EU approves joint capacity mechanism in Ireland and NI

The EU Commission has approved a new joint capacity mechanism for Ireland and Northern Ireland’s energy markets. The move was judged to be able to help ensure security of electricity […]

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By Jonny Bairstow

The EU Commission has approved a new joint capacity mechanism for Ireland and Northern Ireland’s energy markets.

The move was judged to be able to help ensure security of electricity supply whilst preserving competition and complying with EU state aid rules.

Under the capacity mechanism, power plants and other capacity providers will obtain a payment for being available to generate electricity or reduce their electricity consumption to help balance demand with supply.

It will be open to all potential types of capacity providers and is expected to help keep costs for consumers in check.

The capacity providers will be selected through competitive auctions, with the first scheduled to take place in December 2017.

If electricity prices reach very high levels, power plants selected in the auctions will have to pay back some of the state aid.

Commissioner Margrethe Vestager said: “The joint Irish and Northern Irish capacity mechanism will help ensure security of electricity supply in the years to come.

“I think it is a good thing that this mechanism is operated across national borders and fosters competition among all potential capacity providers, to the benefit of consumers.”