semo market overview - single electricity market operator market overview.pdf · shadow price...

SEM Market Overview

July 2013

SEM Drivers

SEM

Competition

Sustainability Security of

Supply

Copyright © EirGrid/SONI 2013 2

SEM Objectives

– to facilitate the efficient, economic and coordinated operation, administration and development of the Single Electricity Market in a financially secure manner;

– to facilitate the participation of electricity undertakings engaged in the generation, supply or sale of electricity in the trading arrangements under the Single Electricity Market;

– to promote competition in the single electricity wholesale market on the island of Ireland;

– to provide transparency in the operation of the Single Electricity Market;

– to ensure no undue discrimination between persons who are parties to the Code; and

– to promote the short-term and long-term interests of consumers of electricity on the island of Ireland with respect to price, quality, reliability, and security of supply of electricity.


Sell Volume (MWh)

Charges (€, £)

Buy Volume (MWh)

Payments (€, £)

Generation

Demand

Single Electricity Market


http://www.havetravelfun.com/images/2002/ireland/ireland024.jpg

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The SEM – Key Features

• Gross Mandatory Pool

• All Generators with MEC > 10MW must sell all their output through the SEM

• Wholesale market – Suppliers buy electricity from SEM and sell onto end user (retail)

• Unconstrained i.e. does not consider reserve, transmission constraints, etc.

• Ex-Post pricing i.e. Pricing occurs after the fact.

• Deviations between market and system captured by dispatch balancing costs

• Capacity Payment to reward available capacity and provide stability


Market Statistics

• Established November 2007

• € 3 Billion Annual Wholesale Market

• 33 TWh Annual Consumption

• 11 GW Registered Capacity

• 76 Participants (Invoiced Entities)


Registered SEM Capacity by Fuel Type

BIO 13MW

COAL 1331MW

DISTL 672MW

GAS 5556MW

HYDRO 222MW

OIL 793 MW

PEAT 346 MW

PUMP 292MW

WIND 1698MW


System Operations

Market Operations

Markets vs. System Operations

Interruption adv ice

Bills and Pay ments

f or Electricity and Serv ices

Energy f low s

Information/data f low s

Financial f low s

Distribution

Network

(for

Distribution

Customers)

DUoS

Settlements

Generator Of f ers

Market Schedules

Market Settlements

Market

Inf ormation

Bilateral Contract Settlements

Operations

Schedules

Public

Operational

Plans

Bilateral/OTC Contracts

Transmission

Network

(for Transmission

Customers)

Generators

Generators (incl.

Moyle I/C and

Pumped Storage)

Market Schedules

Market Settlements

Demand Side Bids Customers

Transmission Network Transmission

System Owners

• ESB Netw orks

• NIE

Distribution

Network

Operators

• ESB Netw orks

• NIE

Transmission

Network Transmission

Network

Demand &

wind

generation

f orecasts

Transmission

System

Operators

• EIRGRID

• SONI

Weather f orecasts, industry projections & economic f orecasts

Metering Providers • EIRGRID

• SONI

• MRSO

• Northgate

Market Operator

(SEMO)

Information

Providers

Suppliers

TUoS and Ancillary

Serv ice settlements

(EIRGRID and NIE)

Market

Schedule

Metering Data

Maintenance Plans (NIE only )

TUoS and Ancillary

Serv ice settlements

(EIRGRID and NIE)

Metering

Data

Dispatch

Instructions

8

SEM Market Process

Settlements Statements

Invoices

Credit Risk Mgmt Funds Transfer

Market Participants

Bid Technical

Meter Data Generator

Data

Pricing MSQ SMP

Meter Data Supplier Data TSO Data

Generator Data

9 Copyright © EirGrid/SONI 2013

SEM: Trading Interactions

Single Market Operator (SMO)

Transmission System Operator (TSOs)

Interconnector Administrator

Meter Data Providers (MDPs)

