Dublin, Ireland — (METERING.COM) — April 16, 2009 – Ireland’s Single Electricity Market (SEM) is successfully delivering consumer benefits by creating a more efficient, reliable electricity system, according to the Market’s first annual report.
The Market is also resulting in increased competition, cost reflective prices and new investment into the island of Ireland, says the report.
The SEM commenced on 1 November 2007, combining two smaller markets with the objective of creating a single market with greater competition, more investment opportunities, an enhanced security of supply position and other efficiency benefits.
At the end of the first year of the market, there were 45 participants registered in the SEM, 13 of which joined since market commencement. These participants had a registered market capacity of 9,856 MW. The SEM operator, SEMO, processed energy payments of approximately €3 billion, with a further €600 million being paid in capacity payments.
During the year wholesale prices in the market followed demand and new efficient generation is driving lower prices. In addition the market structures encouraged the entry of new generators, while market rules saw the most efficient power plants being run, at all periods. Both of these are contributing to lower prices for consumers.
Looking ahead the report says there is still much work to be done. In particular the north-south interconnection needs to be increased to remove “bottlenecks” between the two regions.
Work is also commencing on areas of potential harmonization for the retail markets, with the aim of further enhancing competition. The regulatory authorities are in the formative stages of discussing and agreeing areas of joint action in relation to creating a framework for enhanced energy retail competition. Moreover, in electricity, work has already commenced on joint studies in relation to over/under-recovery correction factors, supply margin implications for retail competition development and also the potential for harmonizing supply tariff structures.
An all island demand response program will also commence in earnest during 2009.
Utility Regulator chief executive Iain Osborne commented, “The SEM Committee is very pleased with the success of the market in its first year of operation. Despite high underlying gas and coal costs, consumers can have confidence that wholesale prices have been fair, set in a competitive and transparent market.”
Commission for Energy Regulation (CER) Chairman Michael G. Tutty commented, “The SEM Committee welcomes growing competition in the market, as a result of entry by new players. We are particularly pleased by the high level of new plant that is being attracted by the openness of the SEM.”