Thursday, May 16, 2019
The first stage of the selection process for the DS3 System Services Volume Capped competition is underway. This DS3 System Services competition aims to procure between 91MW and 140MW of Services under fixed contracts in accordance with the SEM Committee’s Decision on DS3 System Services Fixed Contracts Procurement Arrangements (SEM-18-049). This competition focuses on “high availability technologies” such as battery storage, flywheels and demand side units whose availability are not linked to energy market dispatch. It is expected that battery energy storage will secure most of the contracts awarded under the competition.
In this first stage (scheduled to complete shortly), candidates must meet the appropriate contractual and technical pre-requisites in order to then be selected to progress to the second stage and be invited to tender for the provision of the System Services. The winning bids will be ranked based on price.
In respect of the technical requirements, Providing Units will be required to provide a sub-set of DS3 System Services as well as Over-Frequency Response. Service Providers with non-firm connections will take the risk of network unavailability due to network limitations and will not be remunerated if unavailable in such circumstances. The maximum contracted volume per separate grid connection will be set at 50MW.
In advance of the second stage of the tender process, EirGrid published on the 15th of May 2019 a draft of the template contract to be awarded to the successful Service Providers. This draft contract takes into account the responses received by EirGrid to the Consultation on the DS3 System Services Volume Capped Fixed Contracts dated the 25th of October 2018.
Some of the noteworthy provisions contained in the draft contract include:
The conclusion of the first stage of the selection process of the DS3 System Services Volume Capped competition is imminent with EirGrid shortlisting candidates who will be invited to tender for the contracts. We have advised on a number of investments and development opportunities in this area over the last few months, in particular for clients with experience in battery energy storage and the provision of System Services in other markets. Many energy market players are eagerly awaiting the outcome of this competition.
For more information on DS3, battery storage or any other aspects of the Irish energy market, please contact Siobhán McCabe, Partner and Head of Energy at Philip Lee.
Article written with the assistance of Harry O’Malley.