19/02/2016
Imbalance
Pricing
CONTENTS
1
2
Requirements .................................................................................................................................. 2
1.1
SEM Committee Decision........................................................................................................ 2
1.2
Requirements of I-SEM Flagging and Tagging Solution .......................................................... 3
Development and Discussion; ......................................................................................................... 4
2.1
3
Background on Flagging & Tagging ......................................................................................... 4
Implementation Proposal ............................................................................................................... 8
3.1
Flagging and Tagging Process.................................................................................................. 8
APPENDIX A: Draft Rules ....................................................................................................................... 25
APPENDIX B: Detailed Flagging Rules.................................................................................................... 28
1
1
REQUIREMENTS
1.1
SEM COMMITTEE DECISION
The SEM Committee decision on imbalance pricing is that the imbalance pricing approach should be
based on Flagging and Tagging.
From the SEM Committee decision:
“The SEM Committee sees merit in both dispatch based approaches, but on balance believes
that Flagging and Tagging is the most appropriate approach to delivering an imbalance price
that reflects the costs incurred by the TSO in energy balancing the system. The SEM Committee
anticipates that the I-SEM arrangements can draw on the GB experience. However, it notes that
there will be differences between the GB approach, and that developed in I-SEM, that will
reflect the characteristics of the I-SEM, which is a more constrained system than GB, and that
there will therefore be a number of implementation challenges. A working group will be
established, to consider the detailed implementation of Flagging and Tagging including the
setting of key parameters and the classification of energy and non-energy actions. The SEM
Committee considers that the arrangements should, insofar as possible be automated and
minimise the scope for any TSO subjectivity. Any possible back up arrangements should also fall
within the scope of this working group’s work.”
The Imbalance Pricing Process set out in this paper is based on the requirements set out in the paper
in particular that the flagging and tagging process should be used to identify the marginal energy
action taken and set the price accordingly.
This aligns with the ACER Recommendation 03-2015 on the Network Code on Electricity
Balancing where the text was explicitly changed to include the requirement that, “imbalances
are settled at a price that reflects the real-time value of energy”.
The SEM Committee decision included a summary of participants responses including that:
•
•
•
•
… imbalance prices should be based on the actions taken by the TSO to balance the system.
… the approach should be capable of delivering prices shortly after the trading period.
… any arrangements should not be overly influenced by any TSO subjectivity in determining
which actions, or parts of actions, are classified as non-energy and thus excluded from the
calculation of imbalance prices.
… the basis of the price calculation should be transparent.
Therefore, in response to participants views, the SEM Committee also decided that the
implementation of Flagging and Tagging in the I-SEM should include the greatest level of objectivity
that can be achieved. There are three key elements to this:
•
First, the process for the classification of actions taken by the TSOs needs to be clearly
documented, thus avoiding ambiguity.
2
•
•
Second, the processes put in place by the TSOs to tag out non-energy actions from the
calculation of imbalance prices must be published, and the TSO performance audited and
reported on annually.
Third, the SEMC considers that the implementation of Flagging and Tagging in TSO systems
should focus on solutions that are automated to the greatest extent practical.
The SEMC recognised that the detailed arrangements in I-SEM will be complex and will require
significant implementation effort because of the likely level of non-energy actions.
Taking the SEMC Decision that I-SEM Imbalance Pricing should be based on Flagging and Tagging, the
following section Requirements of I-SEM Flagging and Tagging Solution1.2 outlines the key
requirements arising from the decision.
1.2
REQUIREMENTS OF I-SEM FLAGGING AND TAGGING SOLUTION
Based on the SEM Committee Decision the Imbalance Pricing solution needs to have the following
characteristics.
1.2.1 EFFICIENT:
1. Marginal energy action taken to meet the NIV.
2. Based on actual dispatch / actions taken.
3. Mitigates imbalance price pollution by non-energy actions.
4. Mitigates spurious outcomes and/or excessive volatility.
5. Can produce prices within one hour of real time.
1.2.2 ROBUST & ADAPTABLE:
6. Builds on GB experience.
7. Adapted for non-energy requirements of I-SEM.
8. Not susceptible to over-tagging.
9. Capable of operating under changing market dynamics.
1.2.3 OBJECTIVE & TRANSPARENT:
10. Clearly documented process published.
11. Automated to the greatest extent practical.
12. Not be overly influenced by any TSO subjectivity.
3
2
DEVELOPMENT AND DISCUSSION;
2.1
BACKGROUND ON FLAGGING & TAGGING
The SEM Committee decision noted that the approach for I-SEM could build on the experience in the
GB market. Hence, this paper provides comparisons between the Flagging and Tagging approach in
GB and how that might applied or varied to suit I-SEM.
As is shown in Figure 1, GB Flagging & Tagging has evolved considerably since its initial development
in 2001. This evolution has taken into account the many changes that have occurred in the
underlying market architecture since then and many of the components of the mechanism today are
there due to legacy issues. An important part of this implementation process is to determine which
of the components of the current mechanism are needed for the I-SEM and which ones aren’t.
In addition, we need to take into account the direction of travel of the GB mechanism in relation to
the changes under the Electricity Balancing Significant Code Review process, which is coming to a
conclusion. These reforms include the move to a single imbalance price, a PAR of 1 by Nov 2018 and
the inclusion of Reserve Scarcity Pricing.
Figure 1 - History of Imbalance Pricing Arrangements in GB
2.1.1 COMPARISON BETWEEN THE I-SEM AND GB MARKETS
When considering GB as a starting point for the I-SEM imbalance pricing, it is important to recognise
the differences between the I-SEM and GB market designs. This will inform our thinking around
which components are required for I-SEM and which are not necessary. In addition, some of the
4
steps in the GB process need to be adapted to cater for differences in the market arrangements and
underlying physical system (e.g. the SO flagging and tagging process proposed for I-SEM is quite
different from GB).
The core components of the market arrangements are set out in the Table 1 below.
Table 1 - Comparison between I-SEM and GB market arrangements
Market Component
I-SEM
GB
Fowards
Financial
Physical
DAM
Market Coupling
Market Coupling
IDM
Market Coupling
Market Coupling
Imbalance Price
Single marginal price
Single PAR50 price
Imbalances
Pay-as-cleared
Pay-as -cleared
Scarcity Pricing
Reserve based*
Reserve based
BOAs
Pay-as-cleared
Pay-as-bid
Side Payments
Yes, for cost recovery
No
TSO Actions
BM
BM & Balancing Services
Non-energy actions
flagged
To be determined. Need to
consider all initially.
Transmission, intra-period,
emergency, SO-SO
Of particular note in the above table is the fact that GB bid offer acceptances are pay-as-bid whereas
in I-SEM they are pay-as-cleared with side payments (i.e. the greater of the offer and the imbalance
price for incs and the lesser of the offer and imbalance price for decs). This is important for two
reasons:
a. there is an incentive to reflect costs in offers as it maximises the chance of being scheduled and
earning inframarginal rent. This is in contrast to the pay-as-bid regime in GB where as they will
only be paid their offer, the incentive on market participants is to submit offers that chase the
marginal price. For this reason, there is likely to be greater downward pressure on offers in the ISEM than in GB, all other things being equal.
b. it means that the TSOs in I-SEM face similar incentives as market participants in the balancing
market i.e. to reduce insofar as possible the volume of trade that would be subject to higher
prices.
