Change could mean lower prices

Change could mean lower prices

Reform of the all island Single Electricity Market (SEM) has been forecast to put up bills but now there are grounds for believing it will cut charges

The move to the new arrangement which has been entitled the Integrated Single Electricity Market or I-SEM and is required by the EU will involve the auctioning of capacity payments. These are a reward to generators for keeping their plant available for use. And they make up roughly a fifth of the wholesale price

Currently the value of these capacity payments is decided by regulators according to a formula. They’re worth about £60 a year for each kilowatt of generation

But an auction carried out by the National Grid in Great Britain just before Christmas saw generating companies ready to provide their plant at around £20 a year for each kilowatt of capacity.

If an auction here were to replicate these results, it would mean a cut in the wholesale price of over 10% and a cut in domestic charges of just over 5%.

I stress these are back of the envelope calculations and I have to point out that I-SEM doesn’t come in for another year but it is food for thought

Last updated on 11/05/2016

Key Information

Compare Prices

Our calculator will assist you search for the tariff that suits your needs. Just answer the questions to find out how suppliers are ranked on cost. Then check what bonuses and penalties may apply. But before switching, you should read our terms and condit

Home heating costs compared

Switching from one form of central heating to another is a challenging decision. Should you stay or should you go. It’s worthwhile checking how different fuels compare in price though past results are no guarantee of future performance.


Electric cars, solar panels, ground source heat pumps and wood burning stoves. The ways to cut your contribution to global warming are many and growing. What should you do and how much will it cost you? Click here for advice, tips and debate.

Contact Us

How to get in touch

  • Comment and reaction is welcomed by If you identify any errors, your messages are especially welcome. But if you simply disagree with the judgments expressed, please get in touch too by filling out the contact form as shown. We will attempt to get back to you within five working days with a response.

Send us a message