This, the CRU says, would avoid distortions arising from volumetric charging on ESUs, and create a level playing field between ESUs in the Internal Electricity Market (SEM) in Ireland and Northern Ireland, and between ESUs and other generation technologies providing the same services. It will also provide location signals for ESUs.
Since 2020, battery energy storage systems (BESS) have been operating under a scheme introduced by the CRU as an interim decision stating that ESUs would only pay D-TUoS, and not both generator and demand fees, as previously required.
However, the CRU now acknowledges that the decision “may not accurately reflect the costs imposed by BESS on the network and represents a potential barrier to entry”.
Indeed, in 2020 the CRU planned a full review of network tariffs as part of a wider review of Electricity Network Tariffs 2 (the ENTSR), but that was postponed in 2022 to use CRU resources to manage the impact of Russia’s invasion of Ukraine.
Furthermore, the CRU notes that there has been increased investment in energy storage in Ireland since 2020 and that the role of BESS has “substantially” changed from providing system support to being able to participate in the wholesale market.
As such, the regulator plans to implement a revised interim decision to specify that ESUs must pay G-TUoS, and not D-TUoS.
While this will increase costs for the remaining D-TUoS customers, the importance of ESUs in delivering the “future energy system”, one based on renewable energy sources, means it plans to make the change anyway. The CRU estimated a 2% increase in costs, with an additional 0.2% increase in standard domestic energy bills.
The trade body representing the energy storage sector in Ireland, Energy Storage Ireland, called the CRU position “great news for the Irish storage industry”. It also notes that figures from Economic Consulting Associates (ECA), cited in the CRU’s decision, suggest that the benefit of removing D-TUoS fees is a 30% increase in storage usage, resulting in a net saving for customers of €37 million (£32.2 million) per year.
The Irish government is working towards a target of 80% renewable energy sources (RES) by 2030. The CRU said further investment in ESU capacity will be needed to meet this.
This was evident from figures from grid operator EirGrid last week Renewables met just under 49% of Ireland’s electricity demand in March.
