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Discover the structure, functions, and duties of the Commission for Energy Regulation presented by Padraig Fleming on July 22, 2004. Explore topics like licencing, network access, market dynamics, environment, and support mechanisms. Gain insights into electricity prices, renewable energy promotion, and efficient energy use.
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Commission For Energy Regulation Padraig Fleming Manager, Distribution & Retail 22nd July 2004
Structure of Presentation • Role of CER • Licencing • Network Access & Charges • Electricity & Gas Market • Environment • Support Mechanisms • Electricity Prices
CER’s Functions & Duties • Establish Trading Mechanism • Licencing • 3rd Party Access to Networks • Promote Competition • Promote Renewable/Alternative Energy • Encourage Efficient Use of Energy
Licencing • Authorise the construction of Generators • Licence Generators/Suppliers/Shippers & Network Operators • Seeking a deminimus level for Licence • Review Technical, Financial and Business Plan
Network Access • Connections from ESB Networks/Eirgird & Bord Gas • Connection Charges • Contestable Connection to Electricity Transmission system & Gas System
Network Charges • Review Revenue Requirements & Investment Plans • Charges Depend on Contracted Capacity & Usage • Review of Tariff Structures • Promote Efficient use of Energy
Markets • Electricity - Bilateral Contracts • Best New Entrant / Top-Up / Spill • VIPP Auctions • Gas – UK Market • Bilateral Contracts • Balancing Market – UK NBP • Annual Entry/Exit Charging at Present with Point to Point Capacity • Moving to Entry/Exit Capacity and Charging
Support Mechanism The Commission favours supports outside of the trading/market arrangements in order to: • allow true market signals to be seen; • minimise market distortion; • minimise system and market operation costs to the final customer; • afford greater transparency.
Types of Support • €17m - PSO Generators - AER 1 – 6 • €75m - PSO Generators – Peat Stations • €30m- Networks – Cluster Program • €60m - Consumers - Free Electricity Allowance
Environmental Issues • Energy Efficiency • Passive Approach - Cost Reflectivity • Active Approach – Winter Peak Demand Reduction Scheme & Winter Demand Reduction Incentive • Loss Reduction Incentives • Carbon Trading • 23% Not Allocated – Valued @ €10/Tonne • Recycling Scheme – Pass-through 100% CO2 • Impact on Overall Market
Tariff Approval Process • 5- Year Revenue Review • Incentive Regulation • Generation – Market Based Price • Supply – Profit Margin • Networks – Cash Flow • PSO – Set by Government
Cost Drivers • Generation • Fuel & Carbon Costs • Capital Investment • Operations Costs • Networks • Capex Program – Largest Non-Government Investment • Growth 5% over 10 Years • 90,000 New Connections • PSO • Increase in AER 6 and New Peat Plants • ESB Submission for 12.5% Price Increase
Future Trends • Fuel Prices? • Capital Investment in Generation • Operating Cost of Generation • Network Investment – Growth Levels • PSO – AER under Carbon Trading