Response 2010 Country report: Ireland -Dromacque, C., VaasaETT

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Country Reports Republic of Ireland By Christophe Dromacque, VaasaETT.

2010 VaasaETT and EEE ltd. 1


Respond 2010

Contents 1.

Key points................................................................................................................. 3

2.

Market structure........................................................................................................ 4 2.1. Organization....................................................................................................... 5 2.2. Peak Load........................................................................................................... 6 2.3. Generation Mix .................................................................................................. 7 2.4. Wind Power ....................................................................................................... 7 2.5. Deregulation and the Single Electricity Market................................................. 8 2.6. The Commission for Energy Regulation (CER)................................................ 9 2.7. Price and switching levels................................................................................ 10

3.

Climate Change Regulation.................................................................................... 11

4.

The Smart Metering Project Phase 1 ...................................................................... 13 4.1. Technology Trials ............................................................................................ 14 4.2. Electricity Customer Behavior Trials (CBT)................................................... 15 4.2.1.

The TOU tariffs ........................................................................................ 17

4.2.2.

Smart billing for residential customers..................................................... 18

4.2.3.

Smart Web for residential customers........................................................ 19

4.2.4.

In-House display....................................................................................... 20

4.2.5.

Overall Load Reduction (OLR) Incentive ................................................ 21

4.3. Timeline ........................................................................................................... 21

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Respond 2010

Republic of Ireland

1. Key points The population of the Republic of Ireland was estimated at 4.5 million people in 2009. There are about 2 million electricity customers and installed capacity was 7,843 MW. Growth in electricity demand has been among the highest in OECD countries, fuelled by a rapid increase in population and economic growth until the global economic crisis hit Ireland at the end of 2007. The Republic of Ireland has a parliamentary system of government. The Irish state consists of twenty-nine administrative counties and five cities which are administered separately from the remainder of their respective counties. The national electrical energy demand in 2008 amounted to 27 TWh of which 0.5 TWh had to be imported to meet domestic demand. The average domestic consumption is estimated at 4,500 kWh a year per household. Natural gas, which accounted for 54% of the generation mix in August 2009, is the most important fuel source for power generation. It is followed by coal which accounts for 17%, peat (10%) and other fossil fuels (5%). Wind power, which dominates the renewable mix, accounts for 10% of the total generation mix followed by Hydro (3%) and pumped Hydro (2%). Given the geography of Ireland, its electricity system is relatively isolated compared to systems in mainland Europe. The Republic of Ireland system is connected to Northern Ireland which in turn is connected to Scotland and a project to build an interconnector to Wales by 2012 is under way. A major development and important milestone for the deregulation of the electricity market in Ireland was the introduction of the Single Energy Market (SEM) on November 1st, 2007. The SEM is the Irish wholesale electricity pool market, into which all electricity generated on or imported into the island of Ireland (Republic of Ireland and Northern Ireland) must be sold, and from which all wholesale electricity must be purchased. The electricity market is fully open to competition since February 2005, however

