NIE Networks decision paper on over install
Background & Previous Position
Within the energy sector, the term ‘over install’ refers to the practice of installing more energy generation capacity (such as solar panels, wind turbines, or power plants) than is currently needed to meet the immediate demand for electricity. A self-imposed cap is applied to the output, so that the contracted maximum export capacity (MEC) at the point of connection is not exceeded. Although over installation can lead to higher upfront costs, it can provide businesses with energy security and help businesses meet renewable policy targets.
Until now, the existing position on over install was as set out in the Alternative Connection Application and Offer Process (ACAOP) Decision Paper of May 2016. This stated that the total installed capacity at a point of connection could be no greater than 120% of the MEC for both hybrid sites and single technology sites connecting to the distribution system (the Over Install Limit).
Following NIEN Networks Limited (NIEN) and SONI Ltd’s (SONI) joint proposal to amend the existing over install arrangements, the revised position has been agreed, coming about as the result of a consultation process which sought feedback from relevant stakeholders and closed in July 2023.
The ‘Decision on Changes to Over Install for Single Technology & Hybrid Co-Located Technology’ was published on 6 October 2023 (the Decision Paper) and effectively removes the Over Install Limit. The Decision Paper outlines the position for both single technology sites and hybrid co-located sites connected to the distribution system and the transmission system.
Decision & Next Steps
The key outcomes outlined in the Decision Paper are set out below:
- The Over Install Limit will be removed for single technology sites and hybrid co-located sites seeking to connect to the distribution system, with NIEN and SONI following the relevant offer process going forward.
- For single technology and hybrid co-located sites seeking to connect to the transmission system, the Over Install Limit will only be removed once any remaining areas possibly requiring change are adequately addressed (as set out in Appendix 2 of the Decision Paper).
- For hybrid co-located sites that are required to or choose to register in the single electricity market (SEM), the Over Install Limit will be removed once the sharing of MEC behind a single connection point is enabled.
The decision to remove the Over Install Limit has been made with the assumption that it will not have any material negative impact on consumers. The updated arrangements will apply to grid connection offer and agreements arising from applications received from 7 November 2023 at 10:00am for distribution connections.
Interestingly, the go-live date has been set to align with the recent decision to amend the existing connection offer policy for exporting small scale generators with a registered capacity of less than 5MW (SSG). That consultation process closed in May 2023 and the decision paper released on 31 August 2023 confirmed that SSG Distribution Connection Offers and Agreements would be updated to include edited wording that permits control requirements to be utilised for system security reasons. NIEN and SONI have confirmed that a decision was made to align the go-live dates of the overlapping processes in an effort to ease the complexity of any applications seeking to avail of both updated positions.
For more information please contact Mark Stockdale, Partner, or your usual Energy, Infrastructure & Natural Resources Belfast team contact.
Date published: 23 October 2023.