EA Ireland

EAI’s Take on the T-3 2027/2028 Capacity Auction

The recently published Generation Capacity Statement 2023 anticipates capacity deficits for each of the next 10 years in Ireland, with the anticipated shortage more pronounced in the short to medium term. Dermot McCarthy was tasked with charting the key events that ultimately led to a severe squeezing of Ireland’s energy supply capabilities, forcing regulatory bodies to import emergency electricity generation capacity, with the cost levied on all electricity customers. His review outlined very clearly that the CRM has not procured sufficient capacity over the last number of years for a variety of reasons including focus on lowest capital cost plant, rather than the generation mix required to enable the transition.

The Electricity Association of Ireland has been very consistent in its messaging on the CRM and our views that the CRM parameters need to be reformed to retain and maintain essential existing capacity and deliver the new generation capacity that is required if Ireland and Northern Ireland are to meet their respective ambitious decarbonisation objectives. We therefore welcomed the SEMC Senior Stakeholder Engagement meeting that took place on the 26th January to seek industry views on how to facilitate investment, qualification, and delivery of capacity to ensure security of supply in the future.

The main proposal from SEMC was a T-3 2027/2028, which included a proposed auction timetable. Industry expressed strong views against a T-3 auction at the Senior Stakeholder meeting, but a consultation has since been released on the auction parameters for this T-3 auction. Some of the changes to the parameters being considered are increasing the auction price cap as well as setting an Increase Tolerance (INCTOL) value greater than zero.

The EAI are not in favour of the T-3 2027/2028 for a number of reasons:

  • The T-3 timeline, as proposed, does not allow sufficient lead time for delivery of new capacity. A key recommendation of the EY Review was to extend auction lead times, and this was also overwhelmingly supported by industry.
  • Holding a T-3 auction effectively takes required volumes out of the T-4 auction and suppresses the clearing price. It heightens the perception of regulatory risk which deters investment and increases the cost of capital.

The EAI are instead proposing a T-4 or T-5 auction that has incentives for early investment. This would allow a longer lead time but still gives the opportunity for capacity to deliver earlier and be rewarded.


The SEM Committee have decided not go ahead with the T-3 auction and have published an information note detailing their intent to hold a T-4 2028/2029 with incentives for early delivery of new capacity in capacity year 2027/2028