Banks

Public Prices

Exchange Rates

Including …. Dispatch Instructions Real-Time Availability Forecast Demand

MSQ

s &

SM

Ps

Capacity Bids

Capacity Holdings

Price Effecting Generation Non Price Effecting Generation Price Effecting Demand Non Price Effecting Demand

Generator Units

Demand Side Units

Interconnector Units

Supplier Units

Bid

s an

d O

ffe

rs (C

OD

/TO

D)

Volumes

Dispatch Schedule

Operations Schedule

MSQs


Market Functions


SEMO Organisation

Market Operations

Pricing and Scheduling

Settlement

Funds Transfer

Customer Care and support

Registration

Manage credit cover

SEMO IT

Functional Team Design and build CMS systems based on Modifications.

Infrastructure Team support Extensive

Hardware, Software and Telecommunications

infrastructure

Market Development

Strategic Development

Trading and Settlement Code

Regulatory Affairs

Market Modelling

Analyse the Market

SEMO Finance

Funds Transfer

Manage Budgets

Audits

Financial Reporting


Services provided by SEMO


SEMO Services to Customers Service Description Market Processes Registration Dedicated team to assist customer in the process of becoming part of the SEM, through out the registration

process. Prices and Schedules Determination of Market Prices and Schedules, including interconnector flows

Issuing P&S 5 times per day

Settlement Calculation and publication of settlement amounts for the market. For Energy, Capacity and Market Operator Charges

Payment Processing Receipt and monitoring of payments to the market. Processing of payments to Participants based on self billing invoices

Credit Cover Management of collateral to cover market exposures. Calculation of credit cover requirements and monitoring of compliance

Guarantees of Origin Determination of Guarantee of Origin Certificates for the SEM and management of transactions

Fuel Mix Determination of the Fuel Mix for Ireland Understanding the SEM and working within the SEM General Queries on the Market Answering questions and queries about the market. Through market helpdesk, website content (including FAQ

and training presentations) Education and Training on the Market

Includes market analysis e.g.. price events, how the pricing solver works, special topics etc; and Training sessions e.g.. W2TM, Market Overview etc.

Market Data Static and Dynamic reporting and Webservices functions on the website provide historical and real time data Market Participant Interface (MPI) for private information

Market Systems and Access Technical assistance with market systems, digital certs etc.

SEMO Services to Customers Service Description Market Change Facilitating Testing with the Market of system releases

Through SEMO IT e.g.. market test/trial: scope of change workshops, planning workshops for market trial scenarios, test environment, daily calls during testing period

Assistance with the development of modifications to the Code

Through Market Development

Administration of the modifications process

Modifications Secretariat, Analysts to assist with understanding implications of changes

Customer Services Market helpdesk Online Self Service, email, phone, fax Market Messages To update customers on real time activities and status of the market processes. Keep them informed of upcoming

events etc.. Market Operations Conference Calls (MOCC)

Bi-monthly calls to update on recent events and issues, inform of upcoming events and provide reminders. As well as a forum for asking questions.


Pricing & Scheduling


Pricing

Key Outputs:

– Day Ahead and Within Day Interconnector

Flows

– Ex-Post Market Prices

– Ex-Post Market Schedules

Types of Generation Units

Thermal Generator (e.g.. gas, coal fired and biomass)

Hydro Generator (water powered)

Interconnector Units (e.g.. imported/exported energy)

Demand Side Unit (e.g.. curtailable load)

Wind Unit (e.g.. wind unit, wind farm)

