Download I-SEM Rules WG Administered Scarcity Pricing Interim Legal Draft

14th July
2016
Administered
Scarcity Price –
Interim Draft Legal
Rules
Release Date
Version No.
Summary of Changes
02/06/2016
1.0
Initial legal draft for publication to market rules working group.
14/07/2016
2.0
Interim legal draft for publication to market rules working group.
1
PURPOSE
Following the recent CRM 2 decision on Administered Scarcity Pricing published on the 10th May
2016, this initial legal drafting paper expands the relevant paragraphs of the imbalance pricing legal
drafting to include a new appendix with details of the Administered Scarcity Pricing calculation.
2
SUMMARY OF SEM COMMITTEE DECISIONS
The SEM Committee’s second CRM decision included the following decisions in relation to
Administered Scarcity Pricing:
6.4.1 Administered Scarcity will be triggered when an event corresponding to any of Customer
Voltage Reduction, Planned or Emergency Manual Disconnection or Automatic Load Shedding either
as defined in the SONI Grid Code or a direct equivalent event defined in the Eirgrid Grid Code is
declared.
6.4.2 The RAs will investigate any events of Administered Scarcity which occur during operation of
the market.
6.4.3 Target Operating Reserve will be deemed to have been depleted if operating reserve (i.e. POR,
SOR, TOR1 and TOR2) cannot be replaced from replacement reserve or ramping margin within one
hour.
6.4.4 The value of FASP will be set at the Euphemia day ahead price cap of €3,000/MWh. This will
exist throughout the transition period; after which it will be based on VoLL. The exact percentage of
VoLL used will be defined at a later point in time, but will be no greater than 100%.
6.4.5 To ensure suitability, the VoLL calculation will be reviewed on a regular basis.
6.4.6 The piece-wise linear function will be static, with MW of operating reserve used as the basis for
its definition.
6.4.7 The price from which the function begins will be the Reliability Option Strike Price.
3
EXPLANATION OF PROPOSED TEXT
In keeping with the convention adopted for the I-SEM rules, all price variables commence with the
letter ‘P’. As such, the Administered Scarcity Price is referred to as PAS instead of ASP. Similarly for
the Full Administered Scarcity Price, PFAS is used instead of FASP.
The draft splits the calculation of the PAS into two processes: Demand Control Pricing and Reserve
Scarcity Pricing.
Demand Control applies where there is one of the following: Customer Voltage Reduction; Planned
or Emergency Manual Disconnection; or Automatic Load Shedding. Reserve Scarcity applies where
the availability of Short Term Reserves is less than the required Operating Reserves.
The drafting commences with a number of governing paragraphs which oblige the System Operator
and Market Operator to carry out various components of the Administered Scarcity Price calculation
including:
1.
2.
3.
4.
5.
6.
7.
Application of the RA approved Full Administered Scarcity Price by the MO
Determination of the Reserve Scarcity Price Curve by the MO
Calculation of Demand Control Quantities by the SO
Determination of Demand Control Bid Offer Acceptances by the MO
Determination of the Demand Control Price by the MO
Determination of the Reserve Scarcity Price by the MO
Determination of the Administered Scarcity Price by the MO
These paragraphs then refer to a more detailed calculation in the Appendix.
3.1
Application of the RA approved Full Administered Scarcity Price by the MO
This paragraph simply covers the value to use for the Full Administered Scarcity Price (PFAS)
3.2
Determination of the Reserve Scarcity Price Curve by the MO
These paragraphs cover the process of setting the Reserve Scarcity Price Curve. It is proposed that a
process similar to that used for other parameters is used. The Market Operator proposes a set of
values to the RAs. The Market Operator then applies the approved curve.
CRM2 goes into some detail about this curve that it should be piecewise linear function of MW of
operating reserve that can be restored within one hour.
3.3
Calculation of Demand Control Quantities by the SO
Where Demand Control event occurs, the SO calculates a Demand Control Quantity based on the
type of Demand Control that has occurred. For Customer Voltage Reduction and Automatic Load
Shedding, the reduction in Demand is calculated by taking the difference between the forecast
Demand and Actual Demand. This is to give the best estimate in the timescale of the Demand
Control Quantity. In the instance where the Forecast Demand is lower than the Actual Demand due
to Forecast Error, the Demand Control Quantity is set to 1MWh. Where Planned or Emergency
Manual Disconnection occurs the System Operator will submit a value based on the instructions to
the DSO. The transaction timelines etc. are proposed to be set out in Appendix K and that this
information would be provided prior to the calculation of the Imbalance Price.
3.4
Determination of Demand Control Bid Offer Acceptances by the MO
The Demand Control action is converted into a set of Bid Offer Acceptances so that it can be
processed with other quantities in the Imbalance Pricing Process. The PBO associated with the
Demand Control is set to Full Administered Scarcity Price for affected periods. Otherwise, it is set to
PFLOOR, which will ensure that it does not affect the price calculation.
