The document provides information on new initiatives from SmartPower to help procurement group members improve energy management. More detailed energy and currency market reports will be provided free of charge. SmartPower will also install sub-meters free of charge to provide data on energy usage. This allows clients to schedule operations for lowest cost times. SmartPower also offers assistance with claiming energy efficiency grants and managing carbon tax rebates. The outlook notes stable Irish electricity prices and low expected gas prices this winter.

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Outlook – November 2015
For this month’s edition of the newsletter I want to talk about a number of new initiatives we at
SmartPower are rolling out to help procurement group members move their energy management to
the next level.
More detailed reports on trends in the energy market and the currency market will be provided free
of charge to Procurement group members. The currency market in particular will be a hot topic next
year as a referendum on whether the United Kingdom should remain a member of or leave the
European Union (EU) is planned to take place before the end of 2017. This has major implications for
most businesses in Ireland including energy costs.
Installation of Sub-Metering
For procurement group members, SmartPower will install sub meters free of charge which has the
benefit of providing information that can be used to effect operations. One of the reasons
SmartPower can provide this solution at NO COST to group members who qualify is that we have
written our own proprietary software.
The vast majority of clients in the Procurement group are on pass through tariffs that change every
half hour (as this is the cheapest way of buying your electricity with prices very similar to those paid

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at the power station gate). One example of an application where this is useful is that it allows clients
to move the most energy demanding operations to the most favourable time of day.
The analytic data from sub meters makes it much easier for clients to support energy credit claims
for energy efficiency projects. Currently about 5c per kWh of energy saved is available as a one off
grant for energy efficiency projects. We regularly come across businesses who do not claim these
credits and uncertainty about the amount of energy saved is often a factor in not securing the grant.
Procurement Group members also have the advantage of SmartPower on board as a consultant for
independent advice on energy efficiency projects upfront.
Note: The free sub metering solution is subject to minimum load requirements (above 4GW per
annum) and other criteria. We are rolling this out starting with our longer standing clients first. If
your load is too small to justify the expense but you are a member of the group and want this
solution, we will ask for a contribution towards the cost of the meters.
Carbon Tax Rebate Management
Over the past year, quite a few clients have had their CHP unit certified by SmartPower as a HE CHP
and are in a position to reclaim their carbon tax rebate on natural gas used by their CHP unit.
However, reviewing their experiences some clients have run into issues such as not taking the
required monthly readings and failing to submit Revenue forms in a timely manner with correct
parameters/units etc. This has resulted in push back from Revenue. To help clients overcome some
of these hurdles we now offer an automated solution (with a new meter fitted to your CHP that
uploads the required data to our database) and we will fill out the reclaim forms on the clients
behalf.
To help smooth the process we are hosting a training session with the CER (Commission for energy
regulation -the approval body), their consultant Mott McDonald (who reviews applications), and the
Revenue inspectors so that everybody is on the same page with regard to minimum efficiency
criteria, required metering and record keeping.
Irish Energy Outlook
Bear in mind as we head into winter we often see a pop in natural gas prices. However as the
weather has been so mild recently, gas prices have in fact weakened with month ahead December
gas prices dipping below 40 p/th with plenty of supply and strong LNG inflows reported. UK storage
is at 95 per cent fullness.

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One of the reasons we remain comfortable with staying on floating gas rates is the price differentials
we see around the world. Whenever you have price differentials, markets work to close the gap. To
illustrate this I pulled some gas price data from Quandl and compared Russian gas prices imported
into Europe with those in the USA. European gas prices are close to $6/MMBtu whereas US gas
prices are still much cheaper below $3/MMBtu (thanks largely to fracking in the US). There are
technical barriers to eroding this gap but it is the primary reason a lot of new LNG supply is pointed
at Europe.

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This is an interesting graph from www.ferc.gov showing current LNG landed prices around the
world.

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Irish Wholesale Electricity Prices.
Irish electricity prices continue to trade in a v stable range this year (red line below) with none of the
price volatility visited upon us (2014 line) by the Russian/Ukraine conflict this time last year. These
developments spooked the market at that time causing a surge in gas prices but the effect was short
lived as plentiful supply brought prices back down to earth. SMP prices at the power station gate are
averaging around 5.5c/kWh - an important metric for the procurement group. Looking at the graphs,
gas could be in for record low winter prices. At the same time, we remain wary of upside surprises.
The "Spark Gap" or the ratio between gas and electricity prices continues to favour CHP operations.

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Currency Impacts
EURGBP has been in decline for the past several years but hit a bottom late August this year below
0.700 and then rallied from there into its current range. In the coming months we are facing a lot of
uncertainty in this currency pair as concern about the possibility of a referendum on the UK
membership of the EU (June 2016 has been mentioned as a possible date) is likely to increase
volatility in Sterling. In the longer term there is strong support in the 0.6535/7250 region. How
EURGBP behaves in this zone (ie does it rebound from there or just fall through with no interest
from buyers) will give us an important clue as the long term direction of the currency. From time to
time, we will issue a special report to Procurement group members on these developments.
About SmartPower
Our range of activities include;
Review current contracts to make sure your business is tied into the lowest cost connection level
agreement.
Making comparisons between tracker and fixed electricity tariffs more transparent, so better
procurement decisions are made.
Providing daily/hour gas price updates on the forward markets, so that gas & electricity prices can be
hedged forward at competitive rates.
Scheduling load to use lowest priced times and switch off non-critical load during high cost periods.

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Allowing a (non-critical) portion of the electricity profile to be switched off or an on-site generator
started remotely by the National Grid (via an aggregator known as a Demand Side Unit) allowing you
to receive capacity payments in compensation. This is also applicable to sites with a Diesel
Generator.
Providing an independent expert review and paybacks of energy saving capital projects, including
wind turbines, led lighting retrofits and solar photovoltaic panels.
For CHP owners, access market information to optimise run hours so that power is imported
(purchased) when the import cost is lower than the running costs of the generator, and if there is an
export potential, then better returns can be invariably be obtained using a time of day tariff model.
See www.smartpower.ie for more details. If you have any questions please contact me at
peter.brennan@SmartPower.ie or direct dial at 01 482 4551 or my mobile 086 8402190. Naturally,
please feel free to forward on the newsletter (in full – without editing) to anybody who has an
interest. Sign-up is also free on our website (We only look for the email address where we need to
send the newsletter).
This newsletter contains proprietary material and is subject to copyright.