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Respond 2010 the Irish generation and supply markets are still dominated by state-owned utility ESB. Its portfolio of plants accounted for 44% of the SEM’s total capacity in 2008. Furthermore, the Irish retail market is still very highly concentrated as measured by its HHI index1. The latest available market share data indicate that ESB provided 73% of residential customers and 44% of I&C customers in the SEM in 2008. Lowering ESB's market shares is of high priority to the Irish regulator. One of the most efficient tool used by the CER to lower ESB's dominance is to determine the price at which ESB can charge its domestic customers and not allow it to discount from this price. This system allows competitors to grow market share rapidly as they offer discounts of up to 14% on the regulated price. This proved very appealing when the economic crisis hit the country and customers tried to cut spending. Ireland has experienced an annualized customer switching rate of nearly 20% during the first half of 2009. This high figure can also be attributed in part to timely and aggressive marketing campaigns by ESB’s main competitors Airtricity and BordGais, but also to the incumbent’s willingness to lose customers in the hope that the regulator will soon allow it to fully compete on price. Residential electricity prices in Dublin are traditionally high compared to other European capital cities. In April 2010, inhabitants of Dublin paid on average c€ 18.21 per kWh which placed it the 6th most expensive city among the EU-15 capital cities. The three principal bodies responsible for the formulation and delivery of the government’s energy policy are the Department of Communications, Marine and Natural Resources (DCMNR) at central government level, the independent Commission for Energy Regulation (CER) and Sustainable Energy Ireland (SEI), which advises the government on a range of energy and sustainability issues and delivers a number of relevant R&D programmes. Smart Metering policies officially started in June 2007 when the Government stated in its Programme for Government 20072 that it will “ensure that the ESB installs a new smart electronic meter in every home in the country which will allow people to reduce their bills by cutting back on unnecessary use of electricity”; and “Facilitate the introduction of net metering to allow consumers to sell electricity back into the grid from any renewable power supplies they have.” The CER has established the 1st phase of a comprehensive Smart Metering project in late 2007. The results will inform an analysis of the feasibility of implementing smart meters throughout Ireland. The project includes electricity and gas customer behavior trials and technology trials. A cost benefit analysis will then be performed based on the results. The CER informs the public regularly of the status and results of the trials. The latest available results have been published in December 2009 and the next update should be made public in June 2010. Judging from the comprehensiveness of the Smart Metering project currently in progress, the introduction of Demand Side management schemes at an early stage and the different technologies being tested, the Republic of Ireland is well on track to a successful Smart roll-out and harvest the advantages such technology allows.

2. Market structure

1 2

Cap Gemini, various authors, (2009), European Energy Market Observatory 2009. Department of the Taoiseach, An Agreed Programme for Government - Pages 17 -18, June 2007.

4


Respond 2010

Republic of Ireland’s electricity market in brief (2008) Number of electricity customers

1.98 million

Installed Capacity (in MW)

7,843

Electricity demand (in TWh)

27

Electricity production (in TWh)

26.5

Average residential Consumption (in kWh)

4,500

2.1.

Organization

The "Go-Live" of the Single Electricity Market (SEM) on 1 November 2007 changed the way the Irish market is organized. The SEM consists of a gross pool market, into which all electricity generated or imported onto the island of Ireland must be sold, and from which all wholesale electricity for consumption or export from the island of Ireland must be purchased. The SEM was put in place by the two regulators Niaur in Northern Ireland and CER in the Republic working in cooperation with the two Governments and the electricity industry. The SEM allows for generators to sell their electricity into a "central pool" and for electricity suppliers to purchase their electricity out of this pool. The SEM is regulated by the SEM Committee which is a cross jurisdictional body made up of the two regulatory authorities and an independent member. The regulator's main goals when creating the SEM were to improve the security of supply, lay the foundations for increased competition in the electricity market, amplify the competitive pressure on the incumbent ESB, minimise transaction costs for participants and customers; and enable demand side management.

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Respond 2010

Source: CER

ESB Networks is responsible for the operation, maintenance and development of the electricity distribution network. It is also responsible for maintaining and developing the transmission network. ESB Networks operates independently from other areas of the ESB and is required to provide services on a nondiscriminatory manner to all customers regardless of their electricity supplier. ESB Networks is the point of contact when a customer wants a connection to the distribution network or if there is an emergency to report. They also have responsibility for all aspects of metering such as meter reading and replacement. EirGrid is responsible for operating and planning the development of the transmission system. While EirGrid determines any investment projects to be undertaken, ESB, as transmission asset owner, undertakes the work.

2.2.

Peak Load

Ireland’s generation-load balance seemed secured in 2008. The country’s theoretical margin (percentage difference between theoretical generation capacity and peak load) was over 30% and more significantly its real margin (percentage difference between its real generation capacity and the peak load) was at a comfortable 11%. However, when the economy was running at full speed, for instance in 2007, the real margin was lower at 5%. It might indicate that energy supply might be not secured when economic activity returns to more "normal" levels. The Irish system is a winter peaking system because of the greater need for heating and lighting requirements during winter months. The winter highest ever peak occurred on Thursday January 7th, 2010 at 17.45 and demand reached 4,950 MW. In summer, the reduced need for heating and lighting results in a lower demand for electricity. The minimum demand is

6


Respond 2010 known as the minimum summer night valley.

2.3.

