Mr. Jim Gannon:

I am happy to start and I will pass to my colleague, Mr Melvin, after that. We had record levels of wind over the past couple of weeks, which was a highlight, given last year was one of the lowest wind years on record, or at least on recent record. As an example, the record was in excess 4,500 MW of wind at a point in time. In September, we had a day where there was less than 40 MW online, which is approximately 1% of that record. It is true that we will drive for and obtain the national target of 80% by 2030 but when the wind does not blow on a relatively small island, the wind really does not blow, which means we need that back-up capacity. The question then turns to what other facilities are required to ensure we have capacity.

It is important to recognise that we have interconnection to the UK. That interconnection will be further supported by interconnection to both the UK and France, presuming the greenlink and Celtic interconnectors go ahead. That will allow us to draw from those jurisdictions when we have a deficit of capacity in our own right. It will also allow us to export to those jurisdictions to make sure that when we have an excess of wind capacity, we can gain economic benefit from that and not require wind turbines to stop turning or exporting electricity to the grid.

In terms of how we reward the system for that gas-fired generation, the gas-fired generators would be rewarded through, in the first instance, the energy they produce at a point in time. That is the energy revenue they would get. Some gas plant and other technologies, for example, battery storage or synchronous condensers, assess the power quality and react to certain things on the system. When power quality or security of supply are challenged, we employ systems services. This suite of systems services can be provided by different types of plants, including conventional plant and gas plant. It keeps the power quality at a level where it does not trip switches or substations and, therefore, stabilises the grid, particularly when wind is coming on and going off.

There is the energy revenue. If I burn gas, I produce 1 kWh of electricity. There is the systems services revenue, which again would be provided at a point in time. Importantly, there is also capacity revenue. This is the capacity mechanism where we hold an auction for a certain volume of capacity and developers bid against one another to determine how much they will get paid to be there when we need them. This is different from actual burning from actual services they provide on an ongoing basis. This is for us to know that when we switch the light on at the wall, it will turn on. It is not the amount of electricity we actually use while the light is on. We expect that capacity payment, in particular, to rise over time because in practice, when these gas plants are in place, it is likely that as we increase renewables on the system, they will produce less electricity. As one of the their revenue streams, one of the three legs on the stool, goes down, one of the others will have to go up. That capacity contract which provides those developers with revenue to be there when we need them is most important because as we bring more renewables onto the system, the energy element is likely to tail off, over time.

Some others, out of interest, are considering the role of hydrogen in some of these gas plants but that is the developer's business for now.