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One step beyond: First T-4 auction results

James Goldsmith Senior Consultant (Ireland)

The CRM T-4 Capacity auction is one of the new procurement processes being rolled out in SEM that will determine the future make up of the generation portfolio. The other auctions that will have an impact over the coming year will be the DS3 capped procurement and the Renewable Electricity Support Scheme (RESS) auction, when that does occur. The provisional results delivered 7,412MW of derated capacity procured for 2022/23, with all constraints being satisfied. In total there was 710MW of new capacity delivered, 173MW of this coming from Demand Side Units (DSU). The clearing price was €46,150/MW (£43,030.26/MW), up from €40,645.66/MW or £36,890/MW in December’s T-1 capacity auction. The result suggests that a new-build plant may have set the price, based on previous T-1 capacity auctions. This will give a total of €342 million in capacity payments for that delivery year, which is about €200mn shy of capacity payments in the previous SEM. This week’s chart considers these results to see what interesting questions this raises as we move forward in this new world of competitive auctions. Beginning to feel the heat One of the key aspects of the CRM in SEM is how the auction interacts with the constraints in the network infrastructure – Northern Ireland and Dublin are particularly constrained. The impact of these constraints was felt most severely on 24 January, where a lack of diverse generation options, limited network integration and interconnection now being set by EUPHEMIA drove sky ...

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