Generation Mix

Natural gas accounted for 54% of the generation mix in August 2009 and is the most important fuel source for power generation. It is followed by coal which accounted for 17%, peat (10%) and other fossil fuels (5%). Wind power, which dominates the renewable mix, accounted for 10% of the total generation mix followed by Hydro (3%) and pumped Hydro (2%). As in many other EU countries, recent years have seen new capacity additions mainly in gas-fired facilities and wind power. Ireland’s limited indigenous energy resources shape government policy to exploit its existing peat and renewable energy resources, particularly wind, to as great an extent as possible. Recent dramatic increases in oil and gas prices which are the main drivers of energy prices, volatility in the geographical regions of supplier countries and Ireland’s relative geographical isolation from the rest of the European Union are seen as a threat to maintaining secure energy supplies at competitive prices and has led the government to support stronger UK-Ireland interconnections and stronger north-south interconnections within the island. The Electricity Regulation Act 1999 precludes nuclear generation in Ireland. This position was confirmed in the Energy Policy White Paper published in 2007. While acknowledging that the costs of nuclear fuel are relatively low and stable, the Government believes that the capital, operation and maintenance costs of nuclear power stations are considerably greater than those of fossil fuel plants and that these costs have increased with growing concerns about operational safety and security. In April 2008 the energy regulator proposed a national debate on the issue of nuclear power to address the country's pending energy crisis. It referred to the need to find an alternative to meet future energy needs since neither wind power nor any other renewable energy sources could satisfy demand. In any case, the interconnection with Wales might allow Ireland to purchase the benefits of nuclear power without incurring many of its costs.

2.4.

Wind Power

The government estimates that between 8,300 and 19,000 GWh could be generated from renewable sources by 2020. Although potential may exist in other renewable energy technologies, such as biomass and ocean power, wind power will likely dominate the renewable mix. Ireland’s target is to have 40% of electricity generation from renewable energy by 2020. Recent years have seen a marked increase in the level of wind power generation. As of January 2010, the Republic of Ireland had an installed wind power capacity of 1,260 MW, three times as much as in 2005. In 2008 alone, the rate of growth was as high as 55%, amongst the highest in the world as 440 MW were added3. On July 31st, 2009, the output from the country's turbines peaked at 999 megawatts. During certain times that day, up to 39 percent of Ireland’s demand for electricity was met from wind. On October 24th, 2009, the output exceeded 1,000 MW for the first time and peaked at 1064 MW. Wind power is thought to be the best options for Ireland to secure its energy supply while meeting CO2 emission targets. The government has therefore decided to strongly support wind power with a set of policies and its share in the energy mix is likely to keep 3

World Wind Energy Association, World Wind Energy Report 2008.

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Respond 2010 increasing. The main factor restricting wind capacity development in Ireland has been the constraint on the electricity grid in connecting significant amounts of non dispatchable generating capacity. The Irish electricity grid is still weak in the rural west and north of the country, where the most suitable wind-powered plant sites are located.

2.5.

Deregulation and the Single Electricity Market

Ireland’s electricity market reforms have been driven by the need to comply with the EU’s directives and the pursuit of its own national policy objectives. Key national legislation includes the Electricity Regulation Act, 1999, the European Communities (Internal Market in Electricity) Regulations 2000 and 2005. The liberalization process started in 2000 and gradual market opening during the transition period has resulted in full market opening in February 2005. The market in the period 1999 and 2007 when the SEM was implemented was called the transition market. It was designed to gradually move away from a vertically integrated monopoly to an increasingly competitive electricity market, and achieve full competition by November 2007. By 2008, 27% of the retail electricity market (by volume) in the residential segment and 57% in the industrial and commercial segments were served by suppliers other than the incumbent utility.

Design Characteristic

Transitional market

SEM

Market Model

Bilateral trading (generators trade directly with suppliers)

Gross mandatory pool (all electricity is sold and bought from a central pool)

Generator dispatch

Decentralized-zed dispatch (Generators determine their own running schedule)

Centralized dispatch (system operator dispatches the most efficient plant to meet demand)

Market prices

Regulated top-up and spill prices

Prices set by the market at the marginal cost of energy

Capacity Payments

Capacity component included in spill prices

Explicit capacity payments based on availability

Settlement time frame

Monthly settlement for energy

Weekly settlement of energy to facilitate a reduction in security cover provisions

8


Respond 2010 North-South transmission connection

2.6.