3.5
Determination of the Demand Control Price by the MO
The Demand Control Price is set to the Full Administered Scarcity Price for affected periods.
Otherwise, it is set to PFLOOR, which ensures it does not affect the price.
3.6
Determination of the Reserve Scarcity Price by the MO
The reserve scarcity price is determined by calculating the applicable short term reserves (i.e.
operating reserves and reserves capable of replacing operating reserves within one hour). If this is
lower than the operating reserve requirement, the price corresponding to the quantity of short term
reserves is calculated based on the reserve scarcity price curve. Otherwise, the value is set to
PFLOOR, which ensures that the Reserve Scarcity Price does not impact on the price.
3.7
Determination of the Administered Scarcity Price by the MO
The Administered Scarcity Price is the max of the Demand Scarcity Price and the Reserve Scarcity
Price, which in most cases will be PFLOOR. This will then feed into the PIMB calculation which is the
max of the PIIMB coming from the stack and the Administered Scarcity Price. In most instances, this
will equal the PIIMB; however, where the PAS exceeds the PIIMB e.g. where there is Demand
Control, the PIMB will be set to PAS. Note: it is possible that the PIIMB exceeds the PAS in times of
Reserve Scarcity or Demand Control and so the PAS represents a floor to the imbalance price.
4
4.1
UPDATE FOR FINAL LEGAL DRAFTING
Grid Code definitions for Demand Control
The Demand Control events now refer to the specific sections of the relevant Grid Codes.
4.2
Other
Quantity of Demand Control equation has been developed to more clearly define the calculation
process.
Typo in 2.2.3 (a) QRS should have been written as QRSC.
I-SEM Rules
Trading and Settlement Code
ADMINISTERED SCARCITY PRICING
INTERIM LEGAL DRAFT
14th July 2016
A. RELEVANT PARAGRAPHS FROM IMBALANCE PRICING
2.1
Parameters
2.1.5
The Full Administered Scarcity Price (PFAS) is the value determined by the
Regulatory Authorities from time to time. The Market Operator shall publish
the approved value within 5 Working Days of the Regulatory Authorities’
determination or four months before the start of the Year or other period to
which the value is intended to apply, whichever is later.
2.1.6
The Market Operator shall determine the Reserve Scarcity Price Curve in
accordance with the detailed methodology set out in Appendix B –
Administered Scarcity Pricing.
3.2.2
For each affected Imbalance Pricing Period φ, the System Operator shall
determine Demand Control Quantities in accordance with the detailed
methodology set out in Appendix B – Administered Scarcity Pricing.
3.2.3
For each Imbalance Pricing Period φ, the Market Operator shall determine
Demand Control Bid Offer Acceptances in accordance with the detailed
methodology set out in Appendix B – Administered Scarcity Pricing.
3.7
Determination of Administered Scarcity Price
3.7.1
For each Imbalance Pricing Period φ, the Market Operator shall determine the
Demand Control Price (PDCφ) in accordance with the detailed methodology
set out in Appendix B – Administered Scarcity Pricing.
3.7.2
For each Imbalance Pricing Period φ, the Market Operator shall determine the
Reserve Scarcity Price (PRSφ) in accordance with the detailed methodology
set out in Appendix B – Administered Scarcity Pricing.
3.7.3
For each Imbalance Pricing Period φ, the Market Operator shall calculate the
Administered Scarcity Price (PASφ),
PASφ = Max (PDCφ , PRSφ )
where:
3.7.4
(a)
PDCφ is the Demand Control Price; and
(b)
PRSφ is the Reserve Scarcity Price.
For each Imbalance Pricing Period φ, the Market Operator shall calculate the
Imbalance Price (PIMBφ) as follows:
𝑃𝐼𝑀𝐵𝜑 = 𝑀𝑎𝑥 (𝑃𝐼𝐼𝑀𝐵𝜑 , 𝑃𝐴𝑆𝜑 )
provided that PIMBφ shall not exceed the Market Price Cap (PCAP) or be less
than the Market Price Floor (PFLOOR)
where:
(a)
PIIMBφ is the Initial Imbalance Price; and
(b)
PASφ is the Administered Scarcity Price
B. ADMINISTERED SCARCITY PRICING
1.
DEMAND CONTROL EVENTS
1.1
Determination of Demand Control Quantities
1.1.1
If any of the following Demand Control events occurs:
(a)
Customer Voltage Reduction in Northern Ireland, in accordance with
section OC4.4.5 of the Northern Ireland Grid Code,
(b)
Emergency or Exceptional Voltage Control, in Ireland in accordance
with OC4.4.6 of the Ireland Grid Code
(c)
Automatic Load Shedding in Northern Ireland, in accordance with
section OC4.4.8 of the Northern Ireland Grid Code,
(d)
Automatic Low Frequency Demand Disconnection in Ireland, in
accordance with section OC5.5 of the Ireland Grid Code,
(e)
Planned or Emergency Manual Disconnection in Northern Ireland, in
accordance with section OC4.4.6 of the Northern Ireland Grid Code, or
(f)
Demand Control on the instructions of the TSO in Ireland, in accordance
with section OC5.4 of the Ireland Grid Code.
then the relevant System Operator shall determine the Imbalance Pricing
Periods affected by the Demand Control event.
