECP 2.4, projects will only be classified as storage if 100% of the MEC is to be allocated to storage.
How much does it cost to apply?
The application fee schedule from ECP 1 which provides for varying levels of application fee depending on the MEC sought continues to apply subject to annual indexation. However, the amount of the non-refundable deposit for projects in Categories A and B has been increased to EUR7,000 (from 2,000 in ECP 2). There is no change for community-led projects. In addition, applicants that have a valid unprocessed application remaining on file do not have to pay an additional application fee deposit if they re-apply for ECP-2.4.
What will follow ECP 2.4?
The CRU has stated that it will continue engaging with stakeholders on the next stages of connection policy and expects to go to consultation in Q2 2023. It states that the new policy will seek to deliver certainty for future project development. The second Renewables Directive1 provides for an expedited permit granting process (which includes grid connection) with a single point of contact for plants that produce power from renewable energy. The permit granting process shall not exceed two years for power plants generally but shall not exceed one year for:
- electrical capacities of less than 150kW; and
- for repowering, but in each case extendible by one year in exceptional circumstances. To comply with these requirements, a new process is needed which will likely allow for more frequent processing of applications.
What is the Renewables Hubs Pilot?
The ECP 2.4 decision states that CRU, ESB Networks and EirGrid are working on a pilot proposal for renewables hubs. These will be in areas where there is a pipeline of renewable projects either with planning permission or in the planning permission process. In these areas, the network will be upgraded to facilitate more renewables connecting including by upgrading and expanding existing stations and building new ones. The CRU and SOs are of the view that delivery of renewables hubs has the potential to:
- create anticipatory capacity to facilitate future connections;
- give developers certainty as to good locations for available capacity; and
- give renewables projects more certainty of grid connection charges prior to making a grid application or bidding into RESS auctions.
For more information about Ireland’s ECP 2.4 and what comes next, please do reach out to one of the authors or your usual DLA Piper contact.
1Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources