1. www.rbsmarkets.com France, UK, Ireland Regional Initiative Stakeholders Meeting 3 rd December 2008 A Mutual Energy Company Working for Consumers Paddy Larkin Trading across the Moyle Interconnector

2. Moyle Interconnector (Financing) plc Moyle Governance A mutual company:- Set up to reduce cost of energy in Northern Ireland and bring energy infrastructure back into local ownership No shareholders All profits and savings are for long term benefit of NI customers 100% debt financed at a very low cost of finance Financiers have a major say in operation of business Cash is king and reserves to cover debt repayments must be held Stable, enabling regulatory regime is required A separate business – not a branch of DETI or NIAUR…or NIE Regulatory oversight enshrined in our licences

3. Moyle Interconnector (Financing) plc Corporate Structure Northern Ireland Gas Transmission Holdings Interconnector Services Ltd Moyle Interconnector Holdings Ltd Premier Transmission Holdings Limited Premier Transmission Financing plc Premier Transmission Limited Belfast Gas Transmission Holdings Limited Belfast Gas Transmission Financing plc Belfast Gas Transmission Limited Moyle Interconnector Financing plc Moyle Interconnector Ltd Moyle Energy Investments Ltd

4. Moyle Interconnector (Financing) plc The companies CompanyActivityMutuali sed BondTermRate real Moyle Interconnector 500 megawatt DC link Scotland to NI 2003£135m30year2.94% Premier Transmission Scotland to Northern Ireland gas pipeline 2005£107m25year2.46% Belfast Gas Transmission Phoenix transmission gas pipeline Islandmagee to Belfast 2008£109m40year2.21% Also Interconnector Services Limited (joint tendering for common services) Moyle Energy Investments Limited (Investment vehicle – e.g. EREF)

5. Moyle Interconnector (Financing) plc Moyle Distribution of Surplus Revenues back to Customers O&M Costs Bond Servicing Repairs and Maintenance Converter Station Rates SP Connection Charges Maintenance Management Insurance General Administration “Top-up” collected from all suppliers via NIE’s T&D charges Moyle Revenues based on regulatory framework Collection Agency Agreement with SONI Auction income from Capacity Holders CLG Costs

6. Moyle Interconnector (Financing) plc Moyle Vital Statistics Commercial Operations April 2002 Capacities –Technical 500MW each way –Commercial / available to users 450MW Scotland to NI winter 410MW Scotland to NI summer 80MW NI to Scotland Bipole (i.e. 2 x 250MW – unusual for full plant failure) HVDC (i.e. can force flows independent of voltages/ frequencies) Integrated Return Conductor (i.e. only 2 subsea cables instead of 4) Light triggered thyristor technology (i.e. more reliable than wired) Availability typically >99% (limited flow impact) but exposed to single circuit overhead line in Scotland Losses typically 2.2% (commercially set at 1.9%)

7. Moyle Interconnector (Financing) plc

8. Ballycronan More Converter Station

9. Moyle Interconnector (Financing) plc Direct-light-triggered Thyristors

10. Moyle Interconnector (Financing) plc Coylton - Auchencrosh 275kV Line

11. Moyle Interconnector (Financing) plc Moyle Capacity Allocations All commercial capacity auctioned (pay as bid) in 5MW blocks Allocation process approved by NIAUR (updated annually) –Maximum reserve price –Minimum quantities for various products –Auction and auction notification timing boundaries 1,2 and 3 year standard products (normally Oct – Sep) Monthly standard product Monthly non-standard product Standard product carries a standard reserve price (currently £2078/MW/month) and no restriction on usage Non standard product carries a reduced equivalent reserve price (has been as low as £100/MW/month) and usage over a certain level attracts a further charge (typically over 30% utilisation factor)

12. Moyle Interconnector (Financing) plc Moyle Auction process All auctions carried out by SONI as Moyle’s agent and overseen by NIAUR Invitation to bid issued in advance (approx 1 month for long term and 1 week for monthly) – available on SONI website – www.soni.ltd.uk No need to register to bid – but bidders must be eligible for bids to be accepted (entered into MICFA – Moyle Interconnector capacity Framework Agreement ) Typically 3 auctions for longer term capacity aligned with directed and non directed auction process and customer contracting timetable Monthly capacity typically auctioned 5 days in advance Sealed bid manual auction format Unsold monthly capacity may be sold bi-laterally within month Intention to move to more granularity but will require automated auction system Add on border to system being developed for IFA appears best option (standardisation, linking of auctions, Betta compliant) – interested in views

13. Moyle Interconnector (Financing) plc

16. If it is commercially viable to flow from GB to SEM in a particular hour why does the interconnector not fill up in that period?

17. Moyle Interconnector (Financing) plc Existing Moyle Users Bord Gáis Éireann ESB Independent Energy Scottish and Southern Energy Scottish Power SONI (System Operator Northern Ireland) Viridian

18. Moyle Interconnector (Financing) plc Trading across Moyle - General Must be registered in SEM and BETTA to use the capacity SONI will (if desired) submit PN’s to BETTA Moyle requires 3 months credit cover for capacity sales No TNUoS on interconnector flows in SEM Betta TNUoS passed through to capacity holders (fixed monthly for generation; estimated demand TNUoS on capacity held during Triad months – reconciled later) Capacity holdings and final nominations entered on MITS (Moyle interconnector trading sytem) – part of SEM systems IU’s allowed 10 PQ bids for each half hour period at 10:00 D-1 Accepted bids are modified to take account of interconnector deadband (+/- 15MW) and ramping (10MW/min) before final nominations are determined Final nominations are only revised if Moyle availability changes All quantities quoted at Scotland side of the interconnector

19. Moyle Interconnector (Financing) plc Potential barriers to trade Risk appetite of Interconnector users Uncertainty of SMP D-1 Lack of liquidity in Betta Lack of half hourly pricing in Betta at D-1 TNUoS / BSUoS uncertainty Capacity payment uncertainty Cost of interconnector capacity Competition/ lack of arbitrage traders Manual auction system/ lack of granularity

20. Moyle Interconnector (Financing) plc Further information available on: www.nienergyholdings.comwww.soni.ltd.uk

21. Moyle Interconnector (Financing) plc Questions?