Also of importance is that in the I-SEM arrangements the balancing market is the only means by
which the TSO can manage operational constraints system. In GB on the other hand, the TSOs can
avail of the Balancing Market but also longer term Balancing Service Agreements.
2.1.2 ACTIONS FLAGGED AS NON-ENERGY ACTIONS IN GB
5
Figure 2 below sets out which of a typical set of non-energy actions would be flagged in GB. On the
right hand side of the figure, the process employed by National Grid for SO Flagging is shown. As can
be seen, many non-energy actions types are not covered by the SO flagging approach.
Figure 2- Typical Non-Energy Actions and GB Process
2.1.3 I-SEM NON-ENERGY REQUIREMENTS:
The below table sets out the types of security constraints typically present on the Ireland and
Northern Ireland systems. Non-energy actions could be taken for any of the below reasons among
others and, therefore, it is important that they are captured by the imbalance pricing process.
Table 2- Ireland and Northern Ireland Non-Energy Requirments
2.1.4 DEFINITIONS OF FLAGGING AND TAGGING IN GB
6
It is important from the outset to understand the distinction between flagging and tagging. A key
difference is that flagging identifies actions that should potentially be removed from the imbalance
price calculation, tagging removes the price and the volume of the action from the calculation. These
are set out in more detail in Figure 3.
Figure 3 - Flagging, Classification and Tagging
7
3
IMPLEMENTATION PROPOSAL
3.1
FLAGGING AND TAGGING PROCESS
3.1.1 OVERVIEW
The Imbalance Pricing process takes place immediately after the real time operation of the system
between the calculation of instruction profiles and quantities of bid/offer acceptances and before
the imbalance settlement process as shown in
Real Time
Dispatch
Application
Dispatch
Instructions
Instruction
Profiling
Quantities of
Bid / Offer
Acceptances
Imbalance
Pricing
Imbalance
Settlement
Figure 4 - Upstream and downstream processes from Imbalance Pricing
The Imbalance Pricing Process itself is made up of four distinct parts as set out in Figure 5. These are
developed in the next section.
Inputs
Ranked Set of Actions Taken, Real Time Dispatch System Outputs, Parameters
Flagging
SO flag, Non-marginal flag, Emergency Instruction flag, CADL flag
Classification
Price of Marginal Energy Action Taken, Replacement Prices
Tagging
De Minimis tag, NIV tag, PAR tag
Pricing
Administered Scarcity Price, Imbalance Price
Figure 5 - Imbalance Pricing Process
8
3.1.2 INPUTS
Table 3 sets out the main input variables, parameters and outputs from the Imbalance Pricing
Calculation.
Table 3 - Inputs, Parameters, Outputs
Type
Index
Index
Parameter
Parameter
Parameter
Parameter
Element
Long Name
Definition
Source
Units
Imbalance
Price Period
Index of Imbalance
Price Periods in
Imbalance
Settlement Period
QBOA calculator
none
k
Rank
Index of accepted
bids and offers in
ascending order
from lowest priced
bid to highest
priced offer
Imbalance
Pricing Process
IPPD
Imbalance
Price Period
Duration
Period over which
the price applies.
Proposed IPPD is 5
minutes.
Parameter
Decision
min
CADL
Continuous
Acceptance
Duration
Limit
Limit to flag very
short actions to
prevent them
setting the price.
Parameter
decision
min
DMAT
De Minimis
Acceptance
Threshold
Threshold to
remove low
volume actions
from pricing
process.
Parameter
decision
MWh
PAR
Price
Average
Reference
Volume over which
the imbalance
price is calculated.
Parameter
decision
MWh
φ
9
Type
Element
AO
Long Name
Definition
Source
Units
Accepted
Offer
Quantity
See Imbalance
Settlement
QBOA Calculator
MWh
Input value
Q
Input value
QABuoiφ
Accepted Bid
Quantity
See Imbalance
Settlement
QBOA Calculator
MWh
Input value
PBOuβoiφ
Bid Offer
Price
See Imbalance
Settlement
QBOA Calculator
€/MWh
Administered
Administered
Scarcity Price
Scarcity Price
Decision
CRM Decision 2
€/MWh
Administered Administered
Scarcity
Scarcity Price
Quantity
Decision
CRM Decision 2
MW
RTD System
MWh
Parameter
Parameter
P
AS
Q
uoiφ
iφ
AS
iφ
Input Value
𝑄𝑅𝑇𝐷𝑢𝜑
Real Time
Dispatch
Energy
Quantity
Quantity from the
TSO real time
dispatch system to
determine nonenergy actions.
Input Value
Real Time
Dispatch
𝑄𝑆𝑆𝑅𝑇𝐷𝑢𝜉𝜑 System
Service
Quantity
Quantity from the
TSO real time
dispatch system to
determine nonenergy actions.
RTD System
Varies
by
System
Service
Real Time
Dispatch
Energy
Requirement
Quantity from the
TSO real time
dispatch system to
determine nonenergy actions.
RTD System
MWh
Real Time
Dispatch
Quantity from the
TSO real time
RTD System
Varies
by
Input Value
𝑅𝑅𝑇𝐷𝑢𝜑
Input Value
𝑅𝑆𝑆𝑅𝑇𝐷𝑢𝜉𝜑
10
Type
Input Value
Input Value
Input Value
Input Value
Output
Output
Output
Element
𝑄𝑢𝑖𝜑
𝐻𝑂𝐿𝑢𝜑
𝐿𝑂𝐿𝑢𝜑
P
M
F
SO
F
NM
F
CADL
φ
ukφ
ukφ
ukφ
Long Name
Definition
Source
Units
System
Service
Requirement
dispatch system to
determine nonenergy actions.
Unit Bid
Offer
Breakpoints
Quantity from the
TSO real time
dispatch system to
determine nonmarginal actions.
RTD System
MW
Higher
Operating
Limit
Limit from the TSO
real time dispatch
system to
determine nonenergy / nonmarginal actions.
RTD System
MW
Lower
Operating
Limit
Limit from the TSO
real time dispatch
system to
determine nonenergy /nonmarginal actions.
RTD System
MW
Market Price
Price to be used
when no IMBP
exists.
Ex-ante
price
from DAM and
IDM.
SO flag
Flag used to
identify nonenergy actions.
Imbalance
Pricing Process
None
Nonmarginal flag
Flag used to
identify nonenergy actions.
Imbalance
Pricing Process
None
CADL flag
Flag used to
identify CADL
actions.
Imbalance
Pricing Process
None
System
Service
11
Type
Element
Long Name
Definition
Source
Units
Output
FFSukφ
First Stage
Flag
Product of other
flags
Imbalance
Pricing Process
None
FSOuξφ
Constraint
Flag
Flag used to
identify nonenergy actions due
to constraint ξ
Imbalance
Pricing Process
None
TDMukφ
De Minimis
Tag
Tag used to
remove actions
below De Minimis
Acceptance
Threshold
Imbalance
Pricing Process
None
TNIVuoiφ
Net
Imbalance
Volume Tag
Tag used to
remove nonenergy and nonmarginal actions
Imbalance
Pricing Process
None
TPARukφ
Price
Average
Reference
Tag
Tag used to
remove actions
that are outside
the Price Average
Reference
Imbalance
Pricing Process
None
RTAG
Residual
Tagged
Volume
Quantity used to
ensure equal
volumes of tagged
offers and bids.
