Commission approves joint capacity mechanism for Ireland and Northern Ireland

Further information:

The Commission assessed the capacity mechanism under the 2014 Guidelines on State aid for environment protection and energy. As required, Ireland and Northern Ireland demonstrated the measure's necessity for ensuring the security of supply objective, based on a thorough market analysis.

The Commission concluded that the capacity mechanism complies with EU State aid rules, in particular because it is open to all potential types of capacity providers, including demand response. Furthermore, the measure will keep costs for consumers in check thanks to the regular, competitive auctions to allocate capacity contracts.

Background information:

The joint Irish and Northern Irish capacity mechanism forms part of a set of market reforms referred to as the Integrated-Single Electricity Market ('I-SEM'). It is set to start in May 2018.

Under the capacity mechanism, power plants and other capacity providers in the 'all-island market' obtain a payment for being available to generate electricity or, in the case of demand response operators, for being ready to reduce their electricity consumption to help balance demand with supply. It helps to ensure that there is sufficient capacity to meet electricity demand at all times in Ireland and Northern Ireland.

The European Commission approved on 24 November 2017 under EU State aid rules the capacity mechanism for the jointly operated Irish and Northern Irish electricity market.

Reuters, 24.11.17: EU okays joint Irish, Northern Irish power back-up scheme https://uk.reuters.com/article/idUKKBN1DO15J

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