The SEM Committee's Roadmap To Clean Energy Package Implementation

The Single Energy Market (“SEM”) Committee published its Roadmap to Clean Energy Package (“CEP”) Implementation Information Paper (the “Paper”) on 16 December 2019. The Paper can be found here.

The CEP contains eight European legislative acts, including the regulation on the internal market for electricity EU 2019/943 (recast) (the “Regulation”). The Regulation forms a part of the CEP that seeks to establish a modern design for the EU electricity market, one which is “more flexible, more market-oriented and better placed to integrate a greater share of renewables”. The Regulation applies from 1 January 2020, with exceptions for certain provisions.

The Paper sets out the SEM Committee's plan to progress changes to the SEM in order to implement the Regulation. The SEM Committee will work within the context of policies set by Ireland's Department of Communication, Climate Action and Environment and Northern Ireland's Department for the Economy in order to give effect to the CEP and the Regulation.

The SEM Committee has identified six key areas of the Regulation that will likely require action by the SEM Committee over 2020 in order to allow for the SEM to conform with the Regulation, including as below:

Balance responsibility (Article 5): Currently in the SEM, the de minimis threshold for participation in the balancing market is 10MW (ie, there is currently a minimum capacity for balance responsibility in the SEM of 10MW). However, under the Regulation, all market participants shall be responsible for any imbalances they cause in the market or shall delegate their responsibility to a balance responsible party of their choice. Derogations may be provided to generators that meet the following conditions:

demonstration projects for innovative technologies, subject to regulatory authority approval; power-generating facilities using renewable energy sources with an installed capacity of less than 400KW (200KW from 1 January 2026); or installations benefiting from State Aid decisions which were commissioned prior to 4 July 2019. Where derogations are provided, each Member State shall ensure that financially responsibility for imbalances is fulfilled by another market participant (eg, an aggregator).

Priority dispatch (Article 12): Under the Regulation, new renewable generators with contracts concluded after 4 July 2019 will no longer be subject to priority dispatch, with the exception of:

renewable energy generating facilities with an installed...

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