Settlement Classes

PPMG

YES NO

Priority Dispatch

PPMG VPMG NO

Controllable

YES

APTG VPTG PPTG PPMG: Predictable Price Maker Generator

PPTG : Predictable Price Taker Generator

VPTG: Variable Price Taker Generator

APTG: Autonomous Price Taker Generator

Data Element I/C Unit

Pumped Storage Unit

Demand Side Unit

Unit Under Test

Energy Limited Unit

Other Predictable PPMG

Other Variable PPMG

Price Quantity Pairs Yes Yes Yes Yes Yes Yes

No Load Costs Yes Yes Yes Yes

Start Up Costs Yes Yes Yes Yes

Nomination Profile Yes

Decremental Price Yes

Max. I/C Unit Export Capacity

Yes

Max. I/C Unit Import Capacity

Yes

Priority Flag Yes

Target Res. Level Yes

Shut Down Cost Yes

Offer Data – Price Maker Generation


Data Element Autonomous Generator Unit

I/C Residual Capacity Unit

Unit Under Test

Other Predictable PPTG Unit

Other Variable PPTG Unit

Price Quantity Pairs Yes

No Load Costs Yes

Start Up Costs Yes

Nomination Profile Yes Yes Yes

Decremental Price Yes Yes Yes

Max. I/C Unit Export Capacity

Max. I/C Unit Import Capacity

Priority Flag

Target Res. Level

Shut Down Cost

Offer Data – Price Taker Generation


Data Element DSU

Price Quantity Pairs Yes

No Load Costs

Start Up Costs

Nomination Profile

Decremental Price Yes

Max Up Time/Max Down Time Yes

Ramp Up/Ramp Down

Priority Flag

Target Res. Level

Shut Down Cost Yes

Offer Data – Demand Side Units


Note: Demand Side Units are modelled as Generating Units (only the demand reduction is considered by the MSP software).

Supply Units

Supply units are non physical units created for the purpose of carrying out appropriate Settlement calculations

Types of Supply Units in the Market are:

• Trading Site Supply Units (TSSUs); means a Supplier Unit that contains only the Demand within a Trading Site, and is settled on a net basis against the Generator Units on that Trading Site under the rules specified in the Code.

• Associated Supply Unit (ASU); means a Supplier Unit which is both recorded to a Trading Site and which has its Demand settled on a gross basis with the Generator Unit(s) on that Trading Site under the rules specified in the Code.

• Supplier Unit (SU); means the Unit comprising of one or more Generators or Demand Sites which are not Generator Units (for which metered consumption may be positive or negative where such aggregated metered consumption is available). For the avoidance of doubt all Associated Supplier Units, Trading Site Supplier Units and Error Supplier Units shall be Supplier Units as well as other Supplier Units that do not fall into those classes.


Determining Market Schedule & Price

ON

ON

ON

OFF

ON

Price = € 50/MWh

Demand

Price Takers (Zero Price, mainly wind)


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What is System Marginal Price (SMP) made of….

Shadow Price

Uplift SMP

• Single price for SEM per Trading Period (1/2 hour interval) • Price paid/received by both Suppliers/Generator • Determined using Market Scheduling and Pricing (MSP) Software

• Unconstrained Schedule • Scheduled based on optimising lowest Production Cost • Uplift applied to cover Start Up Costs and No Load Costs • SMP bounded by Market Price Cap (€1000/MWh and - €100/MWh)


System Marginal Price (SMP)


Influences on Market Price

• Demand

• Fuel Price

• Wind Penetration

• Interconnection Flows

• Availability of Generation


SMP Trends

Link to Original Data

0

20

40

60

80

100

120

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

44

-20

07

53

-20

07

9-2

00

8

18

-20

08

27

-20

08

36

-20

08

45

-20

08

1-2

00

9

10

-20

09

19

-20

09

28

-20

09

37

-20

09

46

-20

09

2-2

01

0

11

-20

10

20

-20

10

29

-20

10

38

-20

10

47

-20

10

3-2

01

1

12

-20

11

21

-20

11

30

-20

11

39

-20

11

48

-20

11

4-2

01

2

13

-20

12

22

-20

12

31

-20

12

40

-20

12

49

-20

12

5-2

01

3

14

-20

13

23

-20

13

Gas

Pri

ce (

Pe

nce

/Th

erm

) SM

P (

€/M

Wh

)

MSQ

(M

W)