Imbalance
Pricing Process
MWh
PMEATφ
Price of the
Marginal
Energy
Action Taken
Marginal
Imbalance Price
prior to the
application of PAR
Imbalance
Pricing Process
€/MWh
Imbalance
Price for
period 𝜑
Marginal
Imbalance Price
prior to the
Imbalance
Pricing Process
€/MWh
Output
Output
Output
Output
Output
Output
Outputs
P
IMB
φ
12
Type
Element
Long Name
Definition
Source
Units
Imbalance
Pricing Process
€/MWh
application of PAR
Outputs
PIMBγ
Imbalance
Price for
period 𝛾
Marginal
Imbalance Price for
Imbalance
Settlement Period
3.1.3 RANKING OF DISPATCH ACTIONS
The step involves sorting the actions taken based on their associated prices. Once we have
completed the flagging and tagging process, the most expensive unflagged action taken is the
marginal energy action taken.
Purpose in GB: Separate stacks of buy actions and sell actions, ordered in economic merit, are the
start point for the other aspects of the Flagging and Tagging process (some of which depend on the
order of actions in the stack).
Discussion: Ranked sets provide the fundamental functionality for marginal pricing, ensuring there is
a stack of actions from one extreme in price to the other.
Required for I-SEM? Yes; however, one ranked set may be preferable as there is a single imbalance
price. All decremental actions taken (decs) shall be ranked in order from lowest price first to highest
and numbered from 1 to M (number of decs). All incremental actions taken (incs) shall be ranked in
order of price from lowest first to highest and numbered from M+1 to N (number of incs). Following
each flagging or tagging step, this functionality is repeated.
Draft Rules
1.1
The Balancing Market Operator shall assign a rank (k) to all Accepted Bids (QABuoiφ,
PBOuoiφ) in order of Bid Offer Price (PBOuoiφ), lowest priced first, from k = 1 to M,
where M is the total number of Accepted Bids;
1.2
The Balancing Market Operator shall assign a rank (k) to all Accepted Offers
(QAOuoiφ, PBOuoiφ) in order of Bid Offer Price (PBOuoiφ), lowest priced first, from k =
M+1 to N, where M is the total number of Accepted Bids and N is the total number of
Accepted Bids and Accepted Offers;
3.1.4 FLAGGING
The following section concerns the application of flags to accepted orders in order to identify the
marginal energy action taken.
13
Flags are set equal to one initially and then set to zero where the flag is applied to an accepted
order. This convention is adopted for also tags so that multiplication by a tag in the price calculation
expressions will result in the retention of untagged actions (tag =1) and removal of tagged actions
(tag=0).
Draft Rules
2
Flagging
The Balancing Market Operator shall set initial values of SO Flag (FSOukφ), Nonmarginal Flag (FNMukφ), CADL Flag (FCADLukφ) and De Minimis Tag (TDMukφ) for
each Generator Unit u, all rank k and Imbalance Price Period φ to a value equal to
one;
2.1
3.1.4.1 SYSTEM OPERATOR FLAGGING
Purpose in GB: System Operator Flagging (SO-Flagging) is the process that identifies BOAs and
Balancing Services Adjustment Actions that are potentially taken for system balancing reasons. The
SO-Flagging process is documented in the System Management Action Flagging Methodology
Statement which is required under National Grid’s Transmission Licence.
For BOAs, the SO flags when it believes the BOA may be impacted by a transmission constraint.
For Balancing Services Adjustment Actions, the SO also flags when it believes the balancing action
was impacted by a transmission constraint. It also has two additional reasons for flagging a Balancing
Services Adjustment Action:


Any system-to-system balancing service over an Interconnector which is used to avoid
adverse effects arising on the GB Transmission System from significant load profile changes;
and
Any system-to-system balancing service over an Interconnector which is used by another
country’s Transmission System Operator (TSO) for the purposes of resolving a system
operation issue.
Discussion: As the main objective of Flagging and Tagging is to minimise the extent of price pollution
arising from non-energy actions on the energy imbalance price, SO Flagging is an important
component of the Imbalance Price calculation in I-SEM. In GB, whole units are flagged whenever
binding transmission constraints give rise to units being run out of merit. Transmission constraints
represent a subset of all non-energy actions as outlined in the previous section and consideration
needs to be given to how best to capture all of the non-energy requirements in I-SEM. In addition, in
order to automate the process and reduce TSO subjectivity in the flagging and tagging process, it is
necessary to adopt a different approach to that used in GB. This approach is set out in detail in
APPENDIX B: Detailed Flagging Rules.
Needed for I-SEM: Yes. SO Flagging will form an important part of the flagging and tagging process.
14
Draft Rules
2.2
The Balancing Market Operator shall flag actions taken for non-energy reasons by
setting SO Flag (FSOukφ) to a value of zero in line with the detailed methodology for the
application of SO Flags set out in Appendix B as follows: For all k, FSOukφ = Π FSOuξφ,
where Π is the product across all constraints ξ;
3.1.5 NON-MARGINAL FLAGGING
Purpose in GB: Non-marginal Flagging (NM-Flagging) is not a feature of the GB balancing
mechanism. Due to its origins as an average pricing mechanism which has progressively moved to a
more marginal pricing, the GB pricing mechanism does not feature specific functionality necessary to
identify the marginal energy action taken.
Discussion: When we talk about a marginal action, we mean an action whose cost is invariant for a
small increase and decrease in the size of the action. As the main objective of Flagging and Tagging is
to identify the marginal energy action taken, the process first considers the actions taken, then
removes non-energy actions to arrive at a set of energy actions taken and finally removes nonmarginal actions taken from the energy actions taken to arrive at the marginal energy action(s)
taken.
Without this step, a high priced energy action that is constrained could set the price. If we consider a
high priced incremental offer up to a unit’s min stable generation, the unit may submit a high priced
inc (e.g. €1000/MWh) over its min stable generation and min on time to ensure that it recovers its
fixed and no load costs. If the unit subsequently reduces its incremental offer for quantities above its
min stable generation to a level that reflects its variable cost only (e.g. €50/MWh), the TSO may
accept this offer partially to balance the remaining energy imbalance as it represents the least cost
action available. With the method proposed, both the higher priced offer and the lower priced offer
would both be considered energy actions taken. This step ensures that the energy action taken that
is bound by the units Min Stable Generation is prevented from setting the price as it does not reflect
the marginal cost of balancing the system, leaving the action at €50/MWh as the marginal energy
action taken.
Needed for I-SEM: Yes. Non-marginal flagging will form an important part of the flagging and tagging
process.
Draft Rules
2.3
The Balancing Market Operator shall flag actions taken that are non-marginal by setting
the Non-marginal Flag (FNMukφ) to a value of zero in line with the detailed
methodology for the application of Non-marginal Flags set out in Appendix B
15
3.1.5.1 EMERGENCY FLAGGING
Purpose in GB: To prevent the price from being set by actions taken due to events which were for
system reasons but outside of normal system actions captured under SO Flagging etc. The
emergency actions can be identified as flagged or unflagged actions.
