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I-SEM Chart of the Week

2018

Red Dead Redemption - T-1 CRM competition

Tom Edwards Senior Consultant

Despite historical oversupply in the Irish and Northern Irish electricity generation market (14.9GW relative to a peak demand of approximately 7GW), a sharp tightening could happen soon, and ironically because of measures designed to support security margins. The catalyst for this is the upcoming Capacity Remuneration Market (CRM) auction, which replaced the fixed capacity payments under the SEM. Under the CRM, generators in the I-SEM market must compete in an auction to win a capacity payment in the relevant delivery years. Plants which didn’t win in delivery year 2018-19 have already announced closures i.e. Kilroot. The T-1 auction for delivery year 2019-20 is due to take place on 13 December 2018 and SEMO is looking to purchase 7.03GW of capacity. In 2018-19 the total successful capacity was 7.74GW at a clearing price of €41.8/kW. Hang up your guns The supply available into the T-1 auction is unlikely to change significantly, as many of the providers in the auction will remain the same as for 2018-19. However, the T-4 is a much wilder frontier by comparison. We have gone through the list of participants from the 2018-19 auction and classified them based on our assessment of their risk of closing within the short to medium term.We have concluded that the auction needs to purchase some of the plant we would consider at “red” risk. Wanted However, certainly not a significant volume of “red” capacity needs to be purchased and, on the horizon of the ...

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