Models / Ireland Price Formation

Overview

Ireland Price Formation is a model co-developed by Bayesian Energy and Infranua: an hourly day-ahead clearing-price model for the all-island Single Electricity Market (SEM), covering the Republic of Ireland and Northern Ireland, drawing on Infranua's data and deep expertise in the Irish power system and market. It solves cost-minimising dispatch of the all-island generation fleet over a full 8,760-hour year as a single copper-plate price zone, with the merit order calibrated to the observed day-ahead price. It is published as a validated 2025 hindcast and as a set of forward scenarios for 2030 to 2050, each a re-solvable Convexity database.

Bayesian Energy and Infranua also offer bespoke consulting studies on current and future SEM market pricing, production costs and dispatch.

Model

The SEM is a single copper-plate bus carrying the full Irish fleet of thermal, wind, solar, hydro, pumped-storage and battery units. Each thermal unit's marginal cost is built from its historical generation and market behaviour, and the merit order is calibrated to the observed day-ahead price. Demand, renewable availability, and fuel and carbon prices come from authoritative public and partner data. Interconnectors to Great Britain (Moyle, EWIC, Greenlink) and France (Celtic) are solved two ways, both validated on 2025. In the first they are pinned to the real observed Great Britain and French day-ahead prices. In the second they are solved endogenously against coupled Great Britain and French fleets, so import prices and flows respond to system conditions rather than being fixed to observed values. The forward years use the endogenous mode.

Validation (2025)

The model is validated against the day-ahead price, which is its calibration target. Modelled 2025 prices correlate 0.89 with the actual market at €25.5/MWh RMSE, and average €114.7/MWh against an observed €114.5/MWh, a bias of +€0.2. Both interconnector treatments reproduce the observed year, at 0.89 correlation for the price-pinned mode and 0.85 for the endogenous mode. Generation and dispatch are shown for context rather than as validation gates. A day-ahead price model clears economic dispatch, which is not the same as metered generation (for example, interconnector imports are not attributed to a carrier), so a generation comparison is not a meaningful pass-or-fail test.

2030–2050 outlook

The forward scenarios use the same engine. Because no market offers exist for future years, thermal costs switch from the 2025 bid-fit to a heat-rate SRMC (fuel cost times heat rate, plus carbon), and the Great Britain and French neighbours are solved endogenously on their forward fleets, since there are no observed future prices to pin to. The Irish fleet is scaled to the capacity pathway, with new solar and offshore wind added from zero, interconnection growing toward its planned build-out, and the Celtic link live from 2028. As both Ireland and its neighbours decarbonise, the SEM mean price falls from about €56/MWh in 2030 to about €38/MWh in 2050:

Data sources

Scope & caveats

• 2025 is a validated hindcast. The 2030 to 2050 years are scenarios rather than forecasts. They show how price responds to a given capacity, demand and fuel pathway, not what price will actually be.
• The forward years are unvalidated, since there is no observed price to check them against, and they run on a single weather year. They are sensitive to the neighbour and demand assumptions, notably a high-electrification Great Britain demand and a growing continental interconnection backstop. A multi-weather-year ensemble and demand sensitivities are planned.
• In 2050 the median price is about €8/MWh, with around half of hours near zero. This reflects a system where wind and solar routinely exceed demand and push the marginal price down to the renewable floor. In a real market those hours would show curtailment and negative prices, and scarcity value concentrates into fewer, higher peaks.