EirGrid Group has embarked on a far-reaching project that has led to a new wholesale market for electricity on the island of Ireland. The project is called the Integrated Single Electricity Market or I-SEM.
The new I-SEM market is being designed and overseen by the SEM Committee, consisting of the Commission for Energy Regulation (CER) in Dublin, the Utility Regulator (UR) in Belfast, plus an independent member and a deputy independent member.
I-SEM has replaced the Single Electricity Market (SEM), a wholesale electricity market where electricity was traded in bulk across the island of Ireland. The SEM was established in the Republic of Ireland and Northern Ireland in November 2007 and was the first market of its kind in the world when it opened.
Free trade across borders is the foundation of the single European market.
This principle applies to the energy sector where the creation of a single European market for electricity and gas is an important goal of the EU.
To achieve this goal, national electricity markets throughout the EU are being aligned with a common European “Target Model” for cross-border electricity trading.
In Ireland, the all-island wholesale Single Electricity Market (SEM) has been in place since 2007. It is regulated by the SEM Committee.
I-SEM replaced the SEM on 01 October 2018.
The Single Electricity Committee (SEM Committee) is the decision making body for the I-SEM. It comprises representatives from regulators in Northern Ireland (the Utility Regulator) and the Republic of Ireland (the Commission for the Regulation of Utilities) and two independent members.
I-SEM was brought in following an instruction to the SEM Committee from the Irish and Northern Irish authorities to develop a new set of electricity trading arrangements that will meet the requirements of the EU Target Model.
It is anticipated that I-SEM will bring benefits, including:
The New Market
The SEM Committee published the high-level design of this new wholesale electricity market in September 2014, see this here.
It will seek to generate maximum competition through concentrating trading in the day-ahead, intra-day and balancing markets.
These short-term markets are directly linked to similar markets across Europe through the Target Model. This will provide efficient and transparent prices which will support trading in the forwards timeframe.
The new market arrangements will require generators and wholesale suppliers of electricity to forecast their generation and consumption and to bid at the price at which they are prepared to buy and sell.
I-SEM Detailed Design & Implementation
The detailed design and implementation phase of the project comprises:
The detailed market design and implementation phase of the I-SEM project is well underway, with the focus on delivering:
I-SEM also marks a significant period of change for market participants.
New market products and operational deadlines present both opportunities and risks to participants’ revenue streams and operating models.
To meet this challenge, there is a programme to align the I-SEM readiness plans with those of the market participants.