Isle of Man Department of Economic Development. Energy Island Isle of Man Dr Ken Milne, Senior Manager for Energy Policy

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2 Isle of Man Department of Economic Development Energy Island Isle of Man Dr Ken Milne, Senior Manager for Energy Policy 23 rd May 2012

3 Isle of Man Part of British Isles Crown Dependency Queen head of State Own parliament with powers for legislation and tax Not part of EU however, free movement of goods with EU Over 30 tax information exchange agreements in place 3

4 The Isle of Man Solutions for European Import and Export Management Key Location

5 Isle of Man Territorial Seas 5

6 Manx Electricity Authority (MEA) Legally: A Statutory Board of the Isle of Man Government Charged with: Providing the people of the Isle of Man with a safe, reliable and economic electricity supply Governed by: Isle of Man Electricity Act 1996 (as amended)

7 IOM Electrical Supply Chain Generation Transmission Distribution UK Hundreds of privately owned Power Stations National Grid 400kV system 14 Private DNOs ~132kV system IOM MEA own and operate c95% of generation capacity MEA 33kV system & 90kV interconnector MEA 11kV system Supply ~20 private suppliers MEA Sole supplier by statute Regulation Ofgem NA

8 Manx Electricity Authority (MEA) MEA already accommodates private & renewable generation: Power Purchase Agreement for EfW output (Sita IOM) Private generation tariffs with existing customers using CHP and micro wind turbines Could offer connections and agreements to marine technology developers 8

9 Existing Infrastructure and Assets

10 MW Supply minutes lost per Customer per year Capacity, Stability and Security IOM Electricity Demand vs Capacity 80 Customer Minutes Lost Other Generation Capacity (Hydro + EfW + Diesel) 85MW CCGT Capacity 80MW Winter Demand Summer Demand UK Average 08/09 MEA 2007/08 MEA 2008/09 MEA 2009/10 10

11 The Isle of Man Solutions for European Import and Export Management Isle of Man Energy Policy Maintain the security of energy supply Secure the efficient use of affordable energy Minimise the impact of our energy use on the environment 15% electricity generated from Renewable sources by 2015.

12 The All Islands Approach Ministers from the British Isles, Ireland, The Channel Islands and the Isle of Man today signed up to a historic deal to cooperate on exploiting the major wind and marine resource in and around the islands. Charles Hendry, UK Minister of State for Energy said: "There is a massive potential source of clean, green, secure energy that remains untapped in the Irish Sea and onshore in Ireland, as well as around the Channel Islands. Optimising the natural renewable resource available around our islands would benefit us all. It makes much more sense to develop and share clean, green, secure energy with our neighbours than import vast amounts of fossil fuels from far flung parts of the world. In practice, more interconnection between the Islands would mean that on, for instance, a very windy day in mainland Britain, surplus power could be sold to Ireland and mainland Europe, as well as enabling imports of electricity from Ireland and mainland Europe when required. DECC Press Notice 2011/050

13 UK Electricity Market Reform The EU Renewable Energy Directive (2009/28/EC) allows for flexibility mechanisms including "joint projects" (articles 7-10) which can occur between a Member State and a third country (including Crown Dependencies), if an equivalent amount of electricity produced is imported into the EU. Chapter 9 of the white paper for EMR considered the trading of renewable energy using the flexibility mechanisms in the EU Directive. The legislation process for the "key elements" of EMR should start during Future Energy work programme of the British Irish Council : 13

14 ISLES The Isle of Man Project Solutions for European Import and Export Management ISLES is a collaborative project between the Scottish Government, the Northern Ireland Executive and the Government of Ireland. Funded mainly by the EU's INTERREG IVA Programme It assessed the feasibility of creating an offshore interconnected transmission network and subsea electricity grid based on renewable energy sources off the coast of western Scotland and in the Irish Sea/North Channel area Opportunity for the Isle of Man to be part of an offshore interconnected transmission network and subsea electricity grid in the Irish Sea.

15 North Seas Countries Offshore Grid Initiative (NSCOGI) Coordination in the way links to offshore wind farms are developed could reduce the cost of offshore connections by between 0.5 and 3.5 billion. Preparatory investment in anticipation that more generators will connect could be allowed - as long as Ofgem is satisfied that customer interests are protected. An opportunity for the Isle of Man to provide a central hub in the Irish Sea which would reduce transmission costs and number of grid connections in the UK DECC Press release 2012/017 15

16 Benefits for Businesses Excellent location to trial new technology IP protection Precision manufacturing Natural resources Well regulated international finance centre offering quick and easy establishment of new businesses Isle of Man Business Incubator Business-friendly, accessible Government State of the art power generation (EfW, CCGT), IT and communications infrastructure Low tax jurisdiction (0% corporate tax, 0% capital gains tax, 10% lower rate/20% top rate of personal income tax capped at a maximum of 115,000) Double tax agreements & Tax Information Exchange Agreements Isle of Man Government grant funding

17 Opportunities in the Isle of Man Lease seabed to generate renewable energy allowing the Isle of Man to become a major net exporter assisting neighbouring jurisdictions to meet National & EU targets Interconnector hub in the central Irish Sea region connecting offshore projects to the GB electricity grid network Operation & Maintenance bases in the Isle of Man harbours for close proximity offshore projects ken.milne@gov.im

18 Energy Islands Being surrounded by water creates significant opportunities to develop offshore wind and marine renewable energy. Opportunity to change from being a major importer to become major exporter of energy.

19 Thank you Any questions? Photo: J. Cubbon