Transcript Main Title of Document

www.rbsmarkets.com
A Mutual Energy Company Working for Consumers
France, UK, Ireland Regional Initiative
Stakeholders Meeting
3rd December 2008
Trading across the Moyle Interconnector
Paddy Larkin
Moyle Governance
A mutual company:
Set up to reduce cost of energy in Northern Ireland and bring energy infrastructure
back into local ownership
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No shareholders
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All profits and savings are for long term benefit of NI customers
100% debt financed at a very low cost of finance
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Financiers have a major say in operation of business
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Cash is king and reserves to cover debt repayments must be held
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Stable, enabling regulatory regime is required
A separate business – not a branch of DETI or NIAUR…or NIE
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Regulatory oversight enshrined in our licences
Moyle Interconnector (Financing) plc
Corporate Structure
Interconnector
Services Ltd
Moyle Interconnector (Financing) plc
Moyle Energy
Investments Ltd
Northern Ireland Gas
Transmission Holdings
Moyle Interconnector
Holdings Ltd
Belfast Gas
Transmission Holdings
Limited
Premier Transmission
Holdings Limited
Moyle Interconnector
Financing plc
Belfast Gas
Transmission
Financing plc
Premier Transmission
Financing plc
Moyle Interconnector
Ltd
Belfast Gas
Transmission Limited
Premier Transmission
Limited
The companies
Company
Activity
Mutuali Bond
sed
Term
Rate
real
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 Interconnector (Financing) plc
Moyle Revenues based on regulatory framework
“Top-up” collected from
all suppliers via NIE’s
T&D charges
Auction income from
Capacity Holders
Moyle
Bond
Servicing
O&M Costs
Collection Agency
Agreement with
SONI
Distribution of Surplus
Revenues back to
Customers
CLG Costs
CLG Costs
Moyle Interconnector (Financing) plc
Repairs and
Maintenance
Converter
Station Rates
SP
Connection
Charges
Maintenance
Management
Insurance
General
Administration
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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
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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%)
Moyle Interconnector (Financing) plc
Kintyre
ELEMENTS
of the
MOYLE
INTERCONNECTOR
Overhead Ayrshire
Line Route
Undersea Cable
Routes
Co.Antrim
Moyle Interconnector (Financing) plc
Currarie
Port
Portmuck
Auchencrosh
Converter Station
Underground
Cable Route
Larne
Stranraer
Ballycronan More
Converter Station
Belfast
Coylton
Substation
Ayr
Arran
North
Channel
Ballycronan More Converter Station
Moyle Interconnector (Financing) plc
Direct-light-triggered Thyristors
Moyle Interconnector (Financing) plc
Coylton - Auchencrosh 275kV Line
Moyle Interconnector (Financing) plc
Moyle Capacity Allocations
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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 Interconnector (Financing) plc
Moyle Auction process
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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
Moyle Interconnector (Financing) plc
Average auction prices since Jan 07
12.00
£k/MW/month
10.00
8.00
6.00
4.00
2.00
0.00
1
3
Moyle Interconnector (Financing) plc
5
7
9
11
13
15
17
19
21
23
25
27
29
31
33
35
37
39
41
Unalloacted
Import Capacity MW Allocations for 12 months starting 01-Nov-07
SSEI
NIE PPB
ESBI
500
Energia
450
Airtricity
400
Bord Gais Eireann
350
250
200
150
100
50
Moyle Interconnector (Financing) plc
01/10/2008
01/09/2008
01/08/2008
01/07/2008
01/06/2008
01/05/2008
01/04/2008
01/03/2008
01/02/2008
01/01/2008
01/12/2007
0
01/11/2007
MW
300
Bord Gais Eireann
Energia
NIE PPB
MW
Export Capacity MW Allocations for 12 months starting 01-Nov-07
80
Airtricity
ESBI
SSEI
70
60
40
30
20
10
Moyle Interconnector (Financing) plc
01/10/2008
01/09/2008
01/08/2008
01/07/2008
01/06/2008
01/05/2008
01/04/2008
01/03/2008
01/02/2008
01/01/2008
01/12/2007
0
01/11/2007
MW
50
Average import load MW
Average export load MW
Date
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?
Moyle Interconnector (Financing) plc
30-Dec
16-Dec
02-Dec
18-Nov
04-Nov
21-Oct
07-Oct
23-Sep
09-Sep
26-Aug
12-Aug
29-Jul
15-Jul
01-Jul
17-Jun
03-Jun
20-May
06-May
22-Apr
08-Apr
25-Mar
11-Mar
26-Feb
12-Feb
29-Jan
15-Jan
400
380
360
340
320
300
280
260
240
220
200
180
160
140
120
100
80
60
40
20
0
-20
-40
-60
-80
01-Jan
Average load factor daily
2008 Daily Average load factors
Moyle Interconnector (Financing) plc
Existing Moyle Users
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Bord Gáis Éireann
ESB Independent Energy
Scottish and Southern Energy
Scottish Power
SONI (System Operator Northern Ireland)
Viridian
Trading across Moyle - General
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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
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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
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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
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All quantities quoted at Scotland side of the interconnector
Moyle Interconnector (Financing) plc
Potential barriers to trade
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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
Moyle Interconnector (Financing) plc
Further information available on:
www.nienergyholdings.com
Moyle Interconnector (Financing) plc
www.soni.ltd.uk
Moyle Interconnector (Financing) plc
Questions?