Belfast, April 4th 2019 - SONI (System Operator for Northern Ireland) has published the provisional results of the first T-4 capacity auction for the Single Electricity Market.
The auction is a key element of the market and is designed to deliver wholesale electricity at the least possible cost. The T-4 auction also aims to encourage new investment and innovation, but only if it is the most economical solution.
T-4 auctions will take place every year for capacity to be delivered in four years’ time. In addition, further T-1 auctions will run to secure incremental capacity.
The first T-4 auction closed on April 2nd, procuring sufficient capacity to meet security of supply for the period October 2022 to the end of September 2023. The auction secured 1,865 megawatts (MW) of capacity for Northern Ireland. The auction clearing price was £43,030 per MW per year.
£80 million in capacity payments will be paid to those NI generators who were successful in the auction. Capacity payments are paid to generators to ensure they are available to meet the demand for electricity, especially at peak times.
Capacity payments are one revenue stream for generators under the all-island wholesale electricity market arrangements. Generators are also paid for the energy they produce and for system services.
Robin McCormick, General Manager of SONI said: “This is a competitive auction where efficient and cost-effective capacity is most likely to be successful. Generators who have been awarded contracts are committing to provide the capacity needed for safe, secure electricity at the lowest possible price.”
The auction was designed by the Single Electricity Market Committee, which is made up of the electricity regulators in Northern Ireland and Ireland, along with two independent members, to ensure sufficient capacity is secured to meet demand across the island at all times.
The capacity required from the auction took into account peak demand, security of supply, as well as the reliability and performance of generators, and a range of demand forecasts and interconnection.
Mr. McCormick added: “We have worked with generators to prepare and help them to participate in the auction. I am pleased that the auction has delivered the capacity we need to secure Northern Ireland’s electricity for the 2022-2023 year at a competitive price.”
The provisional results are available at Provisional Capacity Auction Results Report.
SONI has also published the following documents on the SEMO website:
Note to editors:
The T-4 auction is part of a series of changes made to the Single Electricity Market to increase cost efficiency and competitiveness. The new arrangement maximises efficiency of electricity trading on interconnectors. It is also designed to encourage new investment and innovation.
The market was designed by the SEM-Committee comprising the electricity regulators in Northern Ireland and Ireland. This design was implemented by SONI in Belfast and EirGrid in Dublin and the upgraded market has been live since October 1st 2018.
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