Discussion: This is an area that will need to be defined over the course of the rules development
process in manner consistent with the emergency provisions of the Grid Code and associated
arrangements.
Required for I-SEM? Yes. To be defined in the SO Flagging process in Appendix B in line with
emergency procedures under the Grid Codes. It is proposed that these instructions are captured
under the SO Flagging process if they are for non-energy reasons or not flagged if they are for energy
reasons.
3.1.5.2 CADL FLAGGING
Purpose in GB: Remove sub half-hourly balancing actions from setting the price. Rationale is that the
costs of such actions (e.g. to resolve a 5 minute demand spike) cannot be accurately targeted given
that energy imbalances are only measured at the granularity of the imbalance settlement period (30
minutes in GB).
Discussion: Need to consider imbalance settlement period duration, and the granularity of other
flagging. Firstly, if the imbalance settlement period duration is to move to 15 minutes in the future,
CADL (should there be one) should move with it. It must be asked whether a CADL of 15 minutes
would be suitable given the intention to move towards that granularity. Also, if the imbalance price
period is on a lower level of granularity than the imbalance settlement period (e.g. 5 minutes - 15
minutes), then it may be appropriate to allow acceptances of this granularity to set the price.
Similar to this, if the price was to come from an average over the imbalance settlement period of
smaller granularity time periods (e.g. every 5 minutes within the settlement period, as is being
proposed), then there is potentially no need to CADL Flagging, as the impact of that one price on the
whole imbalance settlement period has been reduced in the calculation of an average.
Needed for I-SEM: Yes. Value of CADL to be determined as part of the consideration of all imbalance
price setting parameters. As proposed, if there are multiple Imbalance Price Periods within an
Imbalance Settlement Period – with the Imbalance Price equal to the average across the Imbalance
Price Periods in the Imbalance Settlement Period - then CADL arguably should be less than the
Imbalance Price Period.
Draft Rules
2.4
The Balancing Market Operator shall flag actions taken whose Continuous
Acceptance Duration is less than the Continuous Duration Acceptance Limit by
setting the CADL Flag (FCADLukφ) to a value of zero in line with the detailed
methodology for the application of CADL Flags set out in Appendix B
16
3.1.5.3 FIRST STAGE FLAG
This section simply sets a flag as the product of all the flags applied in the previous steps. If the first
stage flag for an action taken is zero, it means that the action taken is not the marginal energy action
taken. The flagged actions taken still may be included in the price calculation if it is not tagged in the
following section.
Draft Rules
2.5
The Balancing Market Operator shall calculate the First Stage Flag (FFSukφ) for
Generator Unit u, rank k and Imbalance Price Period φ as follows:
FFSukφ = FSOukφ FNMukφ FCADLukφ;
3.1.6 CLASSIFICATION
Purpose in GB: Allows all those flagged actions which are in merit in the ranked set (i.e. have more
economic prices than the marginal unflagged action) to be included in the volume-weighted
imbalance price.
Discussion: The price of the most expensive unflagged action is the marginal imbalance price. In
order to calculate the price over a Price Average Reference volume, it is necessary to unflag actions
that are in merit (i.e. are less expensive than the most expensive unflagged action).
Each flagged incremental action with a price greater than the price of the highest-priced unflagged
incremental action remains flagged and it becomes unpriced. Otherwise, it becomes unflagged and
its price is retained for the imbalance price calculation over the PAR volume. Similarly, each flagged
decremental action with a price less than the price of the lowest-priced unflagged decremental
action remains flagged and becomes unpriced. Otherwise, it becomes unflagged and its price is
retained for the imbalance price calculation over the PAR volume.
Needed in I-SEM? Yes; however, it is given effect by only including tagged volumes in the imbalance
price calculation with volumes that were flagged but not tagged being included. For actions where
the price is higher than the most expensive unflagged action, these units will be subject replacement
pricing whereas if the price of the action is lower than the most expensive unflagged action, the
actions price will be included in the pricing calculation (subject to tagging stage).
3.1.6.1 REPLACEMENT PRICE
Purpose in GB: Any remaining unpriced actions are repriced at the weighted average of the most
expensive 1MWh of unflagged actions (where there are no unflagged actions, a backup Market
Price1 is used). This is to ensure that all actions contributing to the NIV have a price but that this
price reflects the most expensive unflagged action rather than the original price of the flagged
action.
1
The backup Market Price is an index price from the ex-ante markets or equivalent.
17
Discussion: The use of a replacement price is intimately linked to the use of PAR. It ensures that the
imbalance is not unduely dampened by ensuring that the unpriced actions that contribute to
meeting the imbalance volume are priced equal to the most expensive unflagged action.
Needed for I-SEM: Yes. To be considered with PAR.
Replacement Buy Price is set by the most expensive unflagged action in the direction of the NIV. This
is the Price of the Marginal Energy Action Taken. If there are no unflagged system actions, it is set by
the backup Market Price.
Draft Rules
3
3.1
Classification
The Balancing Market Operator shall calculate the Net Imbalance Volume (NIVφ) as
follows:
NIVφ= ∑QAOukφ +∑QABukφ;
3.2
The Balancing Market Operator shall calculate the Price of the Marginal Energy
Action Taken (PMEATukφ) as follows:
If NIVφ>0, PMEATukφ=Max(PBOukφFFSukφ)
If NIVφ<0, PMEATukφ=Min(PBOukφFFSukφ)
3.3
The Balancing Market Operator shall calculate Replaced Bid Offer Prices (PRBOukφ)
as follows:
If NIVφ>0, PRBOukφ=Min(PBOukφ, PMEATukφ);
If NIVφ<0, PRBOukφ=Max(PBOukφ, PMEATukφ);
3.1.7 TAGGING
The following section concerns the application of tags to accepted bids and offers in order to identify
the energy actions taken including the marginal energy action taken are to be included in the
Imbalance Price calculation. Note: in the absence of PAR, the Imbalance Price would be based on the
Marginal Energy Action Taken. If PAR > 0, the Imbalance Price is calculated across the Price Average
Reference of Energy Actions Taken including the Marginal Energy Actions Taken.
3.1.7.1 DE MINIMIS TAGGING
Purpose in GB: Prevents very small volumes arising in the half-hourly integration of dispatch
instructions from influencing the price.
Each accepted offer, or bid, or buy action or sell action, the absolute value of the volume (QAOuoih
or QABuoih) which is less than the De Minimis Acceptance Threshold (DMAT) is De Minimis Tagged.
18
Discussion: Could be useful in many cases, e.g. if a dispatch profile strays briefly into a certain
expensive band region as the profile is intended to bring the unit to its FPN to end the acceptance,
and the only reason why the profile strayed into that band region is because of the technical
limitations of the unit rather than consciously wishing to incur an order at that price, it could be
unfair to allow that order to set the price for the whole imbalance settlement period.
De Minimis actions may already be captured by CADL flagging, should that be implemented. The
case where units would, as a whole, only be instructed by amounts this small is unlikely to arise, but
what could arise is that a unit could be instructed, as a whole, by a relatively large amount, but one
part of the instruction is only barely within a band, leading to the volume of the total instruction
applicable to this band being very small. It may be appropriate to allow this to set the price if it was
not spurious, e.g. if the unit was instructed to output at that level and kept there over the imbalance
settlement period, this could be the marginal unit of energy.
