Www.rbsmarkets.com France, UK, Ireland Regional Initiative Stakeholders Meeting 3 rd December 2008 A...

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France, UK, Ireland Regional InitiativeStakeholders Meeting

3rd December 2008

A Mutual Energy Company Working for Consumers

Paddy Larkin

Trading across the Moyle Interconnector

Moyle Interconnector (Financing) plc

Moyle GovernanceA mutual company:-

Set up to reduce cost of energy in Northern Ireland and bring energy infrastructure

back into local ownership

No shareholders• All profits and savings are for long term benefit of NI customers

100% debt financed at a very low cost of finance• Financiers have a major say in operation of business

• Cash is king and reserves to cover debt repayments must be held

• Stable, enabling regulatory regime is required

A separate business – not a branch of DETI or NIAUR…or NIE• Regulatory oversight enshrined in our licences


Corporate Structure

Northern Ireland Gas Transmission Holdings

Interconnector Services Ltd

Moyle Interconnector Holdings Ltd

Premier Transmission Holdings Limited

Premier Transmission Financing plc

Premier Transmission Limited

Belfast Gas Transmission Holdings

Limited

Belfast Gas Transmission Financing plc

Belfast Gas Transmission Limited

Moyle Interconnector Financing plc

Moyle Interconnector Ltd

Moyle Energy Investments Ltd


The companies

Company Activity Mutualised

Bond Term Ratereal

Moyle Interconnector

500 megawatt DC link Scotland to NI

2003 £135m 30year 2.94%

Premier Transmission

Scotland to Northern Ireland gas pipeline

2005 £107m 25year 2.46%

Belfast Gas Transmission

Phoenix transmission gas pipeline Islandmagee to Belfast

2008 £109m 40year 2.21%

Also Interconnector Services Limited (joint tendering for common services)Moyle Energy Investments Limited (Investment vehicle – e.g. EREF)


Moyle

Distribution of Surplus Revenues back to

CustomersO&M Costs

BondServicing

Repairs andMaintenance

Converter Station Rates

SP Connection

Charges

MaintenanceManagement

InsuranceGeneral

Administration

“Top-up” collected from all suppliers via NIE’s

T&D charges

Moyle Revenues based on regulatory framework

Collection Agency Agreement with SONI

Auction income from Capacity Holders

CLG Costs

CLG Costs


Moyle Vital Statistics• Commercial Operations April 2002

• Capacities

– Technical 500MW each way

– Commercial / available to users• 450MW Scotland to NI winter

• 410MW Scotland to NI summer

• 80MW NI to Scotland

• Bipole (i.e. 2 x 250MW – unusual for full plant failure)

• HVDC (i.e. can force flows independent of voltages/ frequencies)

• Integrated Return Conductor (i.e. only 2 subsea cables instead of 4)

• Light triggered thyristor technology (i.e. more reliable than wired)

• Availability typically >99% (limited flow impact) but exposed to single circuit overhead line in Scotland

• Losses typically 2.2% (commercially set at 1.9%)


Belfast

Ayr

Stranraer

Overhead Line Route

Underground Cable Route

Coylton Substation

Auchencrosh Converter Station

Ballycronan MoreConverter Station

CurrariePort

ELEMENTSof the

MOYLEINTERCONNECTOR Ayrshire

Arran

Larne

Undersea Cable Routes

Co.AntrimPortmuck

Kintyre

NorthChannel

Belfast

Ayr

Stranraer

Overhead Line Route

Underground Cable Route

Coylton Substation

Auchencrosh Converter Station

Ballycronan MoreConverter Station

CurrariePort

ELEMENTSof the

MOYLEINTERCONNECTOR Ayrshire

Arran

Larne

Undersea Cable Routes

Co.AntrimPortmuck

Kintyre

NorthChannel


Ballycronan More Converter Station


Direct-light-triggered Thyristors


Coylton - Auchencrosh 275kV Line


Moyle Capacity Allocations• All commercial capacity auctioned (pay as bid) in 5MW blocks

• Allocation process approved by NIAUR (updated annually)

– Maximum reserve price

– Minimum quantities for various products

– Auction and auction notification timing boundaries

• 1,2 and 3 year standard products (normally Oct – Sep)

• Monthly standard product

• Monthly non-standard product

• Standard product carries a standard reserve price (currently £2078/MW/month) and no restriction on usage

