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Anaerobic Digestion of farm and food processing residues GoodPractice Guidelines Page50 Appendix 6 Electricity connection The majority of schemes will require an electricity connection to the local electricity distribution network to provide energy to operate ancillary equipment and other site loads during maintenance and shut-down periods, unless stand-by generation equipment is also installed. If the gas produced by the AD plant is to be used to generate electricity then the operator will have a number of trading options depending on the size and location of the generator and who consumes or buys the electricity. These include: • Consumption by the operator for own on-site business • Sale as an on-site generator, that is, sale to a single customer or a qualifying group of customers related through common ownership on the same site • Sale to the local Regional Electricity Company (REC) • Sale via the Non-Fossil Fuel Obligation • Sale through the electricity supply pool • Sale to a second tier supplier through the Non-Pooled Generation Scheme • Sale direct to own customer(s) • New outlets which may emerge following deregulation of the energy market. Each of these options will raise technical, planning, regulatory, commercial and contractual issues; some of the options involve mandatory licensing arrangements with cost implications and some will involve commercial risks. The risks and benefits need to be appraised and understood by the prospective developer to improve the negotiating position and to maximise the value of the energy generated. This appendix provides an introduction to the issues; more detailed information is available in Electricity Production Connected to the Local Network - A Guide, published by the Association of Electricity Producers. The final option(s) chosen will determine the nature of the agreements and contracts and licences entered into by the developer and the equipment that will form part of the installation. These may include: • A connection agreement with the local REC determining the connection cost, import and export capacity, and any operational restrictions which may be applicable. • An agreement with the local REC or other second tier supplier (post 1998) to supply electricity for standby and top-up purposes, either for on-site use or by contracted customers. • A meter connection agreement with a licensed meter operator to measure and record the half- hourly import and export of electricity by the generator and/or contracted customers. • Purchase contract(s) with the local REC, second tier suppliers, NFPA (for NFFO contracts) or contracted customers for electricity supplied and/or for spill export when surplus to agreed declared generation capacity. • Interlocks on stand-by generators and contractual agreements to restrict the use of fossil fuels if the electricity is sold via a NFFO purchase contract. • Arrangements with the local REC or other second tier supplier for the benefits accruing from reduction in triad peak capacity charges and other embedded generation benefits. • A generator’s licence if exporting more than 50MW to anyone other than a single on-site customer (or exporting more than 10MW from a plant with an overall capacity greater than 100MW). • A DUoS agreement with the local REC to pay the tariff charges for use of their distribution system where the generator is also operating as a second tier supplier and selling the electricity generated to contracted customers (DUoS refers to charges to be paid to the local REC for use of their distribution system to export electricity to other users or suppliers). • A second tier suppliers licence if exporting more than 500kW to anyone other than the pool or a licensed supplier. • If gas leaves the plant, an OFGAS license will be required because the operator is then classified as a gas producer. • Electricity Pool membership to cover fees applicable to generator registration, data collection and settlement reconciliation for electricity generated and consumed by contracted parties. Even if a generator is not required to have a licence, they may still apply for Pool membership on a voluntary basis, although this would not normally be beneficial to a generator with output capacity lower than 30MW. An electricity connection to the local electricity distribution network will be required for any electricity exported, even if this is only during periods of spill when the output of the generator is greater than demand on-site or by its own contracted customers. It is therefore advisable to establish a dialogue with the local REC at the earliest opportunity to appraise the various options, and to determine the relative terms and conditions for connection.PDF Image | Anaerobic Digestion Of farm and food Processing residues The development of a sustainable industry
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