Tales of two islands – Lessons for EU energy policy from electricity market reforms in Britain and Ireland

Auteurs

David Newbery

Astract

Britain considers the energy-only EU Target Electricity Model (TEM) wanting in delivering the trilemma of
reliability, sustainability and affordability and argues that a capacity auction with long-term contracts for new
entrants is the least-cost solution compared to relying on expectations of future prices to deliver adequate
generation and demand side response. The Energy Union argues against feed-in tariffs (FiTs) for renewables,
pressing for premium FiTs (pFiTs), just as GB has abandoned PFiTs in favour of FiTs. This paper draws on the
GB experience of Electricity Market Reform before and after the 2015 change of government, to highlight
promising resolutions of the energy trilemma, and the problems that have arisen between the diagnosis of the
problem and the delivery of solutions. It sets out the theory and practice of delivering capacity, energy and
quality of supply, gives a brief history of GB electricity from the CEGB to its current unbundled, liberalized and
privatized structure. That sheds light on the trilemma problem and discusses possible solutions. The island of
Ireland Single Electricity Market reforms illustrate the problem and possible answer of how best to deliver
quality of service with high intermittency.

Energy Policy 105 (2017)