There could be an incentive to use resubmitting of inc/dec curves to influence price setting - using it
in a way which changes the quantity bands only slightly so that a continuous acceptance following
the initial closed acceptance would result in an order of a slightly higher price being accepted. This
change could be made only small enough that the outcomes from the scheduling systems may not
result in the TSO giving an instruction to slightly reduce the output of the unit to prevent this
acceptance. If De Minimis tagging were implemented, it would remove this potential incentive.
Required for I-SEM: Yes. De Minimis Tagging to be included in I-SEM. Value of DMAT to be
determined as part of the consideration of all imbalance price setting parameters.
Draft Rules
4
4.1
Tagging
The Balancing Market Operator shall tag actions taken whose absolute quantity is less
than the De Minimis Acceptance Threshold (DMAT) by setting the De Minimis Tag
(TDMukφ) to a value of zero;
3.1.7.2 NIV TAGGING
Purpose in GB: NIV is defined in GB as the difference between the sum of the volumes of the system
buy actions, and the negative of the sum of the system sell actions. The NIV in I-SEM is consistent
with this definition. NIV Tagging is used to identify the energy actions taken to meet the Net
Imbalance Volume by netting the most expensive incremental and decremental actions until there
are only actions in one direction and that the remaining volume is equal to the NIV.
If the absolute value of the sum of the volumes of the system sell actions is less than or equal to the
sum of the volumes of the system buy actions, then all system sell actions are NIV tagged. All system
buy actions up until the last one (going from from most to least expensive) where the system sell
action volume interacts, and the fraction of the last system buy action which brings the total volume
19
of system buy actions considered equal to the volume of the NIV tagged system sell actions, are also
NIV tagged.
Vice versa applies if the absolute value of the sum of the volumes of system sell actions is greater
than the sum of the volumes of system buy actions: All system buy actions are NIV tagged, and
system sell actions (in whole or the fraction required of the last one, going from least to most
expensive) up to the volume of NIV tagged system buy actions are also NIV tagged.
Discussion: It is important to recognise the history of the GB arrangements and that NIV tagging was
introduced shortly after the NETA reforms and many years prior to the introduction of SO flagging.
NIV tagging was in many respects a proxy for SO Flagging but makes the assumption that the energy
balancing actions were the cheapest actions; however, this is often not the case (e.g. if a peaking
unit is brought on at very short notice at a high price).
In line with the SEMC decision, in order to arrive at, “an imbalance price that reflects the costs
incurred by the TSO in energy balancing the system”, it is necessary to preserve these higher
cost energy actions where they represent the marginal energy action taken. With the more
comprehensive SO flagging process being proposed for I-SEM, we propose a variation of NIV tagging
(previously referred to as SO Tagging but now combined with combined with GB NIV Tagging) that
nets flagged actions taken in the opposite direction to the NIV firstly from flagged actions in the
direction of the NIV and then from the highest priced unflagged actions to arrive at a set of NIV
Tagged actions that sum to zero and a residual set of untagged actions that sum to the NIV.
In addition, the proposed approach also accounts for situations where actions in opposite direction
to the NIV are the marginal energy action. For example, where there are no non-energy actions and
a unit is brought on to its min stable generation, necessitating backing off a cheaper unit to make
room for the more expensive unit’s min stable generation. In this case, the decremental action is the
marginal energy action taken and the proposed methodology accounts for this situation.
This is a more general form of NIV tagging that takes into account the more comprehensive
information available to the SO in relation non-energy actions and the marginal pricing design of the
I-SEM where the imbalance price is based on the marginal energy action taken.
Needed for I-SEM? Yes; however, the approach proposed for I-SEM is more general to the GB NIV
tagging approach in that it protects the marginal energy action taken for situations where higher
priced energy actions and energy actions in the opposite direction to the NIV are the marginal
energy action taken. For situations where the marginal energy action taken is a lower priced action
in the direction of the NIV, the outcome would be the same as NIV tagging.
Draft Rules
4.2
4.2.1
The Balancing Market Operator shall calculate NIV Tag (TNIVukφ) for Generator
Unit u, rank k and Imbalance Price Period φ as follows:
Set initial values of TNIVukφ = FFSukφTDMukφ;
20
4.2.2
Let RTAGφ=-(∑QABukφ(1- TNIVukφ) + ∑QAOukφ(1- TNIVukφ));
4.2.3
If ∑QABukφ TNIVukφ ≤ RTAGφ < 0:
4.2.3.1
Find b and β, RTAGφ = ∑k<bQABukφ TNIVukφ +βk=bQABukφ TNIVukφ;
4.2.3.2
Set TNIVukφ =0 for all k = 1 to b-1, TNIVukφ = 1 – β for k = b;
4.2.4
If RTAGφ < ∑QABukφ TNIVukφ:
4.2.4.1
Set TNIVukφ =0 for all k = 1 to M;
4.2.4.2
Find b and β, -RTAGφ = ∑k<bQAOukφ(1- TNIVukφ)+βk=bQAOukφ(1- TNIVukφ);
4.2.4.3
Set TNIVukφ =1 for all k = M+1 to b-1, TNIVukφ = 1 – β for k = b;
4.2.5
If 0< RTAGφ ≤∑QAOukφ TNIVukφ:
4.2.5.1
Find b and β, RTAGφ = ∑k>bQAOukφ TNIVukφ +βk=bQAOukφ TNIVukφ;
4.2.5.2
Set TNIVukφ =0 for all k = b+1 to N, TNIVukφ = 1 – β for k = b;
4.2.6
If RTAGφ > ∑QAOukφ TNIVukφ:
4.2.6.1
Set TNIVukφ =0 for all k = M+1 to N;
4.2.6.2
Find b and β, -RTAGφ = ∑k>bQABukφ(1- TNIVukφ)+βk=bQABukφ(1- TNIVukφ);
4.2.6.3
Set TNIVukφ =1 for all k = b+1 to M, TNIVukφ = 1 – β for k = b;
3.1.7.3 PAR TAGGING
Purpose in GB: The last tagging process is Price Average Reference (PAR) Tagging.
In GB, the original purpose of the PAR Tagging mechanism was to more closely align the main energy
imbalance price with the price of the marginal energy balancing action (i.e. the most expensive
action taken by the SO to balance total energy supply and demand). It is important to note that GB
has moved progressively from average pricing, to chunky marginal pricing (PAR 500, PAR50) and
intends to move to marginal pricing in 2018.
The imbalance price is calculated based on the volume-weighted average of a defined volume of the
most expensive remaining unflagged actions. In GB, as of 5th Nov 2015, this defined volume is
50MWh moving to 1MWh from 1st Nov 2018.
Discussion: The SEM Committee decision sets out that the following in relation to PAR:




Preference for marginal imbalance price.
Suite of pricing parameters to be considered by Working Group (e.g. CADL, DMAT, PAR)
Some averaging may be permitted if evidence based and time limited.
Should not unduely dampen imbalance price.