Week No. & Year

MSQ

SMP

Gas Price

Big Snow - Demand Driven

Gas Crisis High Gas Prices

Unseasonal cold spell Day Ahead gas price increases Availability of plant

Increasing gas prices

Recession - decreasing demand

http://themarket/sites/mo/ma/Market Analysis/SMP and Gas Price Trends.xlsx

0

1000

2000

3000

4000

5000

6000

7000

0

50

100

150

200

250

300

06

:00

07

:00

08

:00

09

:00

10

:00

11

:00

12

:00

13

:00

14

:00

15

:00

16

:00

17

:00

18

:00

19

:00

20

:00

21

:00

22

:00

23

:00

00

:00

01

:00

02

:00

03

:00

04

:00

05

:00

De

man

d (M

Wh

)

Pri

ce (€

/MW

h)

9th Dec 2012 Ex Ante Market Schedule

SMP SYSTEM LOAD

Impact of Demand


Impact of Fuel Prices

BIO 13MW

COAL 1331MW

DISTL 672MW

GAS 5556MW

HYDRO 222MW

OIL 793 MW

PEAT 346 MW

PUMP 292MW

WIND 1698MW

SEM Registered Capacity


£0.00

£0.10

£0.20

£0.30

£0.40

£0.50

£0.60

£0.70

£0.80

£0.90

£1.00

€0

€10

€20

€30

€40

€50

€60

€70

€80

€90

Jan

-10

Feb

-10

Ma

r-1

0

Ap

r-1

0

Ma

y-1

0

Jun

-10

Jul-

10

Au

g-1

0

Sep

-10

Oct

-10

No

v-1

0

Dec

-10

Jan

-11

Feb

-11

Ma

r-1

1

Ap

r-1

1

Ma

y-1

1

Jun

-11

Jul-

11

Au

g-1

1

Sep

-11

Oct

-11

No

v-1

1

Dec

-11

Jan

-12

Feb

-12

Ma

r-1

2

Ap

r-1

2

Ma

y-1

2

Jun

-12

Jul-

12

Au

g-1

2

Sep

-12

Gas

Pri

ce (£

/Th

erm

)

Syst

em

Mar

gin

al P

rice

(€

/MW

h)

Volume Weighted Monthly Average SMP & Average Gas Price

SMP Gas Price

Impact of Fuel Prices


Demand

Impact of Low Wind

• Lower wind means less demand met by price takers

• Generation required by price making generation is greater

• Therefore units scheduled are more expensive

Higher Price = € 75/MWh


System Demand & Wind Penetration


• Wind Penetration Impacts on SMP

• High Wind Day versus Low Wind Day

Ex. Ante1

09:30

Ex. Ante2

11:30

Within Day

08:00

Ex. Post Indicative

14:00

Ex. Post Initial

14:00

Cycle per Trading Day

TD TD -1 TD +1 TD -1 TD +4

Modified Interconnector

Unit Nominations (MIUNs) for

Capacity Holders


Unit Nominations (MIUNs) for non Capacity Holders

Provides input to RCUC (real time)

COD/TOD locked in


Unit Nominations (MIUNs)

6pm to 6am

Provides Market with Indicative

Settlement values regarding Price & Schedule

Provides Market with Final Price &

Settlement values


TD

20th June

TD -1

21st June

19th June

21st June

GWC 08:00

GWC 09:30

GWC 11:30

EA1

WD1

EA2

EP1

EP2

08:00 07:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00

TD -1

TD +1

TD + 4 16th June

• Operational perspective, not Trading Day • 5 runs • 8am to 5pm • 365 days year

Operational Day – 20th June

Bid submissions must be made by Gate Window Close

Run Completed 11:00

Run Completed 13:00

Run Completed 09:30

Run Completed 16:00

Run Completed 17:00


System Operations (TSOs)

Market Operations (SMO)

