Foundation · Operating Charges

What Are The Operating Charges?

D-TUoS charges are EUR 3,115k/yr — 41.1% of gross revenue. Without reform, base-case IRR is negative (-3.5%). Recommendation: DO NOT INVEST — WAIT for D-TUoS reform.

DO NOT INVEST — WAIT for D-TUoS reform (base IRR = -3.5%)
D-TUoS Charges
3,115 k/yr
D-TUoS as % Revenue
41.1% of gross
Base-Case IRR
-3.5% NEGATIVE
Reform Probability
20-30%
How was this page built?
1
Regulatory Document Review
Every charge traced to its regulatory source: CRU decision papers for D-TUoS tariffs, SEMO settlement statements for market charges, EirGrid ancillary service rates.
2
Tariff Calculation
D-TUoS computed using CRU's published maximum import capacity (MIC) charges for the relevant voltage level (110 kV). Applied the actual published tariff of EUR 59.40/kVA/yr to a 50 MW import capacity.
3
Reform Analysis
Modeled the impact of CRU's planned D-TUoS reform (removing generation-follows-load charging for storage). Based on CRU consultation papers CRU/2023/06 and EirGrid's Shaping Our Electricity Future.
4
IRR Impact
Fed the fee reduction through the 20-year DCF model to quantify the +14.3pp IRR uplift (from -3.5% to 10.8%).
Limitations: The D-TUoS reform timeline is uncertain (CRU has not committed to a date). The tariff level itself changes annually. Our model assumes the reform happens by 2027 — delay risk is real.
Nerd level:
01 The D-TUoS Dominance Where every euro goes
Annual Fee Breakdown EUR thousands, 50 MW / 200 MWh at 0.85 cycles/day
C1 — Published tariff rates (EirGrid 2025/26) C3 — Peak/off-peak blend assumption (80/20)

Source: EirGrid Statement of Charges 2025/26, SEMO tariff schedule. All D-TUoS charges confirmed at published rates. Market fees are negligible relative to D-TUoS.

D-TUoS = 41.1% of gross revenue — the dominant cost

Total D-TUoS charges of EUR 3,115k/yr consume 41.1% of gross revenue (EUR 7.5M/yr). D-TUoS alone exceeds combined arbitrage + balancing revenue. The System Services component (EUR 1,909k/yr) is levied on every MWh of electricity imported from the grid — meaning a BESS pays EUR 27.00/MWh on the full charging volume (73,000 MWh/yr), even though 85% of that energy is re-exported. Combined with Network Capacity charges (EUR 1,206k/yr), D-TUoS makes the project unviable without reform. To achieve the 8% hurdle rate without reform, the wholesale spread must exceed EUR 90/MWh — well above projected levels.

02 The Real Spread What a trade actually looks like after fees · drag sliders to explore
Trade Waterfall — Per MWh Exported Sell price minus all costs = net margin
EUR 20EUR 150
EUR 80EUR 350
75
Gross spread (EUR/MWh)
9
Net margin (current)
40
Net margin (with reform)

Fees are asymmetric: all charges apply to the buy side (imports); the sell side has no fees (G-TUoS exempt since Oct 2020). D-TUoS charges are levied on imported MWh. With 85% round-trip efficiency, you import 1.176 MWh for every 1 MWh exported, amplifying all import-side charges by 17.6%. Default prices: EUR 86 (2025 avg at 03:00) and EUR 161 (2025 avg at 18:00) from Market Data. These are annual-average profile prices; on any given day the actual cheapest and dearest hours vary and the spread may be wider. See Spread Anatomy for why daily spreads average 30–40% above profile spreads. D-TUoS Network Capacity charge (EUR 19.44/MWh) is a fixed cost allocated pro-rata; it applies regardless of trading volume.

03 Error Correction Model audit finding

D-TUoS Calculation Error Identified & Corrected

An independent verification of the fee model uncovered a systematic error in how the D-TUoS System Services Charge was applied. The charge is levied on imported volume (metered consumption), not exported volume.

