Background T&SC V9.0: The Market Operator shall not grant the status of Under Test for the purposes of this Code to Autonomous Generator Units, Pumped Storage Units, Demand Side Units, Interconnector Units or Interconnector Residual Capacity Units. Costs to the system will arise when a generator is testing, particularly during the commissioning phase. – Running additional generation – Increased risk of trips etc. – Increased Reserve If a generator is not Under Test, these costs increase Dispatch Balancing Costs and are recovered through the Imperfections Charge, levied across all suppliers.

Background Two modifications raised to date: – Mod 10_11: Interconnector Under Test Recommended for Approval – Mod 14_11: Pumped Storage Under Test Deferred Ongoing work to determine testing requirements for Demand Side Units.

Pumped Storage Testing Tariffs Consultation: 3 responses from 6 explicitly agreed with the proposal that Pumped Storage Units should be subject to Testing tariffs –Energia concurs with the view that the asset owners of interconnectors, including the future East West Interconnector, and pumped storage units should pay appropriate testing charges and we would urge the regulatory authorities and SEMO to ensure this is possible through expeditious modifications, as necessary, to the trading and settlement code and central market systems. – With regards to inclusion of generator types in the testing regime, IWEA believes that both interconnectors, including the proposed 500MW East West Interconnector, and pumped storage units should be liable to pay testing charges. During testing, these generators will have an impact on market imperfections and therefore the cost should be borne by the asset owners. Therefore IWEA believes that the market Modifications Mod_10_11 and Mod_14_11 should be approved and implemented to facilitate this. –BG Energy believes that pumped storage units and interconnector units should be included in this testing tariff, especially during their commissioning phase. ………….As per the general principle of correctly allocating costs, these testing costs should be borne by the asset owners and not socialised across the market. Therefore the implementation of modifications Mod_10_11 and Mod_14_11 should be expedited to make it possible to charge these units the appropriate tariff when they are testing.

Pumped Storage: Current status 1 pumped storage station at present – 292 MW: 4 x 73 MW 1 pumped storage station: Signed connection agreement – 70 MW 10 further pumped storage stations in the application process – Total capacity: 2443 MW – Largest: 418 MW

Pumped Storage: Costs of commissioning Costs to the system of commissioning: – Dependent on a number of factors including unit size, fuel prices and system conditions (demand, generator availability etc) – Estimated possible costs 50 MW unit (Generation testing only): 100k - 200k 100 MW unit (Generation testing only): 200k - 400k – Calculation of the cost of testing pumping component would require further studies

Conclusion Facilitate Code objective ensuring no undue discrimination between persons who are parties to the Code Consultation on the Testing Tariffs: Received support for proposal Lead time for SEM changes – Important to address now rather than delay – Required for future Pumped Storage connections