1.1.2
For each affected Imbalance Pricing Period φ, the relevant System Operator
shall also determine the Demand Control Quantity (QDCφ) as follows:
(a)
For Demand Control events set out in 1.1.1 (a), (b), (c) and (d):
QDCφ = Max ((QFLφ − QADφ ) × DIPP, 1)
where:
(i)
QFLφ is the Four Day Load Forecast applicable to Imbalance Price
Period φ;
(ii) QADφ is the Instantaneous Actual Demand at the beginning of the
Imbalance Price Period;
(iii) DIPP is the Duration of the Imbalance Price Period.
(b)
For Demand Control events set out in 1.1.1 (e) and (f), QDCφ shall be a
positive value determined based on the instructions provided to the
relevant DSO in respect of any Demand Control.
1.1.3
For each affected Imbalance Pricing Period φ, the System Operator shall
submit the Demand Control Quantity (QDCφ) to the Market Operator in
accordance with Appendix K.
1.2
Determination of Demand Control Bid Offer Acceptances
1.2.1
For each Imbalance Pricing Period φ, the Market Operator shall calculate an
Accepted Offer Quantity (QAOuoiφ) in respect of any Demand Control as
follows:
(a)
For an affected Imbalance Pricing Period, the Accepted Offer Quantity
(QAOuoiφ) is equal to the Demand Control Quantity (QDCφ); and
(b)
Otherwise, the Accepted Offer Quantity (QAOuoiφ) is zero.
1.2.2
For each affected Imbalance Pricing Period φ, the Market Operator shall
calculate a Bid Offer Price (PBOuoiφ) in respect of any Demand Control as
equal to the Full Administered Scarcity Price (PFAS).
1.3
Determination of Demand Control Price
1.3.1
For each Imbalance Pricing Period φ, the Market Operator shall calculate a
Demand Control Price (PDCφ) in respect of any Demand Control as follows:
(a)
For an affected Imbalance Pricing Period, the Demand Control Price
(PDCφ) is set equal to the Full Administered Scarcity Price (PFAS); and
(b)
Otherwise, the Demand Control Price (PDCφ) is set equal to Price
Floor (PFLOOR)
2.
RESERVE SCARCITY EVENTS
2.1
Determination of the Reserve Scarcity Price Curve
2.1.1
At the request of the Regulatory Authorities, the Market Operator shall
prepare and submit to the Regulatory Authorities for approval a proposed
piecewise linear Reserve Scarcity Price Curve based on the product of PFAS
and LOLP as a function of the Quantity of Short Term Reserve.
2.1.2
The Market Operator shall ensure that the proposed Reserve Scarcity Price
Curve is defined by a set of N strictly monotonically decreasing Reserve
Scarcity Price Quantity pairs (PRSCΘ, QRSCΘ) where Θ = 1 to N and:
(a)
PRSC1 = PFAS and QRSC1=0;
(b)
PRSCΘ < PRSCΘ-1 for Θ = 2 to N;
(c)
QRSCΘ > QRSCΘ-1 for Θ = 2 to N.
2.1.3
The Market Operator shall ensure that the proposed Reserve Scarcity Price
Curve conforms to any further requirements set by the Regulatory Authorities.
2.1.4
The Market Operator shall publish the approved Reserve Scarcity Price Curve
within 5 Working Days of receipt of the Regulatory Authorities' decision and
no later than two months before the approved value(s) shall come into effect.
2.2
Determination of the Reserve Scarcity Price
2.2.1
For each Imbalance Pricing Period φ, the Market Operator shall calculate the
Operating Reserve Requirement (RORφ) based on the operating reserve
requirements used for that period in the Real Time Dispatch System.
2.2.2
For each Imbalance Pricing Period φ, the Market Operator shall calculate the
Short Term Reserve Quantity (QSTRφ) based on available operating reserves
and reserves capable of replacing operating reserves within one hour in the
Real Time Dispatch System.
2.2.3
For each Imbalance Pricing Period φ, the Market Operator shall calculate the
Reserve Scarcity Price (PRSφ) as follows:
(a)
If QSTRφ<RORφ, the Market Operator shall calculate the value of Θ
that satisfies QRSCΘ-1 < QSTRφ ≤ QRSCΘ where 2 ≤ Θ ≤ N and then
calculate,
PRSφ = (
PRSCΘ − PRSCΘ−1
) × (QSTR φ − QRSCΘ−1 ) + PRSCΘ−1
QRSCΘ − QRSCΘ−1
Where (PRSCΘ, QRSCΘ) is the Θth price quantity pair in the Reserve
Scarcity Price Curve and QSTRφ is the Short Term Reserve Quantity for
Imbalance Pricing Period φ;
(b)
Otherwise, the Reserve Scarcity Price (RSPφ) is set equal to PFLOOR.