Description:The new all-island electricity market is due to go live towards the end of 2017. The re-design is partly due to comply with requirements of the EU's Third Energy Package. The wholesale energy market will be accompanied by a Capacity Remuneration Mechanism. In the case of I-SEM, its purpose is to ensure security of supply by encouraging efficient investment in capacity and secure generator adequacy. This third consultation on the CRM specifically addresses the auction design framework and market power mitigation measures in the CRM
Implication(s):A well designed capacity market should provide security of supply and reliable power system at least cost over the long term. In our submission we acknowledge the benefit procuring the majority of the Capacity Requirement at the T-4 auctions. This will determine the cost to the consumer in an auction informed by the competitive outcome of new capacity versus existing. In terms of market power mitigation, we point to the need for a targeted and proportionate response in identifying the most appropriate instrument.
Current Position:The SEM Committee will make a decision on the various aspects of the detailed design addressed in this paper in July 2016.
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Last Updated: 04/29/2016