EirGrid Publishes Provisional Results of T-4 2023/2024 Capacity Auction for the Single Electricity Market

EirGrid has published the provisional results of the latest capacity auction for the Single Electricity Market.

The capacity auction is a key element of the all-island wholesale electricity market and is designed to deliver a reliable electricity supply at the least possible cost.  The auction also aims to encourage new and efficient power plants into market; but only if these are competitive and economical solutions.

The auctions are run by EirGrid and SONI ( the Electricity System Operator for Northern Ireland) in their roles as Transmission System Operators in Ireland and Northern Ireland respectively, through the joint venture SEMO (Single Electricity Market Operator).

The auctions were designed by the electricity regulators in Ireland and Northern Ireland to ensure sufficient capacity is secured to meet demand across the island.

This auction is known as a ‘T-4’ auction because it secures capacity four years in advance.  The auction ran on 27th of April, procuring sufficient capacity to meet security of supply for the period October 2023 to October 2024.

T-4 auctions take place every year, with the next running in January 2021.

This auction secured a total of 7322 (MW) of capacity. The auction clearing price was €46,149 per MW per year.

Of the 124 generating units that took part in the auction, 115 were successful.

A total of €363 million of capacity payments will be paid to generators who were successful in this auction. Capacity payments are paid to generators to ensure they are available to meet the demand for electricity, especially at peak times. Successful bidders in the capacity auction will be paid during the year for each MW of capacity they sold to the market in the auction.

Prior to the introduction of capacity auctions in 2017, annual capacity payments averaged in the region of €550 million.

Rodney Doyle, General Manager SEMO (Single Electricity Market Operator) said; “While all auctions are important, the T-4 auctions are of particular importance to longer term electricity security. This auction has ensured that the island has a secure supply until October 2024.  We realise the critical role of a reliable and efficient electricity supply not just for today but also for the future. It is positive then, that the auction process continues to work as it was designed to, in delivering sufficient capacity for the island at the most efficient cost.”

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.

A total of 761 MW of new capacity was successful in the auction.

Gas turbine generation makes up 5269 MW of the capacity secured through the auction, while steam turbines represent 600 MW, Interconnectors and Demand Side Units are 423 MW and 505 MW respectively.

The provisional results are available at Provisional Capacity Auction Results Report on the SEMO website.

The following documents are also available: