The document summarizes changes to electricity charges and tariffs in Ireland that took effect on October 1st. Key points include: - Charges for operating and maintaining electricity infrastructure set by regulators saw a small reduction this year. - Typical residential users can expect reductions of 1.0-2.0% depending on their connection level and daily usage profile. - Wholesale electricity prices in Ireland continue to trade stably around 5.5c/kWh, benefiting from lower global gas prices compared to a year ago. - Installing variable speed drives on water pumps yielded estimated annual savings of €10,000 for an initial €15,000 investment.

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Outlook – October 2015
Every year ESB networks, Eirgrid and the Market Operator (SEM-O) agree with the energy regulator
the CER the charges and fees they get paid to operate and maintain the electricity infrastructure.
The charges changed on October 1st
and can be around 40% of your bill (it varies depending on your
set up.) We have seen increases in these charges in the past, but fortunately this year we will see a
small reduction.
The changes are summarised in the table below. The most significant change is in the capacity
charges (to the tune of about €60million). The numbers are published here in this heavy reading
document.
http://www.cer.ie/docs/000981/cer14428b%20DSOTariff%20Statement%202014-15.pdf
The reduction in your bill depends on a number of factors including what connection level (DG5,
DG5, DG7), your daily profile and your MIC settings (kVA). By way of a rough estimate, the typical
user (mid-point MIC level etc) should see the following reductions.
DG5 1.0-1.5% DG6 2.0% DG7 0.8-1.5%
Electricity at the power station gate is also lower, so expect year on year reductions, welcome news
for electricity users.

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Note that we have adjusted all of the numbers in the table above for transportation losses. (9%
during the day for Small and Medium users, 3.8% for Large users). This gives a truer picture of the
changes than the ones reported in the CER document above.
For members of our procurement group We should point out that these fixed charges do not have
any bearing on whether you should choose a fixed or a floating price contract as you pay the same
either way. The latter is still the way to go to ensure you get the lowest electricity prices.
Energy Markets Outlook
In keeping with our theme in this newsletter of sticking to floating price contracts energy prices
remain weak across the board. UK Gas has dropped to 40.5p/th with winter supply concerns
lessened by expectations of a Russia-Ukraine gas supply deal. Oil prices have continued to soften in
the face of rising stockpiles and Saudi Arabia rejecting calls for a summit of oil producing nations to
halt the slide in prices. Coal prices have fallen to a 10 year low.
The LNG glut supply story continues to shape our long term view on the market with three LNG
export projects on Canada's east coast going ahead with Europe set to be their main target market.
Australia continues to ramp up its giant Gladstone LNG facility and is projected to overtake Qatar as
the words biggest LNG exporter by 2020. Iran has also joined the party and is talking about the
possibility of exporting gas to Europe within the next year.
On a shorter timescale as we head into the winter months we like to keep an eye on the weather as
spells of cold weather tends to lead to (temporary) spikes in energy prices. There is a lot of talk
about El Nino disrupting global climate. Some claim El Nino was a big contributor to the big freeze
we saw in 2010 however other studies suggest a mild wet & windy weather this winter. Nobody

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knows for sure so we stand by our floating prices decision until we receive new information that
causes us to rethink.
Irish Wholesale Electricity Prices.
Irish prices are continuing to trade in a stable range, with prices at the power station gate averaging
to about 5.5c/kWh (an important metric for the procurement group). Note the light brown 2014 line
below at this time last year. The Ukraine Russian conflict was making headlines and it spiked the
price of gas which in turn affected the price of electricity. This year the gas supply situation is far
more benign, so we expect soft prices to continue.
Recent electricity price drops are not quite keeping up with gas price drops, if the ratio "spark gap"
between gas and electricity prices continues to grow, this will have a very positive impact on the
profitability of CHPs. CHP owners should determine they are optimizing the run hours of the unit to
take advantage of this.

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Currency Impacts
EURGBP has moved higher in its range as sterling has been weak against other currencies due to the
BOE (Bank of England) dithering on projected rate increases. Nevertheless the BOE is forecast to
raise interest rates early in 2016. If economic data out of the UK looks good in the coming months
accompanied by strong wage growth then we expect these interest rate increases to feed into a
stronger Sterling (against the Euro).

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Quick payback on variable speed drives
We are currently adding some variable speed drives to a water pumping circuit, and have been very
pleasantly surprised by the results, power on one pump has reduced from 18kW to 3kW, power on
the second pump from 15kW to 4.8KW and a third pump from 15kW to 2.5kW, pressure and
temperature readings on the Building Control System are showing sensible values and the system is
working well at the moment. We are expecting the system to operate better and book about
€10,000 savings per year for an initial investment of €15,000.
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.
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
mailto:<peter.brennan@SmartPower.ie> or direct dial at 01 482 4551 or my mobile 086 8402190.
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