21
From the comments submitted by participants, it is clear that there is an appetite for a PAR at least
on a transitional basis. In order to facilitate further consideration of the need for PAR, we propose to
include the functionality in the imbalance price calculation.
Needed in I-SEM? Functionality for PAR will be included in the pricing calculation and whether it is
used can be determined during the process for setting the imbalance price setting parameters.
Draft Rules
4.3
The Balancing Market Operator shall calculate the value PAR Tag (TPARukφ) for
Generator Unit u, rank k and Imbalance Price Period φ as follows:
4.3.1
Set TPARukφ=TNIVukφ;
4.3.2
Let GIVφ=∑QAOukφTNIVukφ -∑QABukφTNIVukφ;.
4.3.3
If GIVφ>PAR and NIVφ>0:
4.3.3.1
Find b and β, PAR = ∑k>bQAOukφ TPARukφ + β k=bQAOukφ TPARukφ∑k>bQABukφTPARukφ-βk=bQABukφ TPARukφ;
4.3.3.2
Set TPARukφ =0 for all k = 1 to b-1, TPARukφ = β for k = b;
4.3.4
If GIVφ>PAR and NIVφ<0,
4.3.4.1
Find b and β, PAR = ∑k<bQAOukφTPARukφ + β k=bQAOukφTPARukφ∑k<bQABukφTPARukφ-βk=bQABukφ TPARukφ;
4.3.4.2
Set TPARukφ =0 for all k = b+1 to N, TPARukφ = β for k = b;
4.4
The Balancing Market Operator shall calculate the Second Stage Tag (TSSukφ) for
Generator Unit u, rank k and Imbalance Price Period φ as follows:
TSSukφ = TDMukφ TNIVukφ TPARukφ;
3.1.8 PRICING
3.1.8.1 BUY PRICE ADJUSTMENT /SELL PRICE ADJUSTMENT
3.1.8.1.1
START COSTS
Purpose in GB: Used to reflect balancing services agreement prices in the imbalance price. STOR
contract components being replaced by Reserve Scarcity Pricing of activated reserves at the
beginning of Flagging and Tagging Process.
Discussion: One of the areas where the GB arrangements differ from the I-SEM arrangement
concerns the ability of the TSO in GB to access balancing services outside of the balancing
mechanism. The balancing mechanism in GB does not commence until one hour ahead of each
22
balancing period. The I-SEM on the other hand features an extended balancing market that runs in
parallel to the intraday market and this period prior to hour ahead is the timeframe where the TSOs
have to ensure that the system is secure and within operational security limits.
Based on the SEM Committee decision, for actions taken prior to gate closure, generator units’
offers should be able to reflect their start and no load costs; for actions after gate closure, all costs
should be reflected in one simple set of inc and decs.
Actions taken prior to gate closure will therefore have start and no-load cost components and if
these need to be reflected in the imbalance price, they could be introduced at this stage. It is likely
that most actions taken prior to gate closure will be for non-energy reasons and thus these costs are
unlikely to impact on the imbalance price; however, this is an area that can be kept under review to
ensure that the imbalance price is cost reflective.
Needed in I-SEM? No provision is required for recovery of explicit Start Costs and No Load Costs
through the price. In line with the detailed design decision, any early actions by the TSOs shall only
be taken for reasons of system security, priority dispatch or other statutory reasons. As these actions
are flagged and tagged, they cannot set the price.
3.1.8.1.2
SCARCITY PRICE
To be developed when decisions related to administered scarcity pricing as part of the second CRM
consultation are published.
3.1.8.2 LOSS ADJUSTMENT FACTORS
Purpose in GB: The BOAs used to calculate the main energy imbalance price are adjusted for
transmission losses. This is done in the final calculation (see below). Balancing Services Adjustment
Actions are adjusted by the SO before they are sent to the BSC Systems.
Discussion: The loss adjustment of volumes in the imbalance pricing process is only relevant where
PAR is used. The weighted average across a PAR volume is further weighted by the relevant
transmission loss adjustment factors.
Needed in I-SEM? Yes. The application of loss adjustment factors in the imbalance pricing process is
to be developed further with their overall application in the Imbalance Settlement Process.
23
3.1.8.3 IMBALANCE PRICE
The imbalance price is calculated as the weighted average across the actions that are not PAR
tagged.
Draft Rules
5
5.1
Imbalance Price Calculation
The Balancing Market Operator shall calculate Imbalance Price (PIMBφ) as follows:
PIMBφ=(ΣPRBOukφQAOukφTSSukφ-ΣPRBOukφQABukφTSSukφ)/(ΣQAOukφTSSukφΣQABukφTSSukφ);
24
APPENDIX A: DRAFT RULES
1
Inputs and Pre-Processing
1.1
The Balancing Market Operator shall assign a rank (k) to all Accepted Bids (QABuoiφ,
PBOuoiφ) in order of Bid Offer Price (PBOuoiφ), lowest priced first, from k = 1 to M,
where M is the total number of Accepted Bids;
1.2
The Balancing Market Operator shall assign a rank (k) to all Accepted Offers
(QAOuoiφ, PBOuoiφ) in order of Bid Offer Price (PBOuoiφ), lowest priced first, from k =
M+1 to N, where M is the total number of Accepted Bids and N is the total number of
Accepted Bids and Accepted Offers;
2
Flagging
2.1
The Balancing Market Operator shall set initial values of SO Flag (FSOukφ), Nonmarginal Flag (FNMukφ), CADL Flag (FCADLukφ) and De Minimis Tag (TDMukφ) for
each Generator Unit u, rank k and Imbalance Price Period φ to a value equal to one;
2.2
The Balancing Market Operator shall flag actions taken for non-energy reasons by
setting SO Flag (FSOukφ) to a value of zero in line with the detailed methodology for the
application of SO Flags set out in Appendix B as follows: For all k, FSOukφ = Π FSOuξφ,
where Π is the product across all constraints ξ;
2.3
The Balancing Market Operator shall flag actions taken that are non-marginal by setting
the Non-marginal Flag (FNMukφ) to a value of zero in line with the detailed
methodology for the application of Non-marginal Flags set out in Appendix B
2.4
The Balancing Market Operator shall flag actions taken whose Continuous
Acceptance Duration is less than the Continuous Duration Acceptance Limit by
setting the CADL Flag (FCADLukφ) to a value of zero in line with the detailed
methodology for the application of CADL Flags set out in Appendix B;
2.5
The Balancing Market Operator shall calculate the First Stage Flag (FFSukφ) for
Generator Unit u, rank k and Imbalance Price Period φ as follows:
FFSukφ = FSOukφ FNMukφ FCADLukφ;
3
3.1
Classification
The Balancing Market Operator shall calculate the Net Imbalance Volume (NIVφ) as