Markets vs. System Operations

Bids / Offers

Forecasts

Determine Ex Ante

MS/Prices

Determine Operations Schedule

Determine Ex Post

MS/Prices

Review / revise Operations Schedule

Determine Dispatch

Instructions

Issue Instructions

& Log Monitor

Including … Real Time Availability

Group Constraints Reserve constraints

Instruction and Availability

Profiling

Indicative / Initial Metering

Including … Real Time Availability Dispatch compliance

SO-SO Trades


Interconnector Flows

RCUC Scheduling Tool

• RCUC: Reserve Constrained Unit Commitment

• ABB Software tool, used only by the TSOs, which utilises Linear

Programming to optimise Unit Commitment and Economic Dispatch

• RCUC considers constraints – UUC does not

Main Inputs: •Load Forecast •Wind Forecast •Expected Generator Availability •Generator Testing •Reserve Requirement •Transmission Constraint Groups(TCGs) •Hydro Targets •Market submitted prices and generator technical parameters •Interconnector Flows

Outputs: •Generation Schedule •Tie Line Flow Schedule •Reserve Schedule

RCUC


Settlement


Settlements Cycle

Settlement

Calculations

Payment

In and Out

Compile and Issue

Settlement Statements

Compile and Issue Invoices

Meter Data

(MDPs)

Market Data

(TSOs)

Data

Submitted


Wholesale Market €2.9 Billion

Capacity € 530 Million

Imperfections €176 Million

Market

Operation €24 Million

Energy €2120 Million


Capacity Payment Mechanism

Annual Capacity Payment Sum

€529,876,722 (2013)*

Capacity Charges = Recovery of Capacity Payment.

It is intended that in each month: Charges = Payments

CP1 CP2 CP3 CP4 CP5 CP6 CP7 CP8 CP9 CP10 CP11 CP12

* http://www.allislandproject.org/GetAttachment.aspx?id=4c23d8a5-c2a6-496b-8788-252d13b8ead2

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec


http://www.allislandproject.org/GetAttachment.aspx?id=4c23d8a5-c2a6-496b-8788-252d13b8ead2









Settlement Charges & Payments Supplier Charges Generator Payments (& Charges)

Energy Charges (weekly)

All Supplier units based on Metered Demand and System Marginal Price

Energy Payments (weekly)

To all Generator units based on Market Scheduled Quantity (MSQ) and System Marginal Price (SMP)

Imperfections Charge (weekly)

To recover constraint costs, MWP and Uninstructed imbalance payment

Constraint Payments (weekly)

Apply if Dispatch Quantity (DQ) does not equal MSQ

Uninstructed Imbalance Payments

If Actual Output (meter data) differs from DQ

Make Whole Payments (weekly)

Ensures that all Generator Unit Operating Costs are met

Testing Charges (weekly)

charge in respect of a Generator Unit Under Test in accordance with the Testing Tariff.

Capacity Charge (monthly)

Charge for recovery of payment

Capacity Payments (monthly)

A payment in relation to MW availability

Market Operator Operating Cost Charge (weekly & monthly)

Fixed (FMOC) and Variable (VMOC) Charges per Unit

Market Operator Operating Cost Charge (weekly & monthly)

Fixed Charge per Units

Currency Costs (weekly & monthly)

The cost of transacting across more than one jurisdiction


Timetabled Resettlement

When?

Settlement date plus 4 months (M+4)

Settlement date plus 13 months (M+13)

Why?

Trading & Settlement Code requirement

Updated Meter Data for Non Price Effecting Generation and Demand (NPEG/NPED)

Low Materiality upheld Formal Settlement Queries

Ad hoc Resettlement

When?

As and when a High Materiality Formal Query has been upheld or post Month 13 upheld Formal Query

Why?

High Materiality = above Settlement Threshold

Changes to DQs, Meter Data, Availability etc

Who is impacted?

