This document discusses how companies can generate revenue from energy demand side reduction and power generation through Energy Trading Ireland's (ETI) services. ETI contracts with site owners to bid their capacity into the Single Electricity Market (SEM) in exchange for capacity payments that are then paid to the site owners. There are two options for participation - as an Aggregated Generating Unit (AGU) or Aggregated Demand Side Unit (DSU). A DSU has lower requirements and costs compared to an AGU, and allows revenue generation from reducing on-site demand using methods like switching off loads or using diesel generators for load suppression. ETI estimates annual capacity payments of £15k-£20k per MW depending on a

2. DERIVING REVENUE FROM ENERGY;
DEMAND SIDE REDUCTION & POWER
GENERATION
PRESENTED BY:
MICHAEL JACKSON MSc CEng FEI Chartered Energy Engineer
MANAGING DIRECTOR, ETI
21st March 2014

3. SINGLE ELECTRICITY MARKET - OPERATION

4. WHAT SERVICE DOES ENERGY
TRADING IRELAND (ETI) PROVIDE ?
1. ETI contracts with each site owner/client and bids the capacity into the
Single Electricity Market (SEM)
2. SEM pays ETI Capacity Payments – ETI pay each client as per the
ETI/Client contract
3. ETI pays capacity annually - DSUs energy is recompensed by avoided
demand, DUOS and TUOS during the time of dispatch.
4. There are three ways to reduce demand:
- Direct demand reduction – pumps, fans, compressors, air conditioning etc.
- Suppress demand using a stand-by diesel (or other generator)
- A combination of 1 & 2.

5. WHY ARE CAPACITY PAYMENTS MADE?
1. Capacity payments are made to incentivise generators to provide
capacity.
2. Capacity payments are made whether or not the generators are
scheduled to run.
3. In UK and Ireland our maximum demand is in November – February
but capacity payments still must be paid to ensure these power
stations remain available and commercially viable.
4. Outside of the winter peak many of the expensive peak generators will
not be required to generate as the demand will have reduced.
5. Generation and electrical demand must always be in balance every
second. Failure to balance = blackouts.

6. NIE LOADCURVE

7. ETI Services
Aggregated Generating Unit Aggregated Demand Side Unit
M
NIE Network
G Load
M
MEC
M
NIE Network
G Load

8. WHAT IS REQUIRED FOR INCLUSION IN THE AGU?
System Requirements:- No longer financially viable for most sites!!
1. An MEC (maximum export capacity) – depends on the local NIE/ESB network £1200
2. A separate electricity meter required on generator tails - £600
3. Synchronizing panel - £10K
4. G59/G10, NVD, under/over frequency protection (costly!) NVD - £40K
5. NIE SCADA - £10K
6. Set up local RTU (remote terminal unit) to communicate with ETI’s SCADA system for
monitoring and control of the generator controller and plant
7. Contract with Energy Trading Ireland (ETI)

9. DSU - WHAT IS REQUIRED?
System Requirements:- Recommendation for most clients!!
1. An MEC (maximum export capacity) – NOT REQUIRED but will increase
income potential. (Depends on the local NIE/ESB network)
2. A separate electricity meter required on generator tails – NOT REQUIRED
3. Contactors on switched circuits/loads – YES (if offering direct demand
reduction)
4. Synchronizing panel - if you don’t want to ‘island’ the site.
5. G59 protection to Generator
6. Set up local RTU (remote terminal unit) to communicate with ETI’s SCADA
system for monitoring and control of the generator controller and plant
7. Contract with Energy Trading Ireland (ETI)

11. WHY USE ETI SERVICE IN YOUR BUSINESS ?
• Your business has existing infrastructure which could be earning significant
revenue - large standby diesel generators /large demand which can be
reduced.
• Presently it is costing your business to maintain diesels.
• ETI provide a personalised service to maximise income. We discuss with
the client the income from capacity payments versus their operational
requirements. The client decides what they want ETI to trade!!

12. HOW MUCH COULD YOUR COMPANY EARN?
• Anticipated £15k - £20k/MW/yr (subject to technical feasibility).
• If using DSU the capacity payment will be based on your demand
curve and the load which we can reduced by ‘switching off’ and/or
using diesels for load suppression.

13. WHAT ARE THE RISKS? – FEW!!
• If the company previously carried out demand reduction they will
understand what is involved
• The diesels are paid for sharing their capacity with the SEM, irrespective
of whether, or not, they are called to run
• They are the most expensive generation available to the TSOs, therefore
will be the last to be ‘called’.
• In 2011-12 they were ‘called’ for 1hr in the whole year
• In 2012-13 they have not been called
• Capacity is increasing so the likelihood is diminishing
• Additional benefits: 24/7 monitoring of diesels and fuel stock levels