Treated as an interconnector

Deemed to be part of a single transmission system

The Commission for Energy Regulation (CER)

The regulator for the electricity and natural gas markets in Ireland is the Commission for Energy Regulation (CER). It was initially established in 1999 under the Electricity Regulation Act 1999. Initially the Commission was responsible for regulation and reform of the electricity market only, including the licensing of new entrant generators and suppliers. Its role has continued to evolve and several pieces of legislation transposing EU directives regarding electricity and gas markets have transferred additional functions to the CER. Legislation in 2004 and 2005 expanded the CER’s role in relation to the liberalization of energy markets, legal unbundling of Bord Gais, security of energy supply, and consumer protection. In late 2006, a further piece of legislation was enacted which added significant extra functions to the Commission’s mandate. The Energy Act 2006 outlines the functions of the CER regarding the all island energy market and regarding electrical safety, natural gas safety and the regulation of electrical contractors. Most recently the Electricity Regulation, Act 2008 was enacted to allow for the construction, by EirGrid, of the East West Interconnector between Ireland and Wales. The functions of the Commission can be summarized as follows: - Ensuring sufficient capacity in the electricity and gas systems to satisfy reasonable demands for supply of natural gas and electricity; - Protecting the interests of final customers including the disabled, the elderly and those residing in rural areas; - Promoting competition in supply of electricity and natural gas and electricity generation; - Ensuring no unfair discrimination between applicants for or holders of licenses, consents and authorizations or between them and State-owned operators; - Promoting the continuity, security and quality of supplies and encouraging safety and efficiency in undertakings and by end users; - Ensuring license and authorization holders are capable of financing their activities; - Setting standards, enforcing compliance, settling disputes, controlling and monitoring performance and reporting regularly on these activities; - Promoting research and the use of sustainable forms of energy that reduce or are free of greenhouse gas emissions as well as adopting measures to protect the natural environment in all the sectors’ activities; - Advising government on the development and regulation of the gas and electricity sectors;

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Respond 2010

- Regulating the activities of electrical contractors with respect to safety; - Regulating the activities of natural gas undertakings and natural gas installers with respect to safety; - Promoting the safety of natural gas customers and the public generally as respects the supply storage, transmission, distribution and use of natural gas; - Establishing and implementing a natural gas safety framework.

2.7.

Price and switching levels

The retail market was opened to competition in 2005 and the establishment of the Single Energy Market in 2007 removed direct price regulation from generation. Fixed price regulation was removed for large energy users in 2007. Several independent retailers now actively compete in the retail electricity market. The market share of ESB Customer Supply has fallen from 94% (Republic of Ireland) in 2000 to 41% (SEM) in August 2009. Prices at which ESB can charge its domestic customers is determined each year by the CER and ESB is not permitted to discount from this price. This system allows competitors to grow market share rapidly. In December 2009, the CER launched a consultation regarding the ending of the regulation of prices charged by ESB Customer Supply. The Commission will assess the level of competition in the various market segments before ending price regulation. It proposes ESB market shares of 40-50% in the SME sector and 55-60% in the household sector as possible thresholds for removal of regulation4. Judging from the level of market activity in 2009, the removal of regulation of prices might be getting close. During the first half of 2009, Ireland has experienced an annualized customer switching rate of over 20%5. Research indicates that between February 2009 and 2010, Bord Gáis Energy won nearly 21% of the occupied residential electricity market in the Republic of Ireland. The main reasons for this extraordinary level of customer switching have been price margins, the economic downturn in Ireland and outstanding marketing. Price margins were achieved through a combination of regulatory price controls placed on the incumbent, as well as clever energy purchasing strategies. Bord Gáis Energy are not the only energy company in Ireland that has won customers from the incumbent, Airtricity has also won significant numbers of residential customers, and new entrants into the market are now a possibility since the market has shifted from near inactivity just over a year ago, to being one of the most active electricity markets in the world. Residential electricity prices in Dublin are traditionally high compared to other European capital cities. In April 2010, inhabitants of Dublin paid on average c€ 18.21 per kWh which placed it the 6th most expensive city among the EU-15 capital cities. In March 2010, the energy component represented 62% of the total price, distribution 26% and the remaining 12% represented the VAT. Electricity prices have steadily increased since liberalization, this situation can partly be explained by the share of imported fossil fuel in the generation mix and the fact that their prices remain at a high level. 4

