The SEM Committee, who regulate the all-island Single Electricity Market (SEM) initiated a public consultation on proposals for the integration of the all-island Single Electricity Market (SEM) into the emerging EU internal electricity market on 24 January 2012. The purpose of the consultation was to seek views on options for implementing the European electricity target model on the island of Ireland in a manner that is consistent with national and EU policy objectives.The consultation ran until the 20 April 2012. IBEC and its colleagues in the all-island IBEC-CBI Joint Business Council energy stakeholders group (JBC) responded to this consultation. The consultation came against the background of commitments made at EU level by Member States, energy regulators, system operators and other European stakeholders to implement an internal market for gas and electricity in the EU by 2014. Market integration at EU level may bring benefits of complementarity, enhanced economies of scale and increased competition. The emerging EU internal market for electricity is to be underpinned by infrastructure and common trading rules known as the European electricity target model. IBEC and JBC have previously made submissions on aspects of this target model to ACER (see below).

It is understood that the existing design of the SEM will change, possibly fundamentally, affecting generators, suppliers and customers in 2016. This is because the existing SEM design is different from the proposed European electricity target model design. The SEM Committee consultation is seeking views on a range of future compliance options ranging from renovation of the existing SEM design to a radical redesign of the SEM. It is important that market participants get involved in this consultative process.

Developing a common understanding among market participants around the issues and the implications of the proposed compliance options is crucial in ensuring constructive input to the SEM Committee's consultation. IBEC and the JBC have participated in the regulators workshops to date, facilitated regulator presentations to the EPC and met the SEM Market integration Project team on the 14 February 2012 (see below). IBEC and JBC responded to the consultation on the 20 April 2012. It is understood that the Regulatory Authorities and the SEM Committee are considering the 22 responses received from the consultation and are talking to DCENR and DETI. The SEM Committee next meet on 26 September. It is expected that the Regulatory Authorities will engage with stakeholders on the process again in Q3, 2012 once these considerations are complete.

In related news, the UK published a draft legislative framework on energy on the 22 May 2012. The Energy Bill, 2012 includes provisions related to the UK's ongoing Electricity Market Reform (EMR) process. It is estimated that around a fifth of existing electricity generation capacity in the UK is expected to close over the next decade. The objective of the EMR and the draft Energy Bill is put in place measures to attract a £100 billion investment required to replace current generation capacity, upgrade their grid by 2020 and cope with a rising demand for electricity. The incentive measures include capacity payments and contracts for difference.