Renewable Hubs pilot scheme

ESB Networks (the Distribution System Operator in the Republic of Ireland) and EirGrid (the Transmission System Operator in the Republic of Ireland) are jointly developing a proposal to commence a pilot of Renewable Hubs. The initiative is intended to facilitate increased volumes of customers connecting to the network through an advanced build of “Renewable Hubs”.

The pilot scheme will run in parallel with the opening of the next Enduring Connection Policy (ECP) batch window (ECP-2.4), which will consist of a single batch window opening in October 2023 for two months.

The pilot scheme will be for onshore projects only and is expected to identify a number of locations across the country. The Commission for Regulation of Utilities (CRU) is of the view that a pilot scheme is appropriate to test the system operators’ proposed approach and that it will inform a longer-term process.

What are Renewable Hubs?

The system operators propose that Renewable Hubs will be either new greenfield or existing brownfield substations. At these substations network capacity will be created in a timely manner based on a known pipeline of projects that already have planning permission or that are in the planning process.

Consultation Paper

In June 2023, the CRU published a Consultation Paper[1] on the pilot scheme, with a view to gathering stakeholder feedback on the mechanics of the pilot, as well as any other comments or thoughts that stakeholders might have which they believe might be useful for the CRU’s consideration. The CRU is looking for feedback both on the pilot scheme itself, and on Renewable Hubs as a viable concept in the future.

The Consultation Paper discusses:

• How the Renewable Hubs pilot may facilitate infrastructure delivery in a way that reduces costs and improves the speed and efficiency of connection in locations where renewable energy projects can be connected, therefore helping deliver the pipeline of projects
• Provisional proposals for a standardised, per-MW charging methodology which may provide renewable projects more certainty of their grid connection costs prior to making a grid connection application and bidding into Renewable Energy Support Scheme (RESS) auctions or entering into a Corporate Power Purchase Agreement (CPPA), and
• How Renewable Hubs and a revised charging methodology could help facilitate the connection of community-led projects by removing first-mover disadvantage, reducing costs, and providing developers more certainty of costs

The Consultation Paper also highlights, and invites comments on, several potential risks from the pilot scheme, which include:

• Unforeseen or unintended consequences, including those related to previous rounds of applications
• The lack of clarity to stakeholders, given that new onshore connection policy following ECP-2.4 has not yet been decided upon
• The potential for legal challenges or disputes arising from inclusion or not in a Renewable Hub
• The risk of stranded assets and risk to DUoS and TUoS associated with anticipatory investment, and
• Identification of appropriate locations for Renewable Hubs

Potential of Renewable Hubs

As set out in the Consultation Paper, the delivery of Renewable Hubs has the potential to:

• Connect more renewables efficiently to the network in an optimal manner
• Optimise existing and new grid infrastructure and create additional anticipatory capacity to facilitate future connections
• Reduce the need for repeated costly and resource-intensive interventions on the distribution and transmission networks
• Support achieving the permitting timelines set out in the Renewable Energy Directive (RED II), by streamlining the connection offer process
• Provide renewable project developers with more certainty of their grid connection charges prior to making a grid connection application and bidding into RESS auctions or entering into a CPPA, and
• Facilitate community-led renewable projects connecting to the grid

Conclusion - importance of stakeholder feedback

Stakeholder responses to this Consultation Paper will help inform the basis for the pilot scheme and for future decisions being made by the CRU regarding Renewable Hubs. The responses will be considered in parallel to a detailed proposal expected to be submitted to the CRU by the system operators in late-June 2023, which can then be amended as necessary.

Accordingly, this is a great opportunity for stakeholders to offer their views and to influence the approach that will be taken in the Republic of Ireland on Renewable Hubs.

The Consultation Paper is available at this link: Renewable Hubs Pilot Consultation Paper

The deadline for submitting responses is close of business on Friday 14 July 2023.

For more information, contact a member of our Energy team.

The content of this article is provided for information purposes only and does not constitute legal or other advice

[1] CRU202353