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February/March 2014 • www.esb.ie/em
Generation & Wholesale Markets
An insight into G&WM
As we move into a new year, EM talks with Paddy Hayes, Executive Director, Generation & Wholesale Markets, about the purpose, structure and key activities of this business unit.
Q Paddy, what's the core purpose of G&WM?
A In G&WM, our core purpose traces right back to the building of Ardnacrusha and the creation of ESB in 1927. Our core purpose today is providing a reliable supply of electricity for our customers, for the economy and for the future - and doing that in a safe, cost-effective and sustainable way.
Q How is the business organised “to achieve this?
A We've established a simple business model, working on three specific activities:
- Developing new generation assets (Asset Development);
- Generating electricity from those assets (Generation); and
- Trading that electricity and the as sociated commodities (Trading). These business lines are supported by our Human Resources, Finance and Strategy & Regulation teams.
It seems to make sense to have a connection between these parts of the business. In the longer term, we'd like to get agreement from the Regulators to remove the ring-fence between Generation/Trading and Electric Ireland. I think a future connection between Generation, Trading and Supply would allow us to operate more effectively and to better manage risk for both ourselves and our customers.
Q What are the long-term priorities for G&WM?
A Firstly, safety and making sure nobody gets hurt in our business or by our business - this sits ahead of everything else.
Secondly, people - everything in G&WM depends on our staff, who have made a huge contribution to the business over many years. I particularly want to acknowledge the impact in 2013 of the significant reductions in staff numbers and the personal impact of pay reductions as part of addressing the competitive cost base of the business.
Q Do you have any other stakeholders?
A We have many stakeholders but the local communities in which our generation activities are located is a stakeholder worth focusing on. Staff in our generation plants have always taken huge pride in being a good neighbour and making a positive contribution to the local community. Our footprint is getting broader, particularly now that we have almost 400MW of wind farms in commercial operation, and a lot of effort goes into community engagement.
Something that many people don't see or appreciate is the huge work that's done in Fisheries/Conservation, managing fish stocks and improving many habitats and many miles of river bank every year.
Q Who are G&WM's customers?
A Our customers are really important to us in G&WM but sometimes I feel that because of the ring-fence from Electric Ireland we don't see this as clearly as we might.
I see all electricity users in the SEM as G&WM's customers. We might not have a direct contract with them but we sell electricity to all the SEM supply companies. Electric Ireland and the other supply companies themselves are also our customers. We don't just sell them electricity but also products that allow them to better manage risk on behalf of their customers.
The Grid companies in ROI, NI and GB are also key customers and are all dependent on us for system services.
And, until recently, in Marchwood and still in Amorebieta, our biggest customers of all have been our tolling counterparties in Southampton and Spain, namely SSE and Shell.
Q What are your key priorities for ‘2014?
A Our key priorities are sum-Lmarised in the 2014 business plan, which is available to everyone in G&WM. However, if I were to pick the top five, I would say:
- Safety;
- People;
- Operating Performance;
- Construction of Carrington and Woodhouse;
- The trading and commercialisation of Carrington.
It will be a challenging year but I'm optimistic that it will be a positive one in ESB Generation & Wholesale Markets.
Contents »
Asset Management Conference
In December, the G&WM Asset Management team held its yearly conference, which was organised and led by Orla Newman, Asset Management Specialist.
Constructing Carrington
John O'Connor, Carrington Programme Director, takes time out to speak with EM about how the exciting new electricity generation project being developed near Manchester is progressing.
ESB Trading Sing for Simon
A group from ESB Trading headed to Grafton Street on Thursday December 19th for the annual Sing for Simon carol singing event.
OUR THREE MAJOR OBJECTIVES:
1 Grow the business We have a growth mandate from ESB. .It's a big and exciting challenge and we aim to have about 7000MW of generation capacity by 2025. The requirement for the sale of state assets means we start this journey by taking a step backwards but we have great construction projects under way in Carrington and Woodhouse at the moment. This growth strategy, combined with our strategic resourcing plan, presents significant opportunities to employ future generations of people in the years to come, which will be an important legacy for us.
2 Build a balanced, low-carbon generation portfolio within the all-islands market With increasing interconnection and the GB and SEM systems coming together, we have to see the All-Islands as our home market. As we grow the portfolio, we want to reduce the carbon intensity of our generation by increasing the proportion of renewables. We started from zero carbon with Ardnacrusha and we've made huge progress on reducing carbon intensity over recent years but we have a long way to go.
3 Continue to improve performance - To grow we need investment so we need to continue to demonstrate that generation and trading is a good investment. This means building great new assets, ensuring excellent asset management and plant performance from our existing stations, a competitive cost base throughout the business and sound commercial and trading decisions.
