ESB offers 9c to micro-generators

quentingargan · 16-01-2009 11:32am #1

ESB Customer Services last December proposed an interim tariff for microgenerators up to 11kw of 9 cents per kw hr. The details can be viewed on the CER site and the Commissioner for Energy Regulation has invited submissions by the close of business today.

In Northern Ireland the feed-in tariff is 7.4p sterling per KwHr and that a further 4.5p is paid for Renewable Obligations Certificates (ROCs) whereby the carbon credited is purchased for all energy produced by the wind turbine (including electricity used by the customers themselves).

By comparison, 9 cents is a pretty derisory offer but it is possible that if enough applications are received, then the CER will increase this figure.

So go submit! There are other points of interest;

1) This is only slightly higher than the 7.5c rate paid to large wind farms
2) There is already a 12c feed-in tariff for offshore power. Micro generators should be regarded as an early-stage technology and supported in the same way
3) Unlike wind farms and other generation systems, micro-generators do not create a requirement to expand the grid because their electricity is produced and used locally.
4) Ireland could be a leading innovator in micro wind power, but there must be attractive feed-in tariffs to support this.
5) Other countries such as Spain and Germany pay as much as 45c to 50c per kw hr for electricity to support the development of solar photovoltaic or other industries.

I'm sure you'll have a few more ideas on this...

The announcement by ESB is a move in the right direction, but could be and should be improved on if small scale domestic and hydro power is to catch on in Ireland.

Cookie_Monster · 16-01-2009 12:25pm

But do you still have to pay the €25,000 connection fee to the ESB?

That means only 278k KwH to payback (excluding capital cost etc).

Kind of rules out small scale private conections to feed in surplus power generated for houses/farms etc...

quentingargan · 16-01-2009 12:44pm

What €25,000? This scheme is only for housholders who want to stick a wind turbine in their backyard or put a solar PV on their house.

As somone who has had a wind generator for 6 years powering our house and dumping the surplus, I welcome this as an improvement, but I'd like the payment for power sent back into the grid to be in line with N. Ireland.

Of course there are those who think that renewables shouldn't be subsidised at all because electricity costs were one of the reasons cited for multinationals pulling out. Somehow I think in Dell's case the €3 hourly wage was more of an issue than the 16c ESB costs...

derry · 16-01-2009 2:09pm

quentingargan wrote:

5) Other countries such as Spain and Germany pay as much as 45c to 50c per kw hr for electricity to support the development of solar photovoltaic or other industries.

Wonderful nearly totally useless news you bring us.

Real in your face how embedded the kick back regime is to ensuring "OIL RULES OK."

Even without a 25000 hook in charge its marginal to for micro generators.The oil companies are in fulll steam to keep oil prices low for the next ten years and when all alternitives are gone bust and dont exist then the hike the price and screw us all again.

And they look set to win yet again thanks to all the help from the cronies in ESB who follow the mantra from the kickback regime "OIL RULES OK."

Now just wait for the planning deptartment ban solar panels or wind mills to put the final nail in the cofffin of the oil independence movement

Derry

quentingargan · 16-01-2009 2:17pm

derry wrote: »

Now just wait for the planning deptartment ban solar panels or wind mills to put the final nail in the cofffin of the oil independence movement

Derry, I'm fully with you on wanting oil independence, but you have to give some credit where its due. Ireland has the most leniant rules for planning for domestic wind turbines and solar panels that I know of. There is an exemption from planning for any turbine up to 13m high (to blade tip) subject to reasonable conditions in a house and 20m high for a farm. I know of no other country that has that.

But we do need to see a higher feed in tariff to make microgeneration worthwhile, thats why I put up this post. If you want to see that changed, I suggest you go onto the CER website and demand it.

By the way, I still don't know where this EUR25,000 comes in. I don't know of any significant fee to connect up a micro-generator. There are ridiculous fees for connecting a wind farm, but thats a different matter from this ESB issue at the moment.

Quentin.

wazzoraybelle · 16-01-2009 2:45pm

Hi quentin, is the 9c based on net metering, i.e the excess power generated by the wind turbine or will the esb require the householder to sell all power generated at this rate and buy back at full rate?

