The new wholesale market is called the Integrated Single Electricity Market (I-SEM) and started 2018.
The new market will has brought SEM in line with other European markets and reduce the barriers to trade across Europe. The main difference between the SEM and I-SEM is the price of electricity in the SEM is determined for a stand-alone wholesale electricity market with regulated bidding. Whereas, the price of electricity in I-SEM will be determined as part of a greater integrated European solution with a more market based price formation through a number of different forward timeframes (Forward, Day-ahead, Intraday, Balancing).
The Market Committee’s decision (High Level Design), published in September 2015, forms the basis of I-SEM;
- Energy Trading Arrangements Detailed Design – Building Blocks Decision Paper
- Energy Trading Arrangements Detailed Design – Markets Decision Paper
Details to follow
The Day-ahead Market will consist of one auction for the sale and purchase of electricity. The price of electricity in the Day-ahead Market will be determined by a pricing algorithm called EUPHEMIA. Currently, the EUPHEMIA algorithm is used across 19 European countries to calculate electricity prices simultaneously. At the start of April 2018, I-SEM joined the other European electricity markets by implementing EUPHEMIA in the Day-ahead Market. One of the main benefits to EUPHEMIA is the increased electricity price convergence across Europe in the Day-ahead Market. The features and benefits of EUPHEMIA can be found here.
The Intraday Market is an important market for participants to ensure they are able to accommodate changes in generation/demand between the Day-ahead Market and real-time operation of the power system. This market will become more important with the growth of intermittent generation capacity (i.e. wind generation). The Intraday Market is a joint integrated cross-border market with other European countries. XBID is the software is used to calculate the price of electricity in the Intraday Market across Europe.
Balancing and Dispatch Market
The Balancing and Dispatch Market is used by the Transmission System Operators (TSOs) to ensure the security and stability of the I-SEM power system. The TSOs can change a participant’s Day-ahead Market or Intraday Market position if it is due to power system reasons. Out of the three markets, the Balancing and Dispatch Market is the only market that participation is mandatory.
Tynagh Energy is an active participant in the design and implementation of the I-SEM through its membership of the following working groups: Business Liaison, Technical Liaison, Project Management and Market Rules.