CER Press Release – 2nd December 2009 "Roadmap to Electricity Market Deregulation". Lewis, Philip E. (Forthcoming), World Energy Retail Market Rankings 5th Edition, Utility Customer Switching Research Project, Published by First Data & VaasaETT. 5

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Respond 2010

3. Climate Change Regulation The government seems firmly committed to exploit the potential of renewable energy resources on the island and has developed a policy framework to support this aim. Ireland’s most important renewable energy commitments and targets as well as its main policies are outlined in several documents including, the energy policy White Paper on Delivering a Sustainable Energy Future for Ireland (2007); the National Climate Change Strategy (2007); the Programme for Government (2007) and the Carbon Budget (2008). The Sustainable Energy Sub-Programme of the National Development Programme 2007-2013 will involve investment of ₏276 million in the sustainable energy sector and will encompass the following: - Renewable energy measures will focus on achieving government targets for renewable energy production and meeting policy goals. The primary focus will be on the large-scale deployment of wind, the emerging potential and deployment of biomass and biofuels, preparatory action on ocean energy and deployment of other technologies such as solar and geothermal technologies. Deployment will be delivered through a range of supports including taxation, direct grant aid and other funding or support mechanisms. - Energy efficiency measures aimed at establishing and maintaining an effective market structure, informing and empowering consumers to make strong energy efficiency choices. The overall objective of the proposed programme will be the achievement of an annual saving of at least 1% of energy use across the economy over the lifetime of the Plan. - Integration and innovation measures will focus on integrating sustainable energy practices and structures into public policies and the development of regional and national infrastructures. There will be two sets of activities: the integration of national sustainable energy policy measures at a regional and city level, and the smaller-scale piloting and evaluation of sustainable energy technology options, including those in the renewable energy, energy efficiency and urban transport areas. Building on the energy "Green Paper" and related consultations conducted during 2006, the Irish government released an energy "White Paper" in March 2007. This paper sets out a national energy policy framework for the years 2007 to 2020. The strategic goals of the paper relate to security of supply, sustainability of energy and competitiveness of energy supply. In relation to security of supply, the government's main policy is to enhance the diversity of fuels used for power generation and creating a stable, attractive environment for hydrocarbon exploration and production. Relevant actions in relation to these goals include: - encouraging biomass in power generation by supporting biomass technology transfer, investing in specific biomass research and development and tackling supply side issues;

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Respond 2010

- delivering on the targets contained in the Bioenergy Action Plan; - achieving 15% of electricity consumption from renewable sources by 2010 through existing and new projects under the REFIT Scheme; - achieving 40% of electricity consumption from renewable sources by 2020 through support for research, development, commercialization and technology transfer and planning for offshore wind, ocean technology and biomass. Regarding sustainability of energy supply and use, the goals include: - addressing climate change by reducing energy-related greenhouse gas emissions; - accelerating the growth of renewable energy sources; - promoting the sustainable use of energy in transport; - delivering an integrated approach to the sustainable development and use of bioenergy resources; - maximizing energy efficiency and energy savings across the economy; and - accelerating energy research development and innovation programmes in support of sustainable energy goals. Actions for meeting these goals include: - achieving at least 400 MW from combined heat and power by 2010; - setting an initial ambition of at least 500 MW of installed ocean energy capacity by 2020; - supporting further long-term developments of offshore wind projects; - optimizing deployment of solar energy in electricity and heating by 2020; - achieving a minimum target of 5% market penetration of renewables in the heat market by 2010 and a further target of 12% renewable heat market penetration by 2020; - working to develop an "all-island" approach to bioenergy during the period 2007 to 2010. The government intends to carry out interim reviews of the energy policy framework every two years, with a fundamental review to be carried out every five years. The Irish Renewable Energy feed-in tariff programme was introduced in September 2005 and later extended to cover ocean energy in 2008. The fixed price tariffs for proven technologies are indexed to the annual change in the

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Respond 2010 national consumer price index. The prices by category are currently set as follow: - Large wind energy (over 5 MW installed capacity); c€5.7 per kWh - Small wind energy (5 MW or less) c€5.9 per kWh; - Biomass (landfill gas) c€7 per kWh; - Hydro (less than 5 MW) and other biomass technologies c€7.2 per kWh. The fixed price for ocean energy (wave and tidal) is c€22 per kWh without indexation. The price will be available to projects operating at a full size offshore national test facility as part of the domestic R&D programme for ocean energy. In an attempt to boost its off shore wind electricity production, the price is fixed at c€14 per kWh.