Heroditas · 16-01-2009 3:02pm

derry wrote: »

Even without a 25000 hook in charge its marginal to for micro generators.The oil companies are in fulll steam to keep oil prices low for the next ten years and when all alternitives are gone bust and dont exist then the hike the price and screw us all again.

And they look set to win yet again thanks to all the help from the cronies in ESB who follow the mantra from the kickback regime "OIL RULES OK."

9% of our electricity in 2006 was generated using oil. I would hardly call that cronyism.

Anyway, it's a step in the right direction.
As was stated above, submissions are being accepted.

Cookie_Monster · 16-01-2009 5:44pm

Apologies but I was under the impression from reading on here previously that ESB charge the €25k to provide an input connection to their grid for all producers regardless of scale.

Can anybody clarify then?

Cookie_Monster · 16-01-2009 5:46pm

Heroditas wrote: »

9% of our electricity in 2006 was generated using oil.

That all?
Source?

And what the breakdown from the rest, I presume it you label all carbon based sources (oil, gas, coal, peat) it would be much much higher

Heroditas · 16-01-2009 8:25pm

Cookie_Monster wrote: »

That all?
Source?

And what the breakdown from the rest, I presume it you label all carbon based sources (oil, gas, coal, peat) it would be much much higher

CER's website - Annual Report 2007

Gas - 54%
Coal - 19%
Peat - 7%
Renewable - 11%
Oil - 9%

Bear in mind those figures are from 2006 and a lot more wind farms have come on stream since then.
The figures should be a bit better now.
Coal, oil and gas account for over 70% of installed capacity and over 80% of dispatchable capacity.

probe · 17-01-2009 11:16am

The German strategy has been the most successful in getting widely dispersed green microgeneration in place. Small scale projects received in excess of 50c per kWh initially, and it has been gradually scaled down as the market got traction and small producers achieved a return on their initial investment.

Throwing 50c + at micro-generators will not have a big cost for the state monopoly, and if necessary it can be recovered from consumers of dirty electricity in the form of a surcharge! It would give people an incentive to become partially/fully independent and renewable in terms of their electricity supply, and get a contribution from selling their surplus production back to the grid.

Most farms (especially those with cattle) are big greenhouse gas producers. Most of them have the potential to be generators of green electricity - from wind, animal waste, even solar or microhydro from a river running through the farm. Reduce waste runoff into rivers.

Microgenerators also don't require a massive increase in grid infrastructure. The existing grid connection to the average farm could carry all the electricity it could produce.

The ESB has to change its "mentality" from being a generator of dirty electricity to being (largely) a network and billing infrastructure.

Microgeneration encourages green thinking, and the cash from selling electricity into the grid can help encourage a consumer to be more self reliant in energy production terms. A diversified supply source of small producers using different technologies can also produce a more stable green energy supply – which is essential to successful development of the Energy 3.0 economy. Big job creator too!

probe · 17-01-2009 1:04pm

I came across this ESB document on microgeneration. It refers to Ireland as "RoI". (While they have heard of EN50438, they apparently have never come across ISO-3166! It reads as if it was written by someone living on a different planet.)

http://www.engineersireland.ie/conference07/Documents/Tony_Hearne-Connection_and_Operation_of%20Micro-generation_in_the%20Republic_of_Ireland.pdf

quentingargan · 17-01-2009 4:15pm

Cookie_Monster wrote: »

Apologies but I was under the impression from reading on here previously that ESB charge the €25k to provide an input connection to their grid for all producers regardless of scale.

Can anybody clarify then?

Hi Cookie Monster. I've been in Irish Wind Energy Assoc. for some years and never came across this figure. If you are setting up a large wind farm, you have to pay up to €30,000 to ask Eirgrid one simple question - "can I connect this wind farm to the grid please?".

They can say "thanks for the €30K, the answer is NO, Goodbye".

Or they can say "Sure you can, but you'll have to build a 25km power line to a substation, at your own expense, and you'll have to contract us to build it for you at whatever price we choose, and when you've done that, you give us ownership of that line".

I think that the situation is either changing, or has changed, in that you can now invite others to compete for the construction part (called "contestability").

But basically, if you want to build a wind farm you have to get planning permission, AND a grid connection AND a power purchase agreement. If you haven't thrown your hat at it by then and sold out to one of the big boys, its a miracle. That's why there are so few wind farms in private ownership.