• Non standard product carries a reduced equivalent reserve price (has been as low as £100/MW/month) and usage over a certain level attracts a further charge (typically over 30% utilisation factor)


Moyle Auction process• All auctions carried out by SONI as Moyle’s agent and overseen by NIAUR

• Invitation to bid issued in advance (approx 1 month for long term and 1 week for monthly) – available on SONI website – www.soni.ltd.uk

• No need to register to bid – but bidders must be eligible for bids to be accepted (entered into MICFA – Moyle Interconnector capacity Framework Agreement)

• Typically 3 auctions for longer term capacity aligned with directed and non directed auction process and customer contracting timetable

• Monthly capacity typically auctioned 5 days in advance

• Sealed bid manual auction format

• Unsold monthly capacity may be sold bi-laterally within month

• Intention to move to more granularity but will require automated auction system

• Add on border to system being developed for IFA appears best option (standardisation, linking of auctions, Betta compliant) – interested in views


Average auction prices since Jan 07

0.00

2.00

4.00

6.00

8.00

10.00

12.00

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41

£k/M

W/m

on

th


Import Capacity MW Allocations for 12 months starting 01-Nov-07

0

50

100

150

200

250

300

350

400

450

500

01/1

1/20

07

01/1

2/20

07

01/0

1/20

08

01/0

2/20

08

01/0

3/20

08

01/0

4/20

08

01/0

5/20

08

01/0

6/20

08

01/0

7/20

08

01/0

8/20

08

01/0

9/20

08

01/1

0/20

08

MW

Unalloacted

SSEI

NIE PPB

ESBI

Energia

Airtricity

Bord Gais Eireann


Export Capacity MW Allocations for 12 months starting 01-Nov-07

0

10

20

30

40

50

60

70

80

01/1

1/20

07

01/1

2/20

07

01/0

1/20

08

01/0

2/20

08

01/0

3/20

08

01/0

4/20

08

01/0

5/20

08

01/0

6/20

08

01/0

7/20

08

01/0

8/20

08

01/0

9/20

08

01/1

0/20

08

MW

Bord Gais Eireann Airtricity

Energia ESBI

NIE PPB SSEI

MW


2008 Daily Average load factors

-80-60-40-20

020406080

100120140160180200220240260280300320340360380400

01-J

an

15-J

an

29-J

an

12-F

eb

26-F

eb

11-M

ar

25-M

ar

08-A

pr

22-A

pr

06-M

ay

20-M

ay

03-J

un

17-J

un

01-J

ul

15-J

ul

29-J

ul

12-A

ug

26-A

ug

09-S

ep

23-S

ep

07-O

ct

21-O

ct

04-N

ov

18-N

ov

02-D

ec

16-D

ec

30-D

ec

Date

Av

era

ge

loa

d f

ac

tor

da

ily

Average import load MW

Average export load MW

If it is commercially viable to flow from GB to SEM in a particular hour why does the interconnector not fill up in that period?


Existing Moyle Users

• Bord Gáis Éireann• ESB Independent Energy• Scottish and Southern Energy• Scottish Power• SONI (System Operator Northern Ireland)

• Viridian


Trading across Moyle - General• Must be registered in SEM and BETTA to use the capacity

• SONI will (if desired) submit PN’s to BETTA

• Moyle requires 3 months credit cover for capacity sales

• No TNUoS on interconnector flows in SEM

• Betta TNUoS passed through to capacity holders (fixed monthly for generation; estimated demand TNUoS on capacity held during Triad months – reconciled later)

• Capacity holdings and final nominations entered on MITS (Moyle interconnector trading sytem) – part of SEM systems

• IU’s allowed 10 PQ bids for each half hour period at 10:00 D-1

• Accepted bids are modified to take account of interconnector deadband (+/-15MW) and ramping (10MW/min) before final nominations are determined

• Final nominations are only revised if Moyle availability changes

• All quantities quoted at Scotland side of the interconnector


Potential barriers to trade

• Risk appetite of Interconnector users• Uncertainty of SMP D-1• Lack of liquidity in Betta• Lack of half hourly pricing in Betta at D-1• TNUoS / BSUoS uncertainty• Capacity payment uncertainty• Cost of interconnector capacity• Competition/ lack of arbitrage traders• Manual auction system/ lack of granularity


Further information available on:

www.nienergyholdings.com www.soni.ltd.uk


Questions?

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