SEM experience to date and the impacts for the future Sean McGoldrick, General Manager SEMO.
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Transcript of SEM experience to date and the impacts for the future Sean McGoldrick, General Manager SEMO.
SEM experience to date and the impacts for the futureSean McGoldrick, General Manager SEMO
SEM Overview
Mandatory Pool
All energy sold into and bought from the pool
Typically 48 Trading Periods (30 mins) per Trading Day
Separate physical energy trades are not permitted
Timeframes
Energy Payments
Meter
Data
Dispatch
Real Time
Indicative Running Schedule
16:00 D-1
Operating Time Frame (TSOs)
Bids
10:00 D-1
Gate closure
Indicative
Market Schedule
12:00 D-1Market Time
Frame (SEMO)
Uninstructed Imbalances
Constraint Payments
Ex-Post Unconstrained
Schedule (EPUS)
16.00 D+1, 17.00 D+4
Energy Payments
Meter
Data
Meter
Data
Dispatch
Real Time
Dispatch
Real Time
Indicative Running Schedule
16:00 D-1
Operating Time Frame (TSOs)
Bids
10:00 D-1
Gate closure
Indicative
Market Schedule
12:00 D-1Market Time
Frame (SEMO)
Uninstructed ImbalancesUninstructed Imbalances
Constraint PaymentsConstraint Payments
Ex-Post Unconstrained
Schedule (EPUS)
16.00 D+1, 17.00 D+4
Electricity Market High Level Overview
Initial Daily
Schedules, Prices and Settlement
MP
Met
erT
SO
SE
MO
Publish
Forecasts
Submit
Bid
Offers
Produce
Indicative
Schedule and Price
Collect
Real Time
Data
Follow
Control
Instructions
Run
System
Real Time
Invoice
Weekly
Position
Financially
Settle
Position
D-2 D-1 D D+1 D+4 Weekly
Review
Position
Provide final
Meter Data
Indicative
Schedules, Prices and Settlement
Provide available
Meter Data
Participants in the SEM
45 Participants have registered in SEM
31 Participants have registered Generator Units
10 Participants have registered Interconnector Units
Registered Capacity in the Market: 9856 MW
Predictable Price Maker:
8567 MW
Variable Price Maker: None
Predictable Price Taker:
346 MW (All Peat)
Variable Price Taker: 157 MW (All wind)
Autonomous: 786 MW 781 MW wind 5 MW of biomass landfill gas
generation
Some Participants
Airtricity Energy Supply NI Ltd GU + SU
Airtricity Ltd GU + SU
Arklow Energy Ltd GU
Aughinish Alumina Ltd GU + SU
Ballywater Wind Farms GU
Bord Gais Eireann SU
Bordnamona Energy Ltd GU
CHP Supply Ltd SU
Coolkeeragh ESB Ltd GU
ESB Customer Supply GU + SU
ESB Independent Energy NI GU + SU
ESB Independent Energy ROI SU
ESB Power Generation GU + SU
First Electric Ltd GU
Hibernian Wind Power Ltd GU
Highland Wind Energy GU
Huntstown Power Company Ltd GU
Interconnector Administrator SONI N/A
Mantlin Ltd GU
Mountain Lodge GU
Moyle Energy Holdings IU
Muinngnaminine Windfarms Ltd GU
NIE Power Procurement Business GU
NIE Supply SU
Premier Power Ltd GU
Quinn Energy Supply Ltd SU
Quinn Windfarms Ltd GU
Saorgus Energy Ltd GU
Sorne Wind Ltd GU
SSE (Ireland) Limited IU
Synergen Power GU
Tursillagh 2 Windfarms Ltd GU
Tynagh Energy Limited GU
Vayu Ltd SU
Viridian Energy Limited SU
Viridian Energy Supply Ltd GU + SU
Viridian Power Limited GU
Waterpower Engineering Ltd SU
Market Share Trend – Generators
- 100000
0
100000
200000
300000
400000
500000
600000
700000
50
51
52 1 2 3 4 5 6 7 8 9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
2007 2008
Airtricity Energy Supply NI Ltd Generation
Airtricity Ltd Generation
Arklow Energy Ltd
Aughinish Alumina Ltd
Ballywater Windfarms Ltd
Bord Gais I nterconnector
Coolkeeragh ESB Ltd. Generator
Edenderry Power Ltd.