4. The Smart Metering Project Phase 1 The CER has launched the "Smart Metering Project Phase 1" in late 2007. The objective is to set up and run Smart Metering Trials and assess their cost and benefits, which will inform an analysis of the feasibility of implementing smart meters across the country. A steering group and a working group were established by the Commission. Both groups are chaired by the Commission and consist of representatives from the Department of Communications, Energy and Natural Resources, Sustainable Energy Ireland, NIAUR and Irish Gas and Electricity Industry participants. The Steering Group gives strategic directions to the Working Group, reviews the Working group’s proposals and seeks approval from the CER. The Steering Group’s first meeting took place in December 2007. The latest update reports relates to progress of the project deliverables as of the end of November 2009. The project can be divided into four main deliverables preceded by a “procure and start-up” phase and will, once completed, allow for a comprehensive Cost Benefit analysis. This report focuses on the Technology and Electricity customer behavior trials.

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Respond 2010

Source: CER Information Paper 3: Smart Metering Project Phase 1 (CER/09/186)

In August 2008, ESB Network selected four providers of electricity smart metering infrastructure: • • • •

Elster and Energy ICT Trilliant and Iskrameko PRI and Aclara Sagem

The meters and the accompanying infrastructure will be used for the Technology as well as for the customer behavior trials.

4.1.

Technology Trials

The requirements for the meters include: • • • • • • • •

Interval and time of use (ToU) Register Data kW and kVAr – import and export Events/Tamper Alarms Firmware Upgrades Outage Recording on Meter Basic Power Quality Monitoring Load Limiting, Variable settings Remote operation of switch embedded in meter.

The Regulator sees the communication layers as the most challenging area, therefore assessing the suitability of various solutions will be the main focus of the trials. The solutions selected by ESB Networks needed to meet the specificity of the Irish electricity market such as the fact that half of the customers live in rural areas with low density of population. The technology trials are performed independently from the customer behavior trials. Customers who have their meters replaced for this trial will keep being billed normally. The meters being tested incorporate GPRS, PLC and Wireless communication technologies: •

14

Elster AS 230 with GPRS modules have been installed in Dublin South and Wicklow. The suitability of the unlicensed 868 MHz spectrum is being evaluated.


Respond 2010 •

Wireless LAN module meters are being rolled-out to 2,500 customers in the Cork city urban area and Brandon rural areas. The meters come from Iskraemeco with the communications and IT systems coming from Trilliant. The suitability of the unlicensed 2.4 GHz spectrum is being evaluated.

Meters with PLC based LAN technology provided by Sagem have been deployed in the Limerick and Ennis areas.

ESB concludes in its update paper published in December 2009 that the total number of meters deployed was likely to be in the order of 4,000 to 5,000. It also indicates that it will keep reviewing other available options since smart metering technology is continuously developing and requirements emerge. The findings report on these trials should be published in mid 2010.

4.2.

Electricity Customer Behavior Trials (CBT)

