Electricity Market Deregultion

meogi3 · 29-11-2011 12:48pm #1

Hi,

I have a question re:electricity market deregulation. Deregulation has occurred throughout Europe and the World to varying degrees, some countries restricted to just generation whilst others deregulate to introduce distribution centres and districts to improve efficiency. My question is this can you deregulate the transmission grid also?? I have looked this up online and have been unable to find a definitive answer

Many thanks in advance

As in can or could you hypothetically deregulate the Irish tansmission and distribution Electricity market to establish hypothetically 32 T & D centres or districts relating to each county:):):)??

Pete_Cavan · 29-11-2011 11:49pm

meogi3 wrote: »

Hi,

I have a question re:electricity market deregulation. Deregulation has occurred throughout Europe and the World to varying degrees, some countries restricted to just generation whilst others deregulate to introduce distribution centres and districts to improve efficiency. My question is this can you deregulate the transmission grid also?? I have looked this up online and have been unable to find a definitive answer

Many thanks in advance

As in can or could you hypothetically deregulate the Irish tansmission and distribution Electricity market to establish hypothetically 32 T & D centres or districts relating to each county:):):)??

By "deregulate the transmission grid" I presume you mean unbundling? I am not sure how much you know about this so apologies if I am telling you things you already know.

The unbundling of the transmission assets is required under Directive 2009/72/EC. Ireland currently does not comply with this. EirGrid is licensed by the CER to act as transmission system operator (TSO) and is responsible for the operation and development of the transmittion grid while ESB owns the assets is responsible for carrying out the maintenance and construction of the system. Bit of info on the options available here and in an Irish context here. The government commissioned Frontier Economics to do a report into the options for unbundling of transmission assets in the context of the EU third package. Pat Rabbitte seems to want to leave things the ways they are but I am not sure how that will work. In September he said;

Both EirGrid and ESB have vital roles to play in delivering our national electricity infrastructure. In July this year, the Government decided the ownership of the electricity transmission assets is to remain with the ESB while the operation and development of the transmission system will continue to be the responsibility of EirGrid.

Eddie Hobbs actually has quite a good piece on the whole issue, see here but I am worried by the fact that I find myself agreeing with him.

meogi3 · 30-11-2011 1:17pm

Pete,

Many thanks for the reply, those reports are very worthwhile cheers. I think further unbundling to foster competition in the electricity market is the way forward!!

My question in a sense was could you establish hypothetically 32 transmission & distribution system authorities/companies for each county/region in Ireland, as opposed to having just one for the entire country as is the case now in Eirgrid and ESB networks.

As in the case of the Canadian electricity System where numerous electricity generation, transmission and distribution Companies operate in different areas and regions throughout the country.

This approach to restructuring, unbundling and privatisation of the electricity sector has been adopted to varying degrees around the world.

Any thoughts???

dubhthach · 30-11-2011 1:48pm

meogi3 wrote: »

Pete,

Many thanks for the reply, those reports are very worthwhile cheers. I think further unbundling to foster competition in the electricity market is the way forward!!

My question in a sense was could you establish hypothetically 32 transmission & distribution system authorities/companies for each county/region in Ireland, as opposed to having just one for the entire country as is the case now in Eirgrid and ESB networks.

As in the case of the Canadian electricity System where numerous electricity generation, transmission and distribution Companies operate in different areas and regions throughout the country.

This approach to restructuring, unbundling and privatisation of the electricity sector has been adopted to varying degrees around the world.

Any thoughts???

Ireland is too small a country to have the grid spilt into 32 transmission/distrubition systems. It would be extremely wasteful as well as a duplication of services. To put size of Ireland in context of North America. We are bigger then West Virginia. With regards to both Canada and US you are talking about "transcontinental" nation states.

Pete_Cavan · 01-12-2011 12:04am

meogi3 wrote: »

Pete,

Many thanks for the reply, those reports are very worthwhile cheers. I think further unbundling to foster competition in the electricity market is the way forward!!

My question in a sense was could you establish hypothetically 32 transmission & distribution system authorities/companies for each county/region in Ireland, as opposed to having just one for the entire country as is the case now in Eirgrid and ESB networks.

As in the case of the Canadian electricity System where numerous electricity generation, transmission and distribution Companies operate in different areas and regions throughout the country.

This approach to restructuring, unbundling and privatisation of the electricity sector has been adopted to varying degrees around the world.

Any thoughts???

I agree with dubhthach, Ireland is too small to split the grid like that. I would imagine the Canadians use that system because it is such a vast country and the population is spread over a huge area, the distribution losses would be huge so they have a large number of small power stations. Ireland is very different, we are so small that we have a small number of small stations. Hypothetically, I think what you are asking is possible, but applying what works in Canada to here is not a good idea.

IMO what needs to happen here is to transfer the grid (both transmission & distribution) to Eirgrid and sell energy producing assets and allow private companies compete in the domestic energy market on a level playing field. ESB could retain a number of assets and compete in the market if they so wished (although I dont think a heavily unionised semi-state company would last long in a competitive market like this).