ESB AER
ESB I ndependent Energy NI I nterconnector
ESB PGEN
First Electric Ltd
Hibernian Wind Power Ltd
Huntstown Power Company Ltd
Knockawarriga Windfarms Limited
Mantlin Limited
Mountain Lodge Limited
Muingnaminnane Windfarm Limited
NI E Energy (PPB)
NI E Energy (Supply) Generation
Premier Power Limited
Snugborough Windfarm RoI Limited
Sorne Wind Limited
SSE (I reland) Ltd.
Synergen
Tursillagh 2 Ltd
Tursillagh Windfarms Ltd
Tynagh Energy Limited
Viridian Energy Limited
Viridian Energy Supply Ltd
Market Share Trend – Suppliers
0
50000
100000
150000
200000
250000
300000
350000
45
46
47
48
49
50
51
52 1 2 3 4 5 6 7 8 9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
2007 2008
Airtricity Energy Supply NI Limited
Airtricity Ltd Supply
Aughinish Alumina Ltd
Bord Gais NI
Bord Gais ROI
CHP Supply Ltd.
Dan Twomey Waterpower Engineering Ltd.
ESB CUSTOMER SUPPLY _PES
ESB Customer Supply ASU
ESB I ndependent Energy NI Supply
ESB I ndependent Energy ROI Supply
ESB PGEN Supply
NI E Energy (Supply)
Quinn Supply Limited
Quinn Windfarm Limited
Viridian Energy Limited
Viridian Energy Supply Ltd
SEM Financial
CashflowGenerator Unit in SEM
Energy Payments:
- Paid System Marginal Price (SMP) for energy scheduled by the market in each half hour
- Settled on a weekly basis
Capacity payments:
- Paid for available capacity in each half hour
- Settled on a monthly basis
Other payments
- Constraint payments (+/-) If TSO dispatch differs from market schedule
- Uninstructed imbalances (+/-) If metered generation doesn’t correspond to dispatched output
- Make Whole Payments (+) If costs incurred are not recovered through other market payments
- All settled on a weekly basis
Other charges
- Currency Charges (Weekly & Monthly)
- Market Operator charges (Weekly – variable, Monthly – fixed)
- Unsecured Bad Debt charges
- Generator Under test charges
CashflowSupplier Unit in SEM
Energy Charges:
- Pay System Marginal Price (SMP) for energy consumed (MWh) in each half hour
- Settled on a weekly basis
Capacity Charges:
- Charge based on consumption of energy (MWh) in each half hour
- Used to pay Generator Units for capacity
- Settled on a monthly basis
Other charges:
- Imperfections charges: Charge per MWh of energy consumed
- Currency Charges
- Market Operator charges
System Marginal Price by Trading PeriodJanuary 2008 to August 2008
0
100
200
300
400
500
600
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48
Trading Period
€/M
Wh
Mean + 1σ Mean - 1σ Max SMP Mean SMP Min SMP
Tightly Banded!
Financial Summary
SEMO will process Energy Payments of approximately €4/£3 Billion annually
A further €600/£461 Million in Capacity Payments annually
The market remains fully collateralised
It holds collateral, in the form of Letters of Credit and Cash deposits, from supply companies of approximately €320/£246 Million
It prices the market and processes payments in two currencies (Euro and Sterling)
To date SEMO has processed over €800/£615 Million in payments
- 800 Million in, 800 Million out, with 1 day turnaround between
SEMO’s annual operating cost, including depreciation, is €25/£19.2 Million
SEM IT
IT Systems
The SEMO IT systems provide a modern, open, e-business, n-tier platform architecture to provide maximum scalability, availability, resilience, performance, reliability and stability to enable mission critical operations for the SEM
The key components of the solution are:
- Market Interface System provides the interfaces for information exchange with the SEM systems – i.e. interaction with Market Participants, Meter Data Providers, and System Operators
- Market Applications System that provides the scheduling and pricing mechanisms
- Market Settlement System that provides the meter data management, settlement, and billing and invoicing functions
- Finance System that provides financial processing capabilities including credit management and electronic funds transfer
IT Systems
The SEMO corporate and market systems consist of approximately 120 servers across two sites (Belfast & Dublin).
