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I-SEM Chart of the Week

2018

Roundabout: Reducing complexity in DS3 Procurement

James Goldsmith Senior Consultant (Ireland)

The DS3 Fixed Contracts Procurement Arrangements Decision Paper, otherwise known as the long awaited DS3 paper, was released by the SEM Committee last week. The document outlines the framework for how the procurement of DS3 services will be carried out, and how the assessment of bids will be conducted. There are several key decisions in the paper that will hopefully provide some clarity for those looking to provide five of the DS3 system services, namely Fast Frequency Response (FFR), Primary Operating Reserve (POR), Secondary Operating Reserve (SOR), Tertiary Operating Reserve 1 (TOR1) and Tertiary Operating Reserve 2 (TOR2). This week’s I-SEM Chart of the Week looks at how the paper has made business cases more stable through simplification in the multipliers (scalars) that make up the payment calculation to service providers. These multipliers have been set for four values across all the services, a change from the sliding scales originally proposed for the bid assessment and final renumeration of service providers.  Mountains come out of the sky and stand there The first steps in simplifying the business case for potential service providers has been in clearly defining the product. The initial consultation paper left open room for different providers to offer different services at different rates, potentially adding a layer of complexity to an already reasonably complex set of services. Timelines to delivery have been extended to match the current delays in the procurement process. Contract execution is expected on 1 September 2019 with a delivery date of 1 September 2021. Contracts will ...

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