Combined heat and power (CHP) operators will be subject to the same restrictions as conventional electricity operators in supplying the market, the Oireachtas committee on electricity deregulation decided yesterday.
The decision, which will form part of the electricity deregulation act, will come as a major disappointment to property company Treasury Holdings, the group behind the National Conference Centre project, which planned to build a series of CHP plants around Dublin.
The committee, which met for its final session before the deregulation bill goes to report stage, voted in favour of an amendment tabled by the Minister for Public Enterprise, Ms O'Rourke, which restricts licences "to supply electricity to eligible customers". It replaces an earlier amendment which would have opened up the market to CHP operators.
Ms O'Rourke said the terms of complying with the EU directive had been agreed by the previous government. These envisaged 28 per cent of the market being deregulated in the first stage. Nothing had been heard from CHP operators until recently. Representatives from Aughinish Alumina had visited her department saying they favoured the original amendment because it gave unrestricted market access.
It is understood the Co Limerick alumina producing company, which is under new management, wishes to develop a CHP plant.
"We have got to get back to the first principle which is the directive. And the first part of that is the appointment of a regulator to oversee the 28 per cent principle decided on formally by the previous government," she said.
The amendment was opposed by Mr Ivan Yates, the Fine Gael spokesman on public enterprise, who said that the ESB had a big role in re-writing the section and that it was too "defensive". The ESB would be the only company able to produce top-ups. "It allows the ESB to develop CHP but nobody else," he said.
Ms O'Rourke said legislation would permit CHP operators to purchase additional electricity or dispose of excess to other operators at special rates. She added that the legislation was designed for bona fide CHPs. There were companies "masquerading as CHP operators" for other purposes.
It appears likely that at report stage, it will be decided that operators using renewable energy sources will have access to 100 per cent of the market although individual sectors within the grouping, which includes wind and solar operators, may receive preferential treatment.
It also appears that the regulator, Mr Tom Reeves, will decide on the price at which excess electricity, or `spill', will be sold before being passed on to final customers, although whether and how `spill' is to be regulated has to be decided.
