On 1 March 2013 the Single Electricity Market Committee (SEMC) published its final decision on the treatment of curtailment of wind energy in tie-break situations.

The decision will be of particular interest to those involved in the wind energy industry in Ireland and provides that: 

  • operational wind-farms (both firm and non-firm) will be turned down on an equal basis in a curtailment situation from 1 March 2013;
  • compensation payments for curtailment will cease on 1 January 2018; and
  • the TSOs and SEMO will be responsible for implementing this decision through the relevant market system, codes and dispatch system changes.

The SEMC also published the TSOs 'Definition of Curtailment and Constraint' setting out the methodology for distinguishing between events of constraint and curtailment.

Industry stakeholders had previously submitted that the level of compensation should be reduced in line with the progress of mitigation measures such as the DS3 Programme. They argued that this approach would provide more certainty for investors in that compensation would only be removed when the appropriate measures have been taken to reduce the risk associated with curtailment. The SEMC have stated that the DS3 Programme ‘is a key mechanism by which overall volumes of curtailment will be reduced’. However, linking the implementation of DS3 with compensation levels has been turned down by the SEMC who argue that this will do little to incentivise the TSOs to deliver DS3 in a faster or more effective timeframe and does not inform investors as to when compensation for curtailment would cease.

The decision to remove all compensation for curtailment by 2018 will be of concern to investors in the wind energy sector. It is therefore imperative that the correct infrastructure is established whereby situations which give rise to curtailment events are kept at a minimum, e.g. development of further interconnectors with the UK to allow for export, widescale improvements to the transmissions system and the development of a smart grid.

The full text of the SEMC’s decision can be viewed here.