EUR 3.1M
Previous model (incorrect)
Applied System Services Charge to exports (62,050 MWh)
EUR 3,115k
Corrected model
Network Capacity EUR 1,206k + System Services EUR 1,909k = EUR 3,115k/yr (41.1% of revenue)
~5-6pp
IRR overstatement
Original IRR of 11.4% was inflated by ~5-6pp; corrected base-case IRR is negative (-3.5%)
Root cause: "D-TUoS System Services Charge applies to imported volume, not exported." The EirGrid Statement of Charges 2025/26 states: "System Services Charge shall be payable in respect of all Units of electricity supplied through the Distribution System" — i.e., metered consumption (import). For a BESS with 85% round-trip efficiency, import volume = export / 0.85, amplifying the charge by a factor of 1/RTE (1.176x).
04 Before vs After Reform The EUR 1.97M/yr question
Current Regime
EUR 3,115k/yr
41.1% of gross revenue (EUR 7.5M/yr)
D-TUoS charges: Network Capacity EUR 1,206k + System Services EUR 1,909k
System Svc
60.1%
Capacity
37.9%
Market
With Reform
EUR 1,206k/yr
16.1% of gross revenue (down from 41.1%)
System Services Charge exempted (ESI/ECA recommendation)
System Svc
Capacity
95.0%
Market
5.0%
Side-by-Side Comparison Stacked bar: current regime vs reform scenario
C1 — Current charges verified from EirGrid 2025/26 C3 — Reform scenario per ESI/ECA Mar 2025 recommendation
EUR 1,909k
Annual saving from reform
System Services Charge (EUR 1,909k/yr) eliminated entirely
+14.3pp IRR
IRR uplift (Year 1 reform)
From -3.5% (base) to 10.8% (with reform from day one)
61%
Reduction in D-TUoS charges
EUR 3,115k to EUR 1,206k (Network Capacity only)
05 Fee Calculation Detail Every charge, fully sourced
System Parameters
50 MW
Rated power
200 MWh
Rated energy (4h duration)
0.85
Cycles per day
85%
Round-trip efficiency (AC-AC)
62,050
MWh exported per year
200 MWh x 0.85 cycles x 365 days
73,000
MWh imported per year
62,050 / 0.85 RTE = 73,000 MWh
Complete Charge Schedule
Charge Published Rate Applied To Annual Cost EUR/MWh exp. Conf.
D-TUoS System Services EUR 26.15/MWh (blended) Import (73,000 MWh) EUR 1,909,000 30.77 C1
D-TUoS Network Capacity EUR 2,009.70/MW/month Capacity (50 MW x 12 mo) EUR 1,206,000 19.44 C1
D-TUoS SUBTOTAL EUR 3,115,000 50.20
SEMO Market Operator EUR 0.61/MWh Import (73,000 MWh) EUR 44,530 0.72 C1
SEMOpx Exchange Fee EUR 0.12/MWh Import (73,000 MWh) EUR 8,760 0.14 C1
SEMO Participation Fee EUR 2,610/year Fixed annual EUR 2,610 0.04 C1
PSO Levy ~EUR 168/MW/yr House load only (~50 kW) EUR 8,400 0.14 C1
TOTAL EUR 3,179,300 51.24
D-TUoS charges = 41.1% of gross revenue (EUR 7.5M/yr). D-TUoS alone exceeds combined arbitrage + balancing revenue.

Rates: EirGrid Statement of Charges 2025/26 (DTS-T tariff); SEMO tariff schedule 2025/26. D-TUoS System Services blended rate: EUR 26.15/MWh. D-TUoS total = EUR 3,115k/yr (Network Capacity EUR 1,206k + System Services EUR 1,909k) = 41.1% of gross revenue. G-TUoS: exempt for ESS since Oct 2020 (CRU decision). Network Imperfections Charge (EUR 19.93/MWh) excluded — applicability to BESS unresolved (C5).

06 Reform Status & Timeline Where things stand, Feb 2026

No CRU decision paper exists. Reform is NOT the base case.

Despite strong industry lobbying and an explicit recommendation from ESI/ECA (March 2025), the CRU has not published any decision paper on D-TUoS reform for energy storage. The 2025/26 tariff year proceeded without ESS-specific reform. CRU's recent focus has been on Large Energy Users Connection Policy (data centres), not storage tariff reform. D-TUoS reform remains in early-stage multi-annual review.

Reform Timeline Verified milestones and probability estimates
October 2020
G-TUoS exemption in effect C1
CRU exempts energy storage from Generation Use of System charges. Precedent for broader reform, but limited financial impact for BESS operating as demand-side.
March 2025
ESI/ECA recommend D-TUoS exemption C1
Energy Storage Ireland and ECA publish detailed report recommending exemption of ESS from volumetric D-TUoS charges. Identifies System Services Charge as most distortionary. Models +30% utilisation and EUR 37M/yr consumer benefit.
October 2025
CRU Phase 1 consultation closed C1
29 submissions received on Electricity Network Tariff Structure Review. Multi-annual phased programme — no specific ESS proposal published. Total network revenue EUR 2.72bn (+7.5% YoY) approved without reform.
February 2026
No CRU decision paper published C1
Web search (20 Feb 2026) confirms no new CRU decision, consultation, or proposal on D-TUoS ESS exemption since Phase 1 closure. CRU focus is on data centre connections policy.
October 2027 (earliest)
Earliest possible reform C3
Requires: CRU Phase 2 consultation (H2 2026, 60% probability), CRU decision paper (H1 2027, 30-40%), implementation in tariff year. Overall probability of reform by Oct 2027: 20-30%. Reform within 5 years of COD (by 2033): 50-60%.

Sources: CRU consultation record (CRU/21/123), ESI website, CRU 2025/26 Network Charges Approval, web search 20 Feb 2026.

07 IRR Impact of Reform Timing When reform arrives determines whether the project works
Project IRR vs Reform Timing 8% WACC hurdle rate shown
C3 — IRR estimates from financial model; reform timing is uncertain

"No reform" assumes D-TUoS charges persist for entire 20-year project life, yielding a negative IRR (-3.5%). "Year N" means reform takes effect N years after commercial operation date. The 8% WACC threshold represents the minimum return needed to attract capital. Without reform, the project is deeply unviable. Even with Year 3 reform, the hurdle is only marginally cleared (~8.7% IRR).

IRR by Reform Year
Reform Timing Project IRR vs No Reform Meets 8% WACC?
No reform (base case) -3.5% — No — NEGATIVE IRR
Reform in Year 8 3.5% +7.0pp No
Reform in Year 5 6.6% +10.1pp No
Reform in Year 3 ~8.7% +12.2pp Marginal
Reform in Year 1 (day one) ~10.8% +14.3pp Yes

What This Means for the Investment Decision

→ Without reform, the project has a NEGATIVE IRR (-3.5%) and no payback period. D-TUoS charges consume 41.1% of gross revenue. D-TUoS alone exceeds combined arbitrage + balancing revenue. NPV at 5% discount rate is EUR -22.7M. To achieve an 8% hurdle without reform, the wholesale spread must exceed EUR 90/MWh — far above projected levels.
→ Reform is the single biggest swing factor — and the only path to viability. A +14.3pp IRR improvement (Year 1 reform) dwarfs every other variable — spread compression, battery degradation, CAPEX reduction, and ancillary services combined have less impact than this one regulatory decision. Even with reform from Year 3, the project only marginally clears the 8% hurdle (~8.7% IRR).
← But reform probability is only 20-30% by Oct 2027. The base case must assume no reform. Any investment decision predicated on reform is a bet on regulatory change, not a bet on energy markets.
Recommendation: DO NOT INVEST — WAIT. Without D-TUoS reform, the project is deeply unviable (IRR -3.5%, NPV EUR -22.7M, no payback). Even with reform from Year 1, IRR reaches ~10.8% — adequate but not compelling given execution risks. With only 20-30% probability of reform by Oct 2027, the rational course is to wait for regulatory clarity before committing capital. The project is ONLY viable with D-TUoS reform.
Sources & methodology. All tariff rates from EirGrid Statement of Charges 2025/26 (DTS-T tariff) and SEMO tariff schedule. Reform scenario based on ESI/ECA report (March 2025) recommending ESS exemption from volumetric D-TUoS. Reform timeline assessed from CRU consultation record, web search 20 February 2026. IRR estimates from project financial model (50 MW / 200 MWh, 0.85 cycles/day, 85% RTE, 20-year project life). Confidence tags follow the C1-C5 scale: C1 = published/verified, C2 = strong secondary evidence, C3 = modelled/assumed, C4 = estimated, C5 = speculative. Network Imperfections Charge (EUR 19.93/MWh) excluded from base case — applicability to BESS is unresolved (C5). G-TUoS exempt for ESS since Oct 2020 (CRU decision, C1).