The Single Electricity Market comes into operation
The electricity industry in Ireland changed dramatically on Thursday, November 1st last year, when an all-island wholesale electricity pool, known as the Single Electricity Market (SEM), came into operation. This was a major achievement, the fruit of several years of cooperation and preparation by governments, regulators, transmission system operators and market participants both north and south of the border. Its creation was inspired by recognition that, through promoting competition, a single, larger market is better for customers, provides an overall cost benefit and delivers environmental savings.
The SEM was successfully delivered and went live three years after the initial commitment to the market made by the British and Irish Governments. It is a credit to the efforts of everybody involved across ESB that ESB's businesses were ready to participate in the new market and that they have operated successfully in the new trading environment since November last year.
ESB AIM programme ESB's businesses first started preparing for the SEM around the middle of 2005 and the All- Island Market (AIM) programme was formally established in January 2006.
The SEM has presented many new challenges and opportunities and the successful completion of the AIM programme has ensured that our businesses are able to compete in this new market. Thanks to the AIM programme, ESB's generation and supply businesses have the data, the business processes and the tools to manage their businesses in a prudent fashion and our staff have developed new skills and capabilities.
It wasn't easy. It is in the nature of projects to have hard deadlines and to be highly visible. But none more so than this project which had two governments waiting for the SEM to go-live. The go-live date was highly ambitious and highly visible. It could not be moved without serious damage to the credibility of the two regulators and of major industry players alike. That the go-live date was met is a credit to the efforts, the commitment and the determination of all concerned.
What next?
It is to be expected that the SEM
will have some growing pains and
that it will require a period to
settle down. This will lead to finetuning
over the initial months
requiring further effort on the
part of participants, the
Regulatory Authorities and the
SEM Operator.
There is no doubt that the Regulators view the SEM in a wider context – as a key stepping stone on the path towards a regional energy market. The next phase of evolution of this market will involve closer integration with the energy markets in Great Britain. ESB supports this integration and a key enabling condition to it is further undersea inter-connectors.
Transmission re-enforcement (North-South) and new interconnectors (East-West) are planned for 2012 and will bring closer market integration between Britain and Ireland. Energy has become an increasingly important priority for Ireland. Not a day goes by without energy issues making headlines in our newspapers and our television news. Climate change, security of supply, energy infrastructure are commented on and discussed on a daily basis and are at the heart of ESB's new strategy.
There can be no doubt that the industry must expect and plan for the most fundamental changes and that within 10 years it will be unrecognisable from the industry today.
In working with the regulators and other participants to deliver the SEM and in delivering ESB's own SEM implementation programme, ESB has shown once again that it is capable of meeting the most difficult of challenges with confidence.
As the AIM programme comes to a close, it is appropriate to congratulate all involved across all of ESB's businesses on the successful completion of the project.