I see that a private company, Endesa Ireland Ltd. have awarded the contract for the construction of a new Combined Cycle Gas Turbine (CCGT) station at Great Island. ESB recently had a tender for upgrade works at the substation there and Endesa was expected to make a planning application for a pipeline to serve it last week. Apparently all EBS projects for next year are under review in an effort to reduce costs so I cant see them upgrading any stations any time soon. The best option would be to sell them before they become obsolete and allow others to upgrade them. Instead Rabbitte wants to sell a stake in ESB, the worst option available, because idiots come out with slogans about "selling the family silver".

dubhthach · 01-12-2011 9:32am

Tbh having one grid for entire Island (North/South) is optimal for the size of the island. ESB should have all transmissions assets transferred from it to Eirgrid. If the Unions don't like it that's their problem. I would think been in breach of EU rules (especially given we are taking their money) is more important then some Union Fatcats. At least then if ESB are privatised it's just a matter of privatising power stations as oppose to loosing the entire grid (like what happened with Eircom)

I still don't understand how in 2011 there is any justification for the state to own powerstations tbh

mlmcelligott · 02-12-2011 10:27am

Some food for thought - http://www.psiru.org/reports/2009-12-E-Indon.doc

No information on Ireland but many pros and cons regarding unbundling state owned vertical integrated companies (VICs) and examples of what has happened in other countries around the world.

The distribution and transmission network in Ireland is roughly serves a similar size population as greater Manchester. We also have 4 times the European average of network per capita due to our sparse population spread meaning we have a lot more network to maintain and upgrade over time that any other European country.

The model the government has developed with the arrangement between ESB Networks owning the transmission grid and Eirgrid operating it is legal and is the same model used by Scotland.

Just my 2 cents

Carawaystick · 02-12-2011 3:35pm

The ESB staff own a fraction of the grid, as they own a fraction of the ESB. If you were to transfer it to with rid, then the staff would have to get paid for their share. You couldn't value it way below its fair value, as that would be seen as a tax dodge by revenue

I suspect this is the real reason it hasn't been done....
Why the staff at a particular time were given a share in the company is another issue...

The single energy market reduced the cost to the energy suppliers, look at the growth in send profits and the average market prices before and after the sem

Splitting the grid makes no sense, there would need to be large and wasteful plants matching the energy transfer across different phases of different grids, there would be a loss of grid frequency stability, if certain grid sections had less thermal/ hydro generation;

The fact we are paying higher prices, given the increasing profits the companies are making is just another aspect of the poor regulation we have here, where increasing prices was seen as a way of reducing prices....

jack presley · 03-12-2011 8:19pm

A major reason why the transmission assets aren't being transferred to Eirgrid I think is that selling 30% of an ESB without the grid wouldn't get much money for the government. That's a bigger reason than dealing with the unions I think.

Carawaystick · 05-12-2011 2:15am

I wonder how much we got from the ESB staff for their share already...

sudzs · 10-12-2011 3:58am

Pete_Cavan wrote: »

I agree with dubhthach, Ireland is too small to split the grid like that. I would imagine the Canadians use that system because it is such a vast country and the population is spread over a huge area, the distribution losses would be huge so they have a large number of small power stations. Ireland is very different, we are so small that we have a small number of small stations. Hypothetically, I think what you are asking is possible, but applying what works in Canada to here is not a good idea.

IMO what needs to happen here is to transfer the grid (both transmission & distribution) to Eirgrid and sell energy producing assets and allow private companies compete in the domestic energy market on a level playing field. ESB could retain a number of assets and compete in the market if they so wished (although I dont think a heavily unionised semi-state company would last long in a competitive market like this).

I see that a private company, Endesa Ireland Ltd. have awarded the contract for the construction of a new Combined Cycle Gas Turbine (CCGT) station at Great Island. ESB recently had a tender for upgrade works at the substation there and Endesa was expected to make a planning application for a pipeline to serve it last week. Apparently all EBS projects for next year are under review in an effort to reduce costs so I cant see them upgrading any stations any time soon. The best option would be to sell them before they become obsolete and allow others to upgrade them. Instead Rabbitte wants to sell a stake in ESB, the worst option available, because idiots come out with slogans about "selling the family silver".

Sorry to but in and slightly off topic but do you happen to know if the Great Island project is going ahead at all??

Pete_Cavan · 10-12-2011 4:43pm

sudzs wrote: »

Sorry to but in and slightly off topic but do you happen to know if the Great Island project is going ahead at all??

Endesa is putting its Irish unit up for sale so I dont know what the plan is. As per the link in my earlier post, Endessa have appointed a contractor to design and build a CCGT power generating station in Great Island so it must be going ahead. Maybe they want to build the new station and sell it once its built. Energia have been winning a lot of public contracts for supply of electricity recently so private companies can compete with the likes of ESB and Bord Gais. ESB recently had tender process to appoint a contractor to carry out upgrade works at the substation at Great Island which is enabling works for the new CCGT Generating Station so that should be going ahead in the new year.

Electricity Market Deregultion

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