There are also a large number of applications, backup devices, storage devices, communications equipment and other peripheral equipment.
The systems are fully redundant across two separate locations connected by 2 high speed dedicated links.
The systems can be run entirely at either location or a mix of both locations.
The main systems were delivered by 3 independent vendors with in excess of 30 smaller vendors supplying hardware, software and other systems.
IT Capabilities
SEMO Website
SEM Future
Development potential
Financial Market
- Physical trading remains the same
- Players CFDs outside pool
- Currently, there are Directed Contracts and Non-Directed Contracts
- Greater liquidity required
SEM lightly interconnected to BETTA
Moyle HVDC 500MW Import 80MW Export…technically capable of 500MW export
Future interconnectors planned
- Regulated: EirGrid 2012
- Merchant: Imera 2011
- Both aim to be commissioned by 2012
Explicit Auctions
- Moyle and EirGrid short and medium term
- Imera long term
Expansion/Integration:Options
A. Unified Pan-European solution: employing a centrally legislated and harmonised approach. Significant change from the present approaches.
B. Horizontal Integration: Market regions progressively merge, developing and sharing more efficient coupling mechanisms and leading to fewer, larger market regions.
C. ‘Dome’ Coupling: where a central entity or function is created to determine efficient flows between the coupled market regions (that each utilise their own mechanisms to resolve inter-regional flows and market prices).
7 Regions
- France, UK, Ireland
- SEM has linked NI and ROI
- Integration with UK and France?
SEM/BETTA Comparison
SEM BETTA
Gross Mandatory Pool
-For energy; capacity payments mechanism
-Anticipated development of CFDs, etc.
Bilateral Market
-With central balancing mechanism and settlement for imbalances
Gate Closure: Day ahead Gate Closure: One hour ahead
Central Dispatch – Merit Order Self-Dispatch
Explicit Capacity Payment Mechanism
No Capacity Payment Mechanism
Ex-Post System Marginal Price (for every half hour)
Separate System Buy Price (paid by
participants who are “short”) and System Sell Price (paid by those who are “long”) for each half hour
SEM/BETTA Comparison cont.
SEM BETTA
No central notification of bilateral contracts
Bilateral volume contracts for each half hour notified up to 1 hour ahead
Dual currencies - €/£
Currency exchange costs socialised
Single currency - £
Settlement and Invoicing
-Weekly billing periods
-Payment due 10 days after invoice
-Capacity settled on monthly basis
Settlement and Invoicing
-Each settlement day
-Payment due 29 days after invoice
Credit Policy: aims for full collateral cover of known and forecast liabilities
Credit Policy: aims for full collateral cover of known and assessed liabilities
SEM/BETTA Comparison cont.
SEM BETTA
GOVERNANCE
SEM Committee (Regulatory Authorities and two independent members)
Independent Panel: key role in decision making and proposals to regulator
Rules in published code (TSC) Rules in published code (BSC); overseen by Independent Panel
Market Operator (SEMO)
-Joint venture between two system operators
Market Operator (ELEXON)
-Independent subsidiary of system operator
-Managed by Independent Board
Change Process
-Defined in TSC; final authority on modification proposals lies with the Regulatory Authorities
Change Process
-Defined in BSC; final authority on modification proposals lies with regulator
OPERATIONAL
SEMO uses agents to develop systems, but operates them itself
ELEXON makes use of agents that develop and operate systems
Future of SEM
Greater Coupling with BETTA
- Facilitates larger/faster penetration of renewable energy in both markets
Integration and creation of an All Islands/Regional Market
Return to a Bilateral Market?
- Market share of incumbents reduced
- Less transparent
- Greater Competition in retail and wholesale markets?
- Both Generation and Supply arms in energy companies
Extension of Gross Mandatory Pool?
- Significantly increased collateral requirement
Summary
SEM Experience to Date
The market has been launched on time and within budget
The Market has operated successfully in its first 11 months
A number of major software releases have been successfully put into production without interfering with the market schedule
13 new participants have joined the SEM since market launch
Market Development continues (Over 150 Modifications considered since market launch, single design authority, redesigned website, market system development plan in place)
Further Details
Thank You
Questions Welcome
For further details on the Single Electricity Market please see:
www.sem-o.com