The Irish Integrated Single Electricity Market (I-SEM) will see the Capacity Payment Mechanism (CPM) being replaced by the Capacity Remuneration Mechanism (CRM). The model changes drastically, from a pot of money being distributed to all generators, to a competitive sealed bid auction.
The CRM parameters and auction timings decisions paper was released by the SEM committee on the 10th April.
The first capacity market auction will take place in December for the rest of delivery year 2017/18 after I-SEM go-live in May 2018 and for 2018/19. The first T-4 auction will take place in August 2018 for 2022/23 with transitional auctions each to meet requirements in between.
The key update for the 2017 Transitional Auction include:
- Decision on Capacity Market Rules will be announced in June 2017
- Information pack issued and qualification begins in July 2017
- First transitional auction will take place on 15th December 2017
The other key auction parameters confirmed include:
- Termination fees for new assets of between €10/kW to €40/kW depending on the timing with performance bonds for 100% of termination fee
- The New Capacity Investment Rate Threshold (NCIRT) of €300/de-rated kW
- CRM charges based on broader day-time period from 7am to 11pm in all quarters
- Indicative auction cap of €118.23/de-rated kW/year with a net CONE of €78.82/de-rated kW/year
- Reliability Option Strike Price of €500/MW
- Existing Capacity Price Cap (ECPC) of 0.5 of the CONE
- Locational parameters will be zones and minimum MW in each zone
The new I-SEM CRM with change the level of interaction with market participants in an area that is already undergoing significant change that seek to meet European Union Legalisation aimed at creating a fully liberalised internal electricity market.
Find out more about the I-SEM CRM and other changes in I-SEM Fundamentals course on the 13th June 2017
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