Effect of Recent DCCAE Decision on Electricity Supports Schemes in I-SEM

On Thursday 14 June, the Department of Communication, Climate Action and Environment (“DCCAE”) issued its Decision Paper detailing how electricity support schemes will work in the I-SEM (‘Integrated Single Electricity Market’). In respect of the calculation of the energy component of the market revenue for wind generators supported under the REFIT and AER Schemes transitioning to the I-SEM, the Department decided to reinforce its previously proposed ‘Option B’ or ‘Blend... On Thursday 14 June, the Department of Communication, Climate Action and Environment (“DCCAE”) issued its Decision Paper detailing how electricity support schemes will work in the I-SEM (‘Integrated Single Electricity Market’). In respect of the calculation of the energy component of the market revenue for wind generators supported under the REFIT and AER Schemes transitioning to the I-SEM, the Department decided to reinforce its previously proposed ‘Option B’ or ‘Blended Approach’, which may be summarised as follows: For all supported wind generators above 5MW capacity: The market revenue for such wind generators will, for the energy component, be based on the lower of a blend of 80% of the Day Ahead Market Price and 20% of the Balancing Market Price, and the Day Ahead Market Price. For all supported wind generators below 5MW: The market revenue calculation will, for the energy component, be based on the lower of a blend of 70% of the Day Ahead Market Price and 30% of the Balancing Market Price, and the Day Ahead Market Price. As regards DS3 revenue, the Decision confirms that the Department will continue to propose not to include potential DS3 System Service revenues in the Total Market revenue on the basis that DS3 payments provide a new revenue stream to PSO supported generation and in the case of wind generation provides an opportunity to be remunerated for reducing curtailment on the system. The Department indicated that it will now initiate the necessary steps to seek state aid approval in respect of the Decision.