Eirgrid Plc Annual Report 2010 Securing Ireland’S Electricity Supply Eirgrid Plc Plc Eirgrid Annual Report 2010 Report Annual
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EirGrid plc Annual Report 2010 Securing Ireland’s Electricity Supply EirGrid plc Annual Report 2010 The Oval, The Oval, 160 Shelbourne Road, 160 Bóthar Shíol Bhroin, Ballsbridge, Droichead na Dothra, Dublin 4. Baile Átha Cliath 4. Tel +353 (0)1 677 1700 Teil +353 (0)1 677 1700 Fax +353 (0)1 661 5375 Faics +353 (0)1 661 5375 [email protected] www.eirgrid.com PRN A11/0158 EirGrid plc Annual Report & Accounts 2010 97 Glossary GROUP STRUCTURE APEx – Association of Power Exchanges CCGT – Combined Cycle Gas Turbine CER – Commission for Energy Regulation plc CGU – Cash Generating Unit CIGRE – International Council on Large Electric Systems CRM – Credit Risk Management CSR – Corporate and Social Responsibility DETI – Department of Enterprise, Trade and Investment DSO – Distribution System Operator 75% EEPR – European Energy Programme for Recovery UK Holdings Limited EMS – Energy Management System ENTSO-E – European Network of Transmission System Operators for Electricity EWIC – East West Interconnector HAS – Harmonised Ancillary Services 25% HTLS – High-Temperature Low-Sag HVDC – High Voltage Direct Current Interconnector Limited Limited IBEC – Irish Business and Employers Confederation IFRS – International Financial Reporting Standards IWEA – Irish Wind Energy Association kV – Kilovolts MEC – Maximum Export Capacity MO – Market Operator TSO TSO MOUG – Market Operator User Group MW – Megawatt MWh – Megawatt Hours NCC – National Control Centre NIAUR – Northern Ireland Authority for Utility Regulation PAC – Planning Appeals Commission RIDP – Renewable Integration Development Project SEAI – Sustainable Energy Authority of Ireland EirGrid plc is a leading energy company committed to delivering high quality services SEM – Single Electricity Market in Ireland and Northern Ireland. The Group includes the EirGrid Transmission System SEMO – Single Electricity Market Operator Operator (TSO) business in Ireland; System Operator Northern Ireland (SONI), the SMP – System Marginal Price licensed TSO in Northern Ireland; the Single Electricity Market Operator (SEMO) SONI – System Operator Northern Ireland which operates the Single Electricity Market on the island of Ireland; and EirGrid SSS – System Support Services Interconnector Limited, the East West Interconnector asset owner. TSC – Trading and Settlement Code TSO – Transmission System Operator TUoS – Transmission Use of System TW – Terawatt TWh – Terawatt hours WACC – Weighted Average Cost of Capital WPDRS – Winter Peak Demand Reduction Scheme WSAT – Wind Security Assessment Tool EirGrid plc Annual Report & Accounts 2010 1 Contents Chairperson’s Report Chief Executive’s Report Financial Review Operating the Power System in Ireland 10 Operating the Power System in Northern Ireland 1 Transmission System Map 0 Developing Transmission Infrastructure Operating the Single Electricity Market Corporate and Social Responsibility 0 Our Customers The Board Organisation Structure 1 Executive Team Financial Statements 5 Glossary 97 EirGrid plc Annual Report & Accounts 2010 Chairperson’s Report I am pleased to present EirGrid’s We also believe it is vital to Annual Report for the 12 months transfer the transmission assets to ended 30 September 2010 – in what EirGrid, to underpin transmission was undoubtedly a period of rapid development and provide a more change and major challenges for competitive electricity supply to the island of Ireland. customers. This transfer, which has been Government policy for the last Our annual report covers our roles four years, is backed by the EU and as Transmission System Operator by all major independent national in Northern Ireland and Ireland, and international commentators and in the operation of the Single in the interests of delivering Electricity Market across the island. significant benefits to customers Our objective during the year has and stakeholders, more efficient been to ensure that our ownership development of the grid, and the of businesses in both jurisdictions achievement of Ireland’s renewable delivered synergies and benefits targets. During 2009/10 we engaged to all of our customers. constructively with the independent The year to 30 September 2010 chairman Mr Fergus Cahill, and was extremely busy for EirGrid, with Frontier Economics who were with significant additional resources retained by the Department of focussed on the crucial work of Communications, Energy and Natural developing upgraded transmission Resources to look at the issue of the infrastructure. It is vital that the transfer of assets. public accept and understand In the year to September 2010, the benefits of a strong electricity EirGrid continued to make a stable transmission system