The Integrated Single Electricity Market (I-SEM) is the new wholesale electricity market for Ireland and Northern Ireland. Learn about its history and the stages it went through prior to launch.
Purpose of the I-SEM
The I-SEM integrates the all-island and European electricity markets. It enables free trade across borders without discrimination between internal and cross-border transactions.
To enable cross-border trade, each coupled market implements its own rules based on a standard ex ante trading arrangement. This is achieved using the EU Target Model.
Key features of the Target Model are:
- A common price coupling algorithm for scheduling all ex ante markets and determining flows between geographic regions
- Energy trading within regions and across borders up to close to real time
- Forward trading of physical or financial trading rights for cross-border capacity
- Integrated balancing arrangements that enable neighbouring system operators to trade between regions for balancing
In a coupled market, energy transactions involving sellers and buyers from different bidding zones are centrally collected and cleared. This maximises the most efficient trades.
Trades from one bidding zone to another are only restricted by cross-border capacity, subject to allocation constraints. Market coupling involves system and market operators working together to allocate cross-border capacity and optimise cross-border flows, without the need for explicit auctions.
As long as energy can flow freely, there will be a single price across all coupled markets. When the network is congested between bidding zones, prices diverge between those zones.
The price difference between bidding zones incentivises efficient short-run use of the available capacity. It also encourages an efficient longer term investment in infrastructure to relieve the congestion.
- Download Quick Guide to the I-SEM
- Download I-SEM Industry Guide
The market trial was a full function pilot demonstration of the market and system operations processes prior to go-live. It was an opportunity for participants to fully vet their processes and systems, while experiencing the market in a risk-free environment.
The other objectives of the market trial were to:
- Allow participants to test new or modified systems and processes
- measure successful execution of market operations processes
- Facilitate a smooth transition into the live market
- Identify areas for improvement to address prior to launch
Market readiness was how we prepared for the I-SEM to go live, including the plan to transition from the Legacy SEM. The Market Readiness Programme coordinated with participants to get them ready to participate in the I-SEM.
- Outlined measures to gauge if a participant was ready to trade in the I-SEM
- Developed checklists for participants to self-assess their readiness
- Produce reports on overall market readiness
- Inform the decision on whether the I-SEM was ready to go live
of functional and technical information to ensure that participants were ready to implement the required changes
of timely and accurate information regarding project status, implementation plans and technical design specifications
by providing a way for participants to offer input and provide feedback on business, functional and technical matters