On 15 December 2017, the first Capacity Market auction for the Integrated Single Electricity Market (I-SEM) took place. The results of this auction were approved by the Single Electricity Market Committee (SEMC), the cross jurisdictional decision making authority for all Single Electricity Market (SEM) matters on the island of Ireland.
The key objective of this new capacity mechanism is to deliver a more competitive electricity generation market, focused on delivering services customers need at the least possible cost and maintaining security of supply. The outcome of the recent auction process will result in savings of approximately €150 million to Irish energy consumers and a further €50 million to Northern Ireland consumers.
The auction process was managed by the Transmission System Operators (TSOs) in both jurisdictions, Eirgrid and SONI and the results of the can be found here.
Following the completion of the auction, it was expected that generators would receive lower capacity revenues as a result of greater competition. Generators which were unsuccessful in the auction will receive no capacity revenues, reflecting the increase in competition.
It had been expected that this may also result in some generators taking the commercial decision to close particular plants. In the event of this, there remains sufficient generation capacity on the island of Ireland, with some areas of local constraint.
In these areas, a process has been put in place to be managed by the Transmission System Operator (EirGrid) to deal with such a scenario to ensure the continued local security of supply.
An information paper on this process was published by the CRU on 18 December 2017 and can be found here.