Long answer to your question, sorry - its a rant, cause I get quite fed up with the difficulties of getting renewables in Ireland, but I think somewhere in there is where your €25K figure came in. Its a hunch.. Q

10-10-20 · 17-01-2009 11:43pm

Some of you may be interested in this article:

http://www.theinquirer.net/inquirer/review/736/1040736/inq-solar-panels-up-and-running
And the follow-up:
http://www.theinquirer.net/inquirer/news/757/1011757/inq-solar-panels-delivered-2007

Muggins · 20-01-2009 12:31am

I think that net metering will require one of the new Smart Meters to track the net amount (import versus export). I'm a firm believer in real time pricing as a means to help stabilize the grid (in tandem with Demand Response) but I feel that there should be a premium paid to incentivise micro-generators.

bamboozle · 29-01-2009 3:54pm

quentingargan wrote: »

Hi Cookie Monster. I've been in Irish Wind Energy Assoc. for some years and never came across this figure. If you are setting up a large wind farm, you have to pay up to €30,000 to ask Eirgrid one simple question - "can I connect this wind farm to the grid please?".

They can say "thanks for the €30K, the answer is NO, Goodbye".

Or they can say "Sure you can, but you'll have to build a 25km power line to a substation, at your own expense, and you'll have to contract us to build it for you at whatever price we choose, and when you've done that, you give us ownership of that line".

I think that the situation is either changing, or has changed, in that you can now invite others to compete for the construction part (called "contestability").

But basically, if you want to build a wind farm you have to get planning permission, AND a grid connection AND a power purchase agreement. If you haven't thrown your hat at it by then and sold out to one of the big boys, its a miracle. That's why there are so few wind farms in private ownership.

Long answer to your question, sorry - its a rant, cause I get quite fed up with the difficulties of getting renewables in Ireland, but I think somewhere in there is where your €25K figure came in. Its a hunch.. Q

why on earth are the government not encouraging all forms of renewables as both a green source of energy and as a source of employment, surely its a no brainer, can gormley not break up the grip ESB have on the market?

Heroditas · 29-01-2009 8:30pm

bamboozle wrote: »

why on earth are the government not encouraging all forms of renewables as both a green source of energy and as a source of employment, surely its a no brainer, can gormley not break up the grip ESB have on the market?

because it's not Gormley's job.
It's Eamonn Ryan's job. It'll happen eventually.
Denis Cagney from the CER gave a very good talk on the renewable debate at a conference in dundalk last week. Quite simply, the infrastructure is not there at the moment and will have to be improved over the next few years - hence the massive investment into the grid.

moose112 · 08-02-2009 10:43pm

Hi guys

Is it true that the ESB will not buy electricity produced domestically unless you have a smart meter fitted.
But the smart meters the ESB have decided to use are still being tested???

So as it stands the ESB will not buy your spare electricity off you.

quentingargan · 08-02-2009 10:50pm

Hi Moose, Nope - there might be some in the ESB who would consider this ingenious.

There are smart meters being tested, and priority in distributing these meters will be given to people who have micro generators.

Heroditas · 09-02-2009 2:45pm

quentingargan wrote: »

priority in distributing these meters will be given to people who have micro generators.

Are you sure about that? Micro generators has barely been discussed in relation to the smart meter trials.

quentingargan · 10-02-2009 1:03am

Heroditas wrote: »

Are you sure about that? Micro generators has barely been discussed in relation to the smart meter trials.

I'm pretty sure I read that on the ESB site, but I can't find it now. The smart meter trial was to be randomised, so they weren't inviting participants (as that wouldn't be very random). As far as I know the one exception was microgenerators. But at present there are only a handful of registered microgenerators..

