The Irish Electricity Market: New Regulation to Preserve Competition. ESRI Research Notes 2015/1/1

Di Cosmo, Valeria and Lynch, Muireann A. (2015) The Irish Electricity Market: New Regulation to Preserve Competition. ESRI Research Notes 2015/1/1. UNSPECIFIED.

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Abstract

In the electricity sector there are two different markets: the wholesale (or spot) market, in which electricity generators generate and sell electricity at a new price every half hour, and the retail market, in which electricity supply companies sell electricity to the final consumers. Supply companies tend not to change the price they charge their consumers very frequently, and so these companies typically enter into longer-term contracts for electricity with generators to avoid the risks they would face if they bought at a new price every half hour. Internationally, many electricity markets also include a specific capacity payment mechanism, which ensures generators receive sufficient revenue to cover their fixed costs, thereby incentivising investment.

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