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 the delivery year 2018-19 have already announced closures i.e. Kilroot. The T-1 auction for the 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.