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Concern has been raised over a lack of communication from electricity companies to owners of wind, solar and anaerobic digestion technologies in NI about the effect that the Integrated Single Electricity Market (ISEM) will have on prices.
ISEM, the new wholesale electricity market arrangement for NI and the Republic of Ireland, was initially to go live at the end of May. However, it was announced last week that it has been put back until 1 October 2018 due to IT issues.
Michael Doran, managing director of consultancy firm Action Renewables, said that ISEM will bring about a significant change in the electricity market by introducing more ways in which electricity can be traded.
“Different trading relationships will suit different people, but Power NI (the largest electricity company in NI) has decided to go down only one of three available routes. It is likely that most farmers will just take what Power NI give them, when that might actually not be the best deal for them,” Doran told the Irish Farmers Journal.
His advice to renewable electricity generators is to discuss the implications of ISEM with their current electricity buyer and be prepared to change their power purchase agreement to another supplier if a better offer is available from them under a different trading option.
“On a typical wind turbine, a farmer could lose £5,000 to £8,000 a year because they are on the wrong option,” Doran said.
Lower prices
ISEM is designed to drive prices down for consumers by helping to integrate the all-Ireland electricity market with Europe. Doran said that the overall price that renewable generators get for electricity after ISEM is likely to be less due to cheaper electricity being available from elsewhere.
“Already, we are seeing the effects of it. A new trading arrangement introduced last month in the run up to ISEM meant average prices [for renewable generators] dropped from 5.6p/kWh to 5.2p/kWh,” he said.
But with ISEM aiming to provide a framework for electricity trading across Europe, what impact will Brexit have in the longer term? “I don’t know the answer to that and neither does anyone else because the UK government has not made it clear what it’s doing,” Doran said.
SHARING OPTIONS: