EirGrid has published the provisional results of the latest capacity auction for the Single Electricity Market.
The auction is a key element of the market and is designed to deliver a reliable electricity supply at the least possible cost. It also promotes investment in new, efficient power plants into the wholesale electricity market.
The auctions are run by EirGrid and SONI (System Operator for Northern Ireland) in their roles as Transmission System Operators in Ireland and Northern Ireland respectively, through the joint venture SEMO (Single Electricity Market Operator).
The auctions were designed by the electricity regulators in Ireland and Northern Ireland to ensure sufficient capacity is secured to meet demand across the island.
This auction known as a ‘T-1’, as it secures capacity for the year ahead, closed on November 26th. Through this auction, sufficient capacity was procured to meet security of supply for the period October 2020 to October 2021.
Of the 106 generating units that qualified to take part in the auction, 98 were successful.
A total of €360 million in capacity payments will be paid during this ‘auction year’.
Prior to the introduction of capacity auctions in 2017, annual capacity payments averaged in the region of €550 million.
The T-1 auction has secured a total of 7,606 megawatts (MW) of capacity.
The auction clearing price was € 47,373 €/MW per year.
Rodney Doyle, General Manager SEMO (Single Electricity Market Operator), said: “We have now completed our fourth Capacity Auction since introducing these competitive auctions in 2017, which are designed to procure safe and secure generation at the lowest possible cost.
“The auction price has been very stable in the first four Capacity Auctions, which tells us that the Market is operating as it should.”
“What is interesting in the trends resulting from this auction is that we are starting to see the emergence of Battery Storage, even if just a small amount
The capacity required from the auction took into account peak demand, security of supply, as well as the reliability and performance of generators, and a range of demand forecasts and interconnection.
A total of 156 MW of new capacity was successful in the auction coming from 278 MW of new capacity which qualified for this auction.
Gas turbine generation makes up 4,557 MW of the capacity secured through the auction, while steam turbines represent 1,771 MW, Interconnectors and Demand Side Units are 419 MW and 415 MW respectively, and there is a small amount of pumped storage, hydro, other storage and wind power.
The provisional results are available in the Provisional Capacity Auction Results Report.
The following documents are also available on the SEMO website: