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SEM Chart of the Week

2019

All Along the Watchtower – pricing disputes in SEM

Evie Doherty Senior Consultant (Ireland)

As we enter the fourth month of the new SEM market, it is already starting to feel a little like business as usual. There are still indications of high balancing price volatility and the odd surprise in the day-ahead (e.g. €365/MWh on 2 January 2019), not to mention continued liquidity issues in the intraday continuous market. However, little by little issues are being flagged, investigated and resolved. This week’s chart of the week looks at some of the errors in the balancing market that are being investigated by SEMO since the market go-live date. There’s too much confusion As of 11 December 2018, EirGrid has informed the market of a total of nine errors in the balancing market. Some of the issues have had an effect on Imbalance Settlement prices, and SEMO is aiming to feed corrections into the resettlement process, which will occur about four months after the event. Figure 1 gives a list of the errors thus far under investigation, and for which pricing disputes are being upheld. The System Operators (SOs) have a responsibility to ensure that electricity supply and demand is balanced in real-time, but in an economic way. This is done using a combination of scheduling and dispatching of units to generate a certain output for a given time, as well as using the balancing market to fill in any close-to-real-time gaps or “imbalances” between supply and demand. Market participants can offer to increase or bid to decrease their generation output in ...

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