The regulatory authorities for energy in Northern Ireland and the Republic of Ireland have launched a new single electricity market to combines the two countries’ wholesale electricity markets.

The new Single Electricity Market (SEM) went live on November 1 and is the first cross-border market of its kind in Europe. Its aim is to improve the efficiency and cost-effectiveness of the two markets by improving competition.

The integration of the two markets will also improve security of supply, according to Ireland’s Commission for Energy Regulation (CER) and the Northern Ireland Authority for Utility Regulation (NIAUR).

Under the new system, all electricity produced on the island will now be sold into one large pool from which electricity suppliers will buy their energy. The market is specifically designed to set the cheapest possible price for electricity at all times and will prevent any one company having and undue influence over prices.

The SEM will benefit all consumers on the island and is the culmination of a number of years of cross-border cooperation. The market will be overseen by a new SEM Committee comprising representatives of CER and NIAUR as well as two independent members.

In addition to promoting competition, the market is designed to enhance prospects for investment, facilitate the participation of renewables in the market and incorporate a harmonized approach to transmission connection policy.

CER and NIAUR believe that the SEM will result in a fall in end-user prices and that the social net benefits over a ten year period will be approximately EUR155 million in net present value terms.