In a few months, as a result of a new Single Electricity Market auction stipulations and it’s outcome, NI is set to close major electricity generators that have maintained security of supply for decades. Over the last three years Kilroot’s coal fired station has met around one-fifth of Northern Ireland’s electricity demand. But Kilroot Power Station’s 440MW and a further 125MW generator at Ballylumford have now been earmarked for closure. Carefully honed generating teams managing plant and securing our electricity supply are to be scattered.
Kilroot is a coal fired power station that was expected to close in 2021 as a result of increased carbon taxes and environment regulations. The SONI process has not included a mechanism for winding down older plants in an orderly manner, sweating the assets for the benefit of consumers. The one year auction system, T-1, resulted in significant maintenance costs, due this year, having to be built into Kilroot’s unsuccessful bid.
Recognising the dangers and the gap between the T-1 and the T-4 electricity auctions, the Commission for the Regulator Utilities in the Republic of Ireland has brought out a new document “Regulatory Approach to Maintaining Local Security of Supply in Electricity” on the 18th December 2017. No equivalent document appears to have been produced in NI leaving local generators and in turn consumers exposed.
In theory competition should be good for the consumer. However, it is surprising that the I-SEM auction does not seem to take into account the total cost of electricity generation, namely, the capacity auction and the likely bidding level at a particular point in time. There must be considerable doubt that newspaper headlines of electricity capacity cost savings will actually result in lower electricity costs to consumers.
We are advised in the Eirgrid/SONI’s capacity statement that there is a low probability of a significant unplanned generating outage from a major power station during peak winter demand. However, just two weeks ago, Coolkeeragh with its 369MW turbine was out of service for maintenance for the weekend. It is understood that it was some 18 hours late in coming back into service.
Would we have faced electricity blackouts if a similar event happened in the absence of three turbines now listed for closure at Kilroot and Ballylumford?
Similarly, I also understand that the Ballylumford C-Station will have maintenance scheduled outages during the 1st quarter 2019. In advance of the new interconnection, can the NI grid really survive with only Coolkeeragh and a single Ballylumford B station turbine? Have plant maintenance schedules been adequately catered for?
The new cross border electricity interconnector has just received planning permission and is to take some 3+ years to build. The Evermore Energy gas plant for Belfast is in the early phase of planning and would take years to build.
NI consumers will be increasingly reliant on, expensive peaking units, as of yet, unproven Demand Side Units (DSUs) and Aggregated Generating Units (diesel generators) amounting to 29% of future capacity. There are doubts over this being a prudent, reliable method of avoiding blackouts.
In the absence of Kilroot, the new interconnector or a new generator to bid how will there be the competition in future T-1 capacity auctions and competitive bidding during winter demand? Could consumers actually end up paying more for electricity?
Indeed, given the loss of the contracts for the two main Kilroot Generators there may well be uncertainty of the long term future of the 4 Open Cycle Gas Turbine (peaking units) which are integrated into the Kilroot power station and provide 130MW. Similarly the 10MW Battery storage facility may face an uncertain future. Any further loss of generating capacity would reduce competition even more and greatly heighten the likelihood of blackouts.
I have written to the Permanent Secretary of the Department of the Economy asking for an independent review of the proposed closures, before it is too late to turn back. He has asked to meet me later this week.
