Sian Crampsie

New analysis of Ireland’s planned new single electricity market shows that it will encourage a shift towards a greener and more flexible energy system.

Aurora Energy Research says that the Integrated Single Electricity Market (I-SEM), which is due to start operating in May 2018, includes reforms that will bring opportunities for new, clean technologies and result in the retirement of old coal- and peat-fired plant.

I-SEM is a new wholesale electricity arrangement for Ireland and Northern Ireland. The new arrangements will integrate the all-island electricity market with European electricity markets, and are also designed to encourage competition and improve security of supply.

The arrangements include the removal of subsidies for peat generation, the creation of a competitive capacity market and implementation of a new renewable energy support scheme. Older, more polluting plants will be forced to compete with cheaper renewables, helping Ireland to reach its renewable energy targets, Aurora says in its analysis.

Further deployment of renewable generation will be supported by rapid deployment of battery storage under EirGrid’s DS3 programme. Aurora’s analysis shows that battery developers successful in next month’s tender will expect to earn a combined €318 million over the next five years.

Aurora therefore expects the tender to be heavily oversubscribed.

However, it also notes that “significant uncertainties” exist in the I-SEM arrangements that may stall Ireland’s progress towards a renewables electricity target of 40 per cent by 2020.

“It is clear that such all-encompassing changes to the markets mean there will be a significant shift in the way the All-Island system will generate electricity,” said Mateusz Wronski of Aurora. “With competition comes short-term uncertainty, but also the opportunity for providing cleaner electricity to consumers with little effect on bills.”