The overall objective of the Electricity CBTs is to ascertain the potential for smart metering enabled energy efficiency initiatives to change consumers' behavior in order to reduce peak electricity demand and overall energy use. The tests are designed to give an accurate indication of what could be expected during the national smart meter roll-out. The findings will also inform the Smart Metering Cost Benefit Analysis. Consumers participating in the CBTs have been allocated to “control” groups and “test” groups. Various energy efficiency initiatives will be introduced to the “test” groups: • Price signals ie. Time of Use tariffs • Enhanced and more frequent information on electricity usage and costs • A financial incentive that will encourage consumers to reduce their overall electricity usage by rewarding them for achieving a target for percentage reduction in their usage Invitation letters (see appendix 1) and FAQ leaflets (see appendix 2) were sent out in September 2008 following a random opt-in approach. The goal was to have a sample reflecting the diversity of customers in terms of energy usage, geography and rural/urban split to ensure that results derived from the trial can be extrapolated to the national electricity consumer base. 35% of the invitees accepted to take part in the trials. By the end of June 2009, the sample was completed and 5,375 residential customers and 764 SMEs were to take part in the project. As a reward, participants will receive a €50 discount on their electricity bill if they take part in the project until completion in December 2010 and fill-in a questionnaire at the beginning and at the end of the trial period. A benchmark data collection period began on July 1st, 2009 and a minimum of 6 months “normal” electricity usage data is now available for trial analysis purposes. This data will help the organizers understand the participants' electricity usage behavior and patterns prior to being introduced to energy efficiency initiatives and can then be compared with the electricity usage

15


Respond 2010 behaviour and patterns of the same trial participants during the test period between January and December 2010. The following diagram gives an overview of the trial design.

Source: CER Information Paper 3: Smart Metering Project Phase 1 (CER/09/186)

• Each test group is exposed to a different type of smart metering enabled energy efficiency initiative during the test period. • The control group does not receive any smart metering enabled energy efficiency initiative during the test period. Instead they continue to receive the standard electricity offering. The control group will allow the comparison of their usage behavior and patterns during the test period with that of the test groups in order to adjust for the impact of any variables unrelated to smart metering that may have impacted electricity usage during the test period e.g. temperature. Participants were informed in December 2009 in which sample group they have been allocated to and the test period started on 1st January 2010. Elter smart meters with GPRS communication modules are used for the CBT trials. In addition an IT system from Energy ICT was installed by ESB Network. This system remotely manages the meters and collects and manages their data. The Smart meter installations started in December 2008 and was completed by the end of June 2009. According to the latest CER report, the data collection system is performing well and half hourly profile data is being collected by this system every day for each customer.

16


Respond 2010 4.2.1.

The TOU tariffs

The time bands have been defined as follows:

Source: CER Information Paper 3: Smart Metering Project Phase 1 (CER/09/186)

and the following prices were allocated to them in October 2009:

Source: CER Information Paper 3: Smart Metering Project Phase 1 (CER/09/186)

The above diagram has also been sent in communication materials to trial participants for instance as a fridge magnet. The actual prices to be used in the CBT have been calculated based on the prevailing standard residential tariff as of October 1st, 2009. Over the period participants trialing these ToU tariffs will not pay any more for their electricity than they would if they had remained on their normal electricity prices. To this end, participants received a credit on

17


Respond 2010 their December 2009 bill and will receive another one in January 2011. If it is calculated at the end of the trial that, even after taking the credits into account, some customers still had to pay more than they would have on their normal electricity price, they will be given a final credit for this amount. These credits are in addition to the two €25 credits available to trial participants for completing the trial surveys. 4.2.2.

Smart billing for residential customers

The electricity CBT will test the effectiveness of enhanced and more frequent information on electricity usage and costs for customers via billing on electricity consumption. Various Smart Billing options were designed on the basis of findings derived from market research. These Smart Billing options were put into focus group research with consumers and the final versions were later agreed. These bills contain the following information: • Financial invoice including line item breakdown of electricity usage costs by time of use; • Table displaying typical costs of running the main household appliances over a full year at the different time of use rates;

Source: CER Information Paper 3: Smart Metering Project Phase 1 (CER/09/186)

• Graphical displays of electricity usage and cost by ToU band for the billing period. Below is a sample mock-up of a residential bill graph which depicts a consumer’s cumulative time of use costs by day of the week for the billing period;

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Respond 2010

Source: CER Information Paper 3: Smart Metering Project Phase 1 (CER/09/186)

• Information panels giving smart energy efficiency tips to consumers about the opportunities for shifting and/or reducing their electricity usage and the costs savings that would result. Individualized motivational messages based on historic usage and peer comparisons will also be included. 4.2.3.

Smart Web for residential customers

The Smart Web Access application will provide online access for a subset of participants to view their detailed consumption and costs in various graphical and tabular formats. The screenshot below illustrates an example of what a Smart Web view might look like.