and the need to return on assets, with an operating build infrastructure, while meeting all profit in the year in question of public planning and environmental €15.7 million. standards. If we do not succeed in this, our capacity in the future to Group borrowings were €147.7 operate the grid reliably and securely million in September 2010, reflecting will be severely compromised due to our major investment in the East limitations in grid availability, with West Interconnector project, which is implications for future economic on schedule for delivery at the end of development, competitiveness 2012. The certainty of the regulatory and our capacity to harness the framework supporting the East West opportunity created by renewable Interconnector allowed the Group to energy. secure very competitive funding for the project. EirGrid plc Annual Report & Accounts 2010 I would like to thank all of the In EirGrid, we are very conscious of members of the EirGrid Board for the need to continuously improve their unstinting commitment and work in all of our operations, so that we during the year. In addition, I thank can play our role in the economic the Minister for Communications, recovery which will benefit our Energy and Natural Resources during customers. I can assure all of our the period in question, Eamon Ryan customers and stakeholders of our TD, and his officials for their excellent commitment to this in the years support during the year. ahead. And finally, at the core of our organisation are the expertise, commitment and hard work of our Chairperson employees. I would like to thank our Chief Executive, Dermot Byrne, the Bernie Gray management team, and all of the staff working in the Group for their contribution in the past year. EirGrid plc Annual Report & Accounts 2010 Chief Executive’s Report EirGrid’s core mandate is the System Operation reliable and efficient operation During the year we continued to of the power system and the ensure security and reliability of wholesale power market on supply in Ireland and Northern the island of Ireland, and the Ireland, meeting our security of development of a fit for purpose supply performance indicators. The electricity infrastructure. By focusing island experienced extremely cold all our efforts on delivering on weather conditions in December 2009 this core mandate effectively and and early January 2010 which led to efficiently we are assisting in the record high system peak demand. process of economic recovery. Key During the freezing temperatures areas of delivery during the year there were a number of faults at included the following: power stations and on transmission n Operating the power system lines in Ireland, but no customers in Ireland and Northern Ireland were affected. This was in no small reliably and securely 24/7. part due to the work and close co- operation of our staff in the Control n Operating the Single Electricity Market efficiently and Centres in Dublin and Belfast. transparently seven days a week. In Northern Ireland an ice storm n Progressing implementation occurred on 30 and 31 March 2010 of the Grid5 strategy for the which resulted in major challenges development of the transmission through weather related faults network in Ireland and achieving causing damage to transmission key milestones. lines. However system stability and n Securing funding for the East integrity was maintained through all West Interconnector, with these events. In this, the experienced the project moving from the operations staff in Castlereagh House planning and permitting phase Control Centre were facilitated by the to the construction phase. The recent investment in state of the art project remains on track for control centre facilities. commissioning in 2012. During the period from January to n Connecting significant wind December 2010 energy consumption generation in line with progress was 27 TWh (terawatt hours). on the 2020 targets. This represented a 0.9% increase on consumption on the previous year. In Northern Ireland, demand increased by 2.7%. EirGrid plc Annual Report & Accounts 2010 5 Market Operation the year. The upgrading and/or East West Interconnector All market activities occurred refurbishment of 300km of existing During the year, work advanced to materially on time throughout circuits, representing about 5% program on design, manufacture 2010 and the market remained of the total transmission circuit and installation of the East fully collateralised. An Independent length in the country was also West Interconnector project. The Market Audit was completed and an completed during the year. The first Interconnector is on target for unqualified Market Audit Report was transmission line up-rate using the completion in 2012. Trenching and received. new high-temperature-low-sag (HTLS) laying of ducts for almost the entire conductor selected