Potentially all Participants

Resettlement Timings


Supporting Information for Invoices

Ex. Post Indicative

CD+1WD1

Statements only

Allows Market to review & query Settlement data

Ex. Post Initial

CD +5WD2

Settlement Statements &

Invoices

Resettlement

CD +Month 4

Statements & Invoices

Based on Settlement changes from Initial

Resettlement

CD + Month13

Statements & Invoices

Based on Settlement

changes from M+4

*1 Or 3 WD after end of the Capacity Period for Capacity

*2 Or 7 WD after end of Capacity Period for Capacity


Invoice Payment Terms

Payment IN by 3 Working Days 12:00

Payment IN by 5 Working Days 17:00

Payment OUT by 4 Working Days 17:00

Energy &

Capacity

VMOC/ FMOC

Note: Resettlement Invoicing (ENG, CAP, VMOC) follows same timelines, however, Generators can receive Invoices which require payment IN to SEM Bank.


• Onus on Participant to meet all payments • Obligation to pay and then dispute, not withhold payment • Can receive up to 28 invoices per month • Default Notice will be issued • Credit Call made straightaway

Credit Risk Management


Credit Cover • Why have Credit Cover?

• Reduces financial risk to SEM should Participants default on payment

• In the event of a payment default, this credit cover can be used to

satisfy outstanding financial obligations to the market

• Required Credit Cover

• Calculated and revised each working day

• Credit Cover Increase Notices responded to within two working days

• Suppliers – Approx 4 weeks Charges

• Generators – Fixed Credit Cover (to cover resettlement)

• Approx 90% Energy, 10% Capacity

• How to Provide Credit Cover

• Letter of Credit (Bank Guarantee) and/or Cash Collateral Reserve


Credit Cover Increase Notice

Credit Cover Report published containing CCIN value

17:00 17:00 14:30 17:00

1st Working Day 2nd Working Day

How to remedy a CCIN

At any stage within the 2 Working Days a Participant can: • Submit increased collateral (cash or increased Letter of Credit value) • Pay Invoice(s) (before due date if necessary) • Enter into Settlement Reallocation(s)

If CCIN is not remedied by 17:00 2WD, Participant in Default & subject to

Suspension from Market


Market Rules


Market Obligations in the SEM

• Trading and Settlement Code (T&SC) • Legal document

• Participants agree to abide by the T&SC

• The Code documents the rules and obligations

of all participants in the SEM

Trading & Settlement Code on website

• Agreed Procedures (APs) • Appended to the Code

• Explain in more detail certain procedures

• Easier reading

• The Code takes priority over APs

Agreed Procedures on the website

• Changes to the Trading & Settlement Code and Agreed Procedures • Changes to either document can only made through the Modifications process

• Any Party in the Market can raise a Modification for consideration

• Details of the Modifications process and Form are available here

Modifications Forms and current/approved Modifications on the website


http://www.sem-o.com/MarketDevelopment/MarketRules/TSC.docx

http://www.sem-o.com/MarketDevelopment/Pages/MarketRules.aspx

http://www.sem-o.com/MarketDevelopment/Modifications/Pages/Modifications.aspx?Stage=Active

Registering in the SEM

• Can take up to 60 days once full paperwork received;

• All fees and Credit Cover requirements must be fulfilled prior

to trading in the SEM.

• All relevant information to assist you in joining the SEM is

available here:

http://www.sem-o.com/joiningthemarket/Pages/home.aspx





www.sem-o.com


Website

• Market Status

• Market Data

• Reporting on Market Performance

• Market Change

• Joining the Market

• Training

www.sem-o.com


http://www.sem-o.com/



Dynamic Reporting Provides publically available Market data

Market Data


Further Information

• Helicopter Guide

• Trading & Settlement Code

• www.sem-o.com

• www.allislandproject.org/en/SEM_overview.aspx

• www.cer.ie

• www.uregni.gov.uk





http://www.allislandproject.org/en/SEM_overview.aspx

http://www.cer.ie/

http://www.uregni.gov.uk/

DOCUMENT DISCLAIMER Every care and precaution is taken to ensure the accuracy of the information provided herein but such information is provided without warranties express, implied or otherwise howsoever arising and EirGrid plc and SONI Limited to the fullest extent permitted by law shall not be liable for any inaccuracies, errors, omissions or misleading information contained herein.


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