When markets merge: evidence from Ireland’s integration with the European wholesale electricity market

How does electricity market integration affect cross-border electricity flows, wholesale prices and renewable electricity generation? We employ a synthetic control method to contribute to literature on electricity market integration using the 2018 integration of Ireland’s Single Electricity Market with the European market as an empirical case study. Results indicate a decrease in inefficient electricity flows between Ireland and Great Britain and an increase in the level of market integration with Great Britain. We find no effect on the average wholesale electricity price in Ireland, and this may reflect interconnector congestion. We also find no short-term increase in renewable generation.