On 22 December 2015, the Single Electricity Market (SEM) Committee published its consultation on the auction design for DS3 system services in Ireland. The consultation paper is accompanied by a detailed auction design report prepared by DotEcon for the Transmission System Operators (TSOs), which is also available here.
Ireland’s DS3 programme (Delivering a Secure, Sustainable Electricity System) aims to maintain the security of the electricity system while achieving renewable electricity targets. A key part of the programme is to ensure that the TSO is able to procure the required system services, such as reserve, and that it can do so efficiently.
The SEM Committee had previously issued a decision on the high-level auction design for system services, including relatively novel features such as the use of annual auctions and long-term contracts. DotEcon’s report considers the auction design in more detail and provides recommendations in relation to the contractual obligations imposed on winning bidders, the payment basis for winning and losing bidders who provide system services to the TSO, the specification of the TSO’s volume requirement, the bidding parameters available to bidders, the determination of winners and prices, and the treatment of short- and long-term contracts. The proposed auction design takes into account the potential interaction between the system services auction and other markets (namely the capacity market, the energy market and the balancing mechanism).