Oldtree · 12-02-2009 8:18pm

Article in the farmers journal today page 6 says:

decision on a payment rate for electricity generated by domestic micro generators is expected next week

Heroditas · 13-02-2009 9:33pm

This will have a big bearing on micro generators' participation in the smart meter pilot.
However, it is expected that if a large number of micro generators look to take part in the pilot, they may be better served with interval meters

Oldtree · 14-02-2009 1:53pm

Sadly it would appear that things are on a go slow with the pilot smart meter scheme. See:

Irish Times Wednesday, February 11, 2009
'Frustration' over pilot energy project By MARIE O'HALLORAN

http://www.irishtimes.com/newspaper/ireland/2009/0211/1233867932022.html

towel401 · 17-02-2009 2:51am

9c is nothing. it costs nearly 20c a unit now and if you use an ordinary grid tie and consume more than you sell back you are in fact getting the 20c/kw.

even at 20c/kw, living at the top of a hill or a good windy place it still isn't worth installing a turbine in most cases. it will take at least 5 years to pay off. if you're unlucky it could take 10 and the ****ing thing could break before then. if the cost of electricity went up to 30c/kw it would probably be worth installing this stuff.

quentingargan · 17-02-2009 10:32am

Hey. If only it were true (and it isn't) a five year payback would be a total no-brainer. If the banks were offering 20% interest on deposits they would be mobbed!

There are suppliers giving lots of porkies in this area (as in everthing else alas), so you need to learn to evaluate your site and do the maths yourself before you buy, or get someone independent to do so.

Anyone who can demonstrate a 5 year payback is selling a Chinese turbine, and you're right - it won't last half that length of time.

The usual declaration of interest - I sell turbines, but not Chinese ones...

In the better sites I have looked at, a 12 year payback is more like it, assuming that half of the power generated is consumed and half sold on to the grid at 9c (see here for calculations on our submission to CER). That represents a return of 8.3% on your investment, though you need to take depreciation into account as well. But a fair percentage of the cost of the system are components with a very long life (tower, electronics etc.).

But if power prices rise during that time, then the payback time will come down. But I have seen systems installed on sites where the payback time is between 30 and 40 years, and often those systems require annual maintenace which will cost almost as much as the income from the electricity generated. Beware systems that need annual maintenance...

Oldtree · 17-02-2009 7:38pm

Would the 9c be deemed income and therefore subject to tax and prsi, unlike your esb bill which is paid for with money you have already paid tax and prsi on?

quentingargan · 18-02-2009 12:10am

Oldtree wrote: »

Would the 9c be deemed income and therefore subject to tax and prsi, unlike your esb bill which is paid for with money you have already paid tax and prsi on?

Thats what's great about discussion boards. In years of doing training, this is one question I've never heard asked. In the UK that doesn't seem to happen - I haven't heard of it. I would wonder though if you put in a large turbine, and were getting cheques from the ESB, would you get hammered?

So I've written to the Revenue Commissioners to ask them. Will come back when / if I get a reply.

Oldtree · 18-02-2009 7:26pm

I would expect that any costs involved with setup, purchase and running the turbine would be allowed to be offset against tax, much as any investment in any small business, and any income beyond that to be taxable at the appropiate rate for your income.

I think it would be preferrable to allow actual units produced to be offset against the units used, as this would benefit the producer more and I feel encourage small scale production, (in the right environmental setting of course).

What about our infastructure costs (investment and maintainance) I hear the ESB cry?!?!? Bo**ox to that I say, you have screwed the ordinary person for your costs for years with inflated prices, time for payback.

quentingargan · 18-02-2009 10:31pm

Hey folks, at long last the CER has announced its decision. And guess what? The tariff is 9c. They've accepted the ESB offer and feel that any change in this rate is outside their remit. Twice in the document, they say

The development of a long term investment policy and any premium is a matter for Government policy and is outside the Commission’s remit.

You can read their response here

In fairness they looked closesly at all the submissions, but none of the suggestions made in those submissions were considered as coming under their remit.

I reckon at this rate, a 2.5kw turbine costing €11,500 will have a payback time of 12 years if you have a mean wind speed of 7 m/sec, increasing to 16 years if you have a mean wind speed of 6 m/sec.

There is scope in the document for changes in the future...:rolleyes:

wazzoraybelle · 18-02-2009 11:44pm

A very disappointing decision, for a country that has the best wind resources in europe it is to our shame that we not only lag behind the rest of the union by more than a decade in some cases in terms of accepting microgeneration but are at the bottom of that pile making microgeneration efforts viable.
My own site has a wind speed of 8m/s and a 6kw turbine would supply 100% of our energy needs. At this arrangement the sums just don't work, break even would be 20+ years.

ESB offers 9c to micro-generators

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