follows:
NIVφ= ∑QAOukφ +∑QABukφ;
3.2
The Balancing Market Operator shall calculate the Price of the Marginal Energy
Action Taken (PMEATukφ) as follows:
25
If NIVφ>0, PMEATukφ=Max(PBOukφFFSukφ)
If NIVφ<0, PMEATukφ=Min(PBOukφFFSukφ)
The Balancing Market Operator shall calculate Replaced Bid Offer Prices (PRBOukφ)
as follows:
3.3
If NIVφ>0, PRBOukφ=Min(PBOukφ, PMEATukφ);
If NIVφ<0, PRBOukφ=Max(PBOukφ, PMEATukφ);
4
Tagging
4.1
The Balancing Market Operator shall tag actions taken whose absolute quantity is less
than the De Minimis Acceptance Threshold (DMAT) by setting the De Minimis Tag
(TDMukφ) to a value of zero;
4.2
The Balancing Market Operator shall calculate NIV Tag (TNIVukφ) for Generator
Unit u, rank k and Imbalance Price Period φ as follows:
4.2.1
Set initial values of TNIVukφ = FFSukφTDMukφ;
4.2.2
Let RTAGφ=-(∑QABukφ(1- TNIVukφ) + ∑QAOukφ(1- TNIVukφ));
4.2.3
If ∑QABukφ TNIVukφ ≤ RTAGφ < 0:
4.2.3.1
Find b and β, RTAGφ = ∑k<bQABukφ TNIVukφ +βk=bQABukφ TNIVukφ;
4.2.3.2
Set TNIVukφ =0 for all k = 1 to b-1, TNIVukφ = 1 – β for k = b;
4.2.4
If RTAGφ < ∑QABukφ TNIVukφ:
4.2.4.1
Set TNIVukφ =0 for all k = 1 to M;
4.2.4.2
Find b and β, -RTAGφ = ∑k<bQAOukφ(1- TNIVukφ)+βk=bQAOukφ(1- TNIVukφ);
4.2.4.3
Set TNIVukφ =1 for all k = M+1 to b-1, TNIVukφ = 1 – β for k = b;
4.2.5
If 0< RTAGφ ≤∑QAOukφ TNIVukφ:
4.2.5.1
Find b and β, RTAGφ = ∑k>bQAOukφ TNIVukφ +βk=bQAOukφ TNIVukφ;
4.2.5.2
Set TNIVukφ =0 for all k = b+1 to N, TNIVukφ = 1 – β for k = b;
4.2.6
If RTAGφ > ∑QAOukφ TNIVukφ:
4.2.6.1
Set TNIVukφ =0 for all k = M+1 to N;
4.2.6.2
Find b and β, -RTAGφ = ∑k>bQABukφ(1- TNIVukφ)+βk=bQABukφ(1- TNIVukφ);
4.2.6.3
Set TNIVukφ =1 for all k = b+1 to M, TNIVukφ = 1 – β for k = b;
26
4.2.7
The Balancing Market Operator shall calculate the value PAR Tag (TPARukφ) for
Generator Unit u, rank k and Imbalance Price Period φ as follows:
4.2.8
Set TPARukφ=TNIVukφ;
4.2.9
Let GIVφ=∑QAOukφTNIVukφ -∑QABukφTNIVukφ;.
4.2.10 If GIVφ>PAR and NIVφ>0:
4.2.10.1 Find b and β, PAR = ∑k>bQAOukφ TPARukφ + β k=bQAOukφ TPARukφ∑k>bQABukφTPARukφ-βk=bQABukφ TPARukφ;
4.2.10.2 Set TPARukφ =0 for all k = 1 to b-1, TPARukφ = β for k = b;
4.2.11 If GIVφ>PAR and NIVφ<0,
4.2.11.1 Find b and β, PAR = ∑k<bQAOukφTPARukφ + β k=bQAOukφTPARukφ∑k<bQABukφTPARukφ-βk=bQABukφ TPARukφ;
4.2.11.2 Set TPARukφ =0 for all k = b+1 to N, TPARukφ = β for k = b;
4.3
The Balancing Market Operator shall calculate the Second Stage Tag (TSSukφ) for
Generator Unit u, rank k and Imbalance Price Period φ as follows:
5
TSSukφ = TDMukφ TNIVukφ TPARukφ;
6
Imbalance Price Calculation
6.1
The Balancing Market Operator shall calculate Imbalance Price (PIMBφ) as follows:
PIMBφ=(ΣPRBOukφQAOukφTSSukφ-ΣPRBOukφQABukφTSSukφ)/(ΣQAOukφTSSukφΣQABukφTSSukφ)
27
APPENDIX B: DETAILED FLAGGING RULES
This Appendix sets out the flagging rules that would be required today based on the Operational
Constraints Update published by the TSOs in Oct 2015. The rules to be applied on any particular day
will need to reflect the constraints used in the Real Time Dispatch system that is used to inform
dispatch decisions.
6.2
The Balancing Market Operator will set the Constraint Flag (FSOuξφ) for Generator
Unit u, Operational Constraint ξ and Imbalance Price Period φ equal to zero for all
units where the following conditions are true.
TOTAL OPERATING AND REPLACEMENT RESERVES
For Primary Operating Reserve (𝜉 = 1), Secondary Operating Reserve (𝜉 = 2), Tertiary Operating
Reserve I (𝜉 = 3), Tertiary Operating Reserve II (𝜉 = 4) and Replacement Reserve (𝜉 = 5):
1(a): ∑𝑢∗ 𝑄𝑆𝑆𝑅𝑇𝐷𝑢𝜉𝜑 = κξ max𝑢 𝑄𝑅𝑇𝐷𝑢𝜑 … (1𝐴) 𝑎𝑛𝑑
1(b): For units u*: 𝑄𝑅𝑇𝐷𝑢𝜑 + 𝑄𝑆𝑆𝑅𝑇𝐷𝑢𝜉𝜑 = 𝐻𝑂𝐿𝑢𝜑 𝑜𝑟 𝑄𝑅𝑇𝐷𝑢𝜑 = 𝐿𝑂𝐿𝑢𝜑
Where Σ𝑢∗ is the sum over all generator units u excluding the largest infeed (max𝑢 𝑄𝑅𝑇𝐷𝑢𝜑 ) and κξ is
the percentage of the largest infeed to be covered by the reserve requirement.
The algebra in this rule set defines a set of tests to determine whether a particular action was taken
for reserve reasons. The first test checks if the total requirement for the operating reserve in
question is binding (i.e. the amount being provided exactly equals the amount required). This
indicates whether the reserve requirement is resulting in non-energy actions. The second test checks
if the action taken is bound by the reserve constraint. The is more clearly illustrated in the next slide.
Figure 0-1 - If ORi is binding, unit is only bound if change in output reduces ORi provision
28
Figure 0-1 shows a typical reserve characteristic for a generator unit. The unit has to be on at min
stable level to provide the operating reserve. The unit can provide its max operating reserve up to
the level where the headroom starts to decrease for every increase in unit output. If the first NER1
test is true (i.e. the operating reserve is binding) then the second test is only true if the actions
places the unit in the area indicated by the red line. In this area (or at LOL), the unit cannot change
its output in both directions without resulting in a reserve shortfall.
The concept that the unit has to be able to move in both directions is important. A binding
requirement arises from two forces pushing up against each other – on one side we have the
economic force and on the other we have the force of the requirement. In the above diagram, if the
unit was in merit to be at its HOL but it was needed for its max operating reserve, the unit would be
dispatched to point where the green line becomes red slopes downwards. At this point, the
economic force is pushing the units output upwards to its HOL and the reserve requirement force is
pushing its output downwards to get max operational reserve (but it stops at this point because it
gets no additional reserve). The economic force acts on the unit until its output is at the most
economic level and in the absence of any requirements in the opposite direction, the unit will move
to this level and the economic force will cease to apply. A limit or requirement that prevents the unit
from achieving its most economic level causes the units to be at a level that is not the most
economically efficient. As it is extremely unlikely that a limit or requirement would be at the exact
same point as the economically efficient point, it follows that units that are bound by limits or
requirements are not marginal i.e. they are not the last action taken.
