Northern Ireland to end micro-generation 'deemed export' regime

Out-Law News | 16 Mar 2018 | 9:49 am | 2 min. read

The Utility Regulator for Northern Ireland has approved a proposal to end calculation of renewable micro-generation revenues based on 'deemed export', and move to a system based on 'actual' metering data.

The new system is intended to ensure more accurate data aggregation, submission and revenue payments. However, the change will have financial and administrative consequences for generators, according to energy law specialist Laura Donnelly of Pinsent Masons, the law firm behind Out-Law.com.

The deemed export regime was introduced by network operator NIE Networks in 2015 as a way of paying micro-generators for generated power not consumed on site, where no half-hourly meters were installed and no actual export data was readily available. Under the regime, micro-generators receive payments based on a percentage of the installed capacity of each generating station, rather than the actual volume of output exported onto the grid.

The regime was only ever intended to be an interim measure pending the development of a 'smart meter' policy in Northern Ireland. Smart meters, which are currently being rolled out in Great Britain and will soon be introduced in the Republic of Ireland, are capable of calculating the actual amount of electricity exported to the grid and relaying this information remotely to asset owners. However, there is as yet no planned roll out of smart meters in Northern Ireland.

The new scheme, based on actual metering data, was proposed by NIE's Central Design Authority (CDA), via the all-Island Retail Market Design Service's Discussion Request process. The CDA is an industry group which represents NIE and electricity suppliers in NI. The discussion request, DR1186 (3-page / 173KB PDF), initially required all suppliers offering micro-generation tariffs to have submitted meter point reference numbers (MPRNs) and first export meter readings to NIE Networks by 1 November 2017, when the new regime was set to commence.

“Concerns have been raised by various stakeholders about the implementation of this shift in regime in such a short timescale and the lack of clear detail beyond the contents of Discussion Request DR1186,” said energy law specialist Laura Donnelly. “As a result we understand that some concessions may have now been made by the CDA to allow the submission of ‘first’ actual export data up to 1 May 2018, potentially enabling some affected stakeholders to receive revenues for at least part of the year, and that further clarifications are possible."

Donnelly explained that, without smart meters, NI electricity suppliers and generators would be required to physically collect or obtain actual meter readings from micro-generation sites. Meters are often installed inside domestic premises and accessing them can be problematic, as suppliers and generators are dependent on having direct contractual rights with or obtaining the consent of the property owner. This is a costly and time-consuming exercise for stakeholders with potentially very large asset portfolios, often producing unreliable figures which cannot be properly verified.

"Whilst increased accuracy in measuring the export of electricity should be on the agenda, the changes approved by the Utility Regulator in relation to deemed export could be considered too much, too soon for Northern Ireland, as clearly demonstrated by the significant administrative burden being imposed on electricity suppliers and micro-generators. Without a detailed plan from the CDA as to how these changes will be implemented, or sufficient time allowed to prepare for this change in regime, stakeholders are likely to incur significant time and cost in trying to comply with these requirements by October 2018", she said.

The proposed regime change can be contrasted with the approach taken in Great Britain, where the transition away from a 'deemed export' system is only enforced once a smart meter has been installed at the relevant property. Deemed export is still applied at a rate of 50% for wind and solar generation where micro-generators in Great Britain do not have meters capable of accurately measuring and reporting export data.