19


Respond 2010

Source: CER Information Paper 3: Smart Metering Project Phase 1 (CER/09/186)

4.2.4.

In-House display

The display was developed in partnership with Elster. The dynamic display unit will be trialed with a subset of participants and give them real-time and historical information on their electricity usage and associated costs.

Source: CER Information Paper 3: Smart Metering Project Phase 1 (CER/09/186)

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Respond 2010 4.2.5.

Overall Load Reduction (OLR) Incentive

A subset of customers will take part in a test on the effectiveness of an overall load reduction (OLR) incentive. A financial incentive will be promised to consumers who manage to reduce their overall electricity usage. Personalized targets for demand reduction will form the basis of the OLR incentive with financial rewards for consumers who achieve and surpass their targets. In effect, there are two rewards available to motivate consumers to change their electricity consumption, a lower bill as a result of reduced usage plus a reward for achieving the target. Customers testing this initiative will be communicated their demand reduction target at the beginning of the trial and receive feedback on progress towards their target via information on their Smart Bills. The OLR period will run from May to December 2010. The OLR panel on the Smart Bill will compare the overall usage during this period with the overall usage from May to December 2009 (benchmark period). The baseline is set at 10% reduction on benchmark consumption. Consumers will be advised by letter in May 2010 of their OLR target. All consumers on the OLR stimulus will be bi-monthly billed. The first bills with the OLR target will be issued in July for the May/June period. Each bill will show the actual cumulative usage per consumer and will provide an indication of whether they are above or below the end of year target. The cumulative usage will be derived from the bimonthly usage and added to usage since 1st May 2010.

Source: CER Information Paper 3: Smart Metering Project Phase 1 (CER/09/186)

4.3.

Timeline

The timeline of the project is designed as follow:

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Respond 2010

Jul-Dec 2009: 6 month minimum Benchmark Data Collection Period began 1st July 2009 - collect current electricity usage data for trial consumers before the Smart Metering enabled energy efficiency initiatives are introduced. • Jan-Dec 2010: 12 month Test Period will begin on 1st January 2010 measure electricity usage after the introduction of the Smart Metering enabled energy efficiency initiatives. • Feb 2011: Findings Report - understand effect of the Smart Metering enabled energy efficiency initiatives on consumer.

References Cap

22

Gemini,

various

authors,

(2009),

European

Energy

Market


Respond 2010 Observatory 2009. Cap Gemini, VaasaETT and Enerdata (2008), Demand Response: a decisive breakthrough for Europe -
 How Europe could save Gigawatts, Billions of Euros & Millions of tons of CO2, Cap Gemini report series publication, 2008. CER Press Release – 2nd December 2009 "Roadmap to Electricity Market Deregulation". CER, Smart Metering Project Phase 1 Information Paper 3 (CER/09/186) – 7th December 2009 CER, Smart Metering CBTs Electricity Time of Use (TOU) Tariffs – published 2nd October 2009

Energy Retail Market Rankings 5th Edition, Utility Customer Switching Research Project, Published by First Data & VaasaETT. National climate change strategy 2007-2012 Department of the Taoiseach, An Agreed Programme for Government - June 2007 SEI (2010). National statistics. VaasaETT, E-Control, (April 2010), Household Energy Price Index. White paper (March Delivering A Sustainable Future For Ireland

World Wind Energy Report 2008

CER, Smart Metering Project Phase 1 Information Paper 2 (CER/09/118) – 31st July 2009 Smart Metering Project Phase 1 Information Paper 1 (CER/09/024) – 6th Feb 2009 ESB (2008). Annual report. EirGrid (January 2010), Monthly Electricity Statistics Update. EirGrid (July 2009), Monthly Electricity Statistics Update. Eirgrid (2008), Transmission System Performance Report. Lewis, Philip E. (Forthcoming), World

Appendix 1: Electricity CBT Recruitment Invite Letter

23

2007), Energy


Source: CER Information Paper 2: Smart Metering Project Phase 1 (CER/09/118)

Appendix 2: Electricity CBT Recruitment FAQ Leaflet

24


Respond 2010

Source: CER Information Paper 2: Smart Metering Project Phase 1 (CER/09/118)

25


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