3.1.8.4 MINIMUM OPERATING AND REPLACEMENT RESERVES
For minimum Primary Operating Reserve (𝜉 = 6), Secondary Operating Reserve (𝜉 = 7), Tertiary
Operating Reserve I (𝜉 = 8), Tertiary Operating Reserve II (𝜉 = 9) and Replacement Reserve
(𝜉 = 10) in Ireland and minimum Primary Operating Reserve (𝜉 = 11), Secondary Operating
Reserve (𝜉 = 12), Tertiary Operating Reserve I (𝜉 = 13), Tertiary Operating Reserve II (𝜉 = 14) and
Replacement Reserve (𝜉 = 15) in Northern Ireland:
2(a): ∑𝑢+ 𝑄𝑆𝑆𝑅𝑇𝐷𝑢𝜉𝜑 = 𝑅𝑆𝑆𝑅𝑇𝐷𝜉𝜑 and
2(b): For units u+: 𝑄𝑅𝑇𝐷𝑢𝜑 + 𝑄𝑆𝑆𝑅𝑇𝐷𝑢𝜉𝜑 = 𝐻𝑂𝐿𝑢𝜑 𝑜𝑟 𝑄𝑅𝑇𝐷𝑢𝜑 = 𝐿𝑂𝐿𝑢𝜑
Where Σ𝑢+ is the sum over all generator units u in Ireland (ξ=6-10) and Northern Ireland (ξ=11-15).
3.1.8.5 NEGATIVE RESERVES IRELAND AND NORTHERN IRELAND
For Negative Reserve in Ireland (𝜉 = 16) and Negative Reserve in Northern Ireland (𝜉 = 17):
3(a): ∑𝑢+ 𝑄𝑆𝑆𝑅𝑇𝐷𝑢𝜉𝜑 = 𝑅𝑆𝑆𝑅𝑇𝐷𝜉𝜑 and
3(b): For units u+: 𝑄𝑅𝑇𝐷𝑢𝜑 + 𝑄𝑆𝑆𝑅𝑇𝐷𝑢𝜉𝜑 = 𝐿𝑂𝐿𝑢𝜑
Where Σ𝑢+ is the sum over all generator units u in Ireland (𝜉 = 16) and Northern Ireland (𝜉 = 17).
3.1.8.6 SYSTEM NON SYNCHRONOUS PENETRATION
For System Non-Synchronous Penetration limits (ξ=18):
4(a):
∑𝑊𝑖𝑛𝑑 𝑄𝑅𝑇𝐷𝑢𝜑 +∑𝐼𝑚𝑝𝑜𝑟𝑡𝑠 𝑄𝑅𝑇𝐷𝑢𝜑
𝑅𝑅𝑇𝐷𝑢𝜑 +∑𝐸𝑥𝑝𝑜𝑟𝑡𝑠 𝑄𝑅𝑇𝐷𝑢𝜑
= 𝑆𝑁𝑆𝑃 𝐿𝑖𝑚𝑖𝑡
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Where Σ𝑊𝑖𝑛𝑑 is the sum over all wind generator units, Σ𝐼𝑚𝑝𝑜𝑟𝑡 is the sum over interconnector
imports and Σ𝐸𝑥𝑝𝑜𝑟𝑡 is the sum over interconnector exports.
3.1.8.7 INERTIA
For the System Inertia requirement (ξ=19):
5(a): ∑𝑢 𝑄𝑆𝑆𝑅𝑇𝐷𝑢𝜉𝜑 = 𝑅𝑆𝑆𝑅𝑇𝐷𝜉𝜑 and
5(b): For units u: 𝑄𝑅𝑇𝐷𝑢𝜑 + 𝑄𝑆𝑆𝑅𝑇𝐷𝑢𝜉𝜑 = 𝐿𝑂𝐿𝑢𝜑
3.1.8.8 IRELAND AND NORTHERN IRELAND DYNAMIC AND VOLTAGE STABILITY
For Northern Ireland System Stability (ξ=20), Ireland System Stability (ξ=21), North West Generation
(ξ=22), Kilroot Generation (ξ=23), Dublin Generation 1 (ξ=24), Dublin Generation 2 (ξ=25), Dublin
Generation 3 (ξ=26), Dublin North Generation (ξ=27), Dublin South Generation (ξ=28), South
Generation (ξ=29), Moneypoint (ξ=30) constraints:
6(a): ∑𝑢∗ 𝑄𝑆𝑆𝑅𝑇𝐷𝑢𝜉𝜑 = 𝑅𝑆𝑆𝑅𝑇𝐷𝜉𝜑 and
6(b): For units u*: 𝑄𝑅𝑇𝐷𝑢𝜑 = 𝐿𝑂𝐿𝑢𝜑
Where Σ𝑢∗ is the sum across all the units u* in the constraint.
3.1.8.9 IRELAND AND NORTHERN IRELAND UNIT LIMITS
For limits on units needed for Replacement Reserves in Ireland (ξ=31), Replacement Reserve in
Northern Ireland (ξ=32), Ballylumford Generation (ξ=33), Moyle Export (ξ=34), Moyle Import (ξ=35),
Cork Generation (ξ=36) and South Generation (ξ=37), EWIC Import (ξ=38), EWIC Export (ξ=39),
Turlough Hill Import (ξ=40), Turlough Hill Export (ξ=41) and Hydro Smolt Protocol (ξ=42).
7(a): ∑𝑢∗ 𝑄𝑆𝑆𝑅𝑇𝐷𝑢𝜉𝜑 = 𝑅𝑆𝑆𝑅𝑇𝐷𝜉𝜑
Where Σ𝑢∗ is the sum across all the relevant units u* in Replacement Reserves in Ireland (ξ=31),
Replacement Reserve in Northern Ireland (ξ=32), Ballylumford Generation (ξ=33), Moyle Export
(ξ=34), Moyle Import (ξ=35), Cork Generation (ξ=36) and South Generation (ξ=37), EWIC Import
(ξ=38), EWIC Export (ξ=39), Turlough Hill Import (ξ=40), Turlough Hill Export (ξ=41) and Hydro Smolt
Protocol (ξ=42).
3.1.9 NON-MARGINAL FLAGGING
Each Accepted Bid or Accepted Offer shall have their Non-Marginal Flag (𝐹𝑁𝑀𝑢𝜑) set equal to one if
any of the following sets of criteria are satisfied:
𝑄𝑅𝑇𝐷𝑢 = 𝐿𝑂𝐿𝑢𝜑 or 𝑄𝑅𝑇𝐷𝑢 = 𝐻𝑂𝐿𝑢𝜑 or 𝑄𝑅𝑇𝐷𝑢 = 𝑄𝑢𝑖𝑜𝜑
3.1.10 CADL FLAGGING
Detailed CADL Flagging Method will be developed further based on the detailed methodology for
Instruction Profiling.
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