Market Integration Project Agenda Background Market Integration Project
Market Integration Project
Agenda • Background – – – • Market Integration Project – – – • • • Single Electricity Market Organisation EU Internal Energy Market Context for Market Design Project Timetable Main Risks Options under consideration Option Detail Engagement Next Steps 2
Single Electricity Market Organisation 3
Current SEMC Members • • Bill Emery (UR) David Newbery (Independent) Dermot Nolan (CER) Garrett Blaney (CER) Odd Håkon Hoelsæter (Independent) Paul Mc. Gowan (CER) Jenny Pyper (UR) http: //www. allislandproject. org/ 4
EU Internal Energy Market EU energy policy aims – Improve competitiveness to reduce prices to consumers Maintain security of supply Sustainable Vision of decarbonising Europe 5
EU Internal Energy Market – Third Energy Package (IME 3). – Target Model for cross-border trading rules. – This requirement is legally binding and is therefore the responsibility of the national states. – (DETI) and (DCENR) respectively have charged the SEM Committee (SEMC) with responsibility for developing trading arrangements that will be compliant with the Target Model. 6
Context for Market Design Target Model SEM
Context for Market Design – Size of the Irish electricity market – Physical Constraints ◦ ◦ Limited DC interconnection 2 nd North / South Interconnector Donegal Cork – Market power ◦ ◦ ESB generation portfolio all island (50%) AES in NI (70%) – Renewable energy 40% target (NI Executive and Ro. I target) 8
Context for Market Design Peak demand of selected European markets in 2012 9
Context for Market Design Generation capacity by owner 10
Context for Market Design + - Target Model Compatible Suitable to ROI/NI + Suitable to ROI/NI SEM - Target Model Compatible 11
Context for Market Design 12
Project Timeline • • Started 2010 Intra day trading introduced 2011 Consideration Day Ahead Market trading Delivery date of 2014 Derogation of implementation to 2016 for SEM May 2013 Next Steps Paper February 2014: Consultation Paper 2 months on 4 options 13
Project Governance 14
Project Timeline • • May 2014 Proposed Decision Consultation CBA of Proposed Decision August 2014: Final Decision High Level Design Future work areas – – – Legislative change Consultation Detailed Design Systems development / regulatory framework 15
Options Under Consideration 1. Adapted Decentralised Market – Emphasis on allowing market participants greater choice over the markets and timeframes in which they trade energy in order to manage their risk. 2. Mandatory Ex-post pool for net volumes – Some choice for market participants around their trading times, but ultimately relies on a robust centralised approach to the determination of dispatch and ex -post prices and volumes 3. Mandatory Centralised Market – emphasises the importance of the Day Ahead Market as the main market for physical trading of energy between market participants. Balance takes place in day. 4. Gross Pool – Net Settlement Market – Centralised approach to the determination of dispatch and ex-post prices and volumes. It is open for market participants to carry out voluntary financial trading in other timeframes. Closest to current market. 16
Project Main Risks • Infringement of member state (non compliance 2016) • Market not fully effective leading to increased prices for customers • Issues– – – EU Codes and guidance not finalised (state aid concerns) Effective stakeholder engagement Market Design agreement required by both Departments / Ras Legislative change requirements Resource constraints Industry, TSOs and Departments Very compressed timescales for delivery 17
Questions? 18
Option Detail
Option 1
Option 2
Option 3
Option 4
Questions? 24
Stakeholder Engagement
Engagement • Main Stakeholder Groups – – – • Market Participants SEM Committee Departments Regulators EU organizations (ACER/EC). Open Stakeholder forums – – • October 2013 February 2014 (19 th Provisional Date) High Level Design Group (Industry Experts Group) – Monthly Meetings since October 2013 26
Questions? 27
Next Steps
Project Timeline • • • February 2014 Consultation 4 options 19 th February Stakeholder Workshop May 2014 Proposed Decision Consultation – • • Cost benefit Analysis Included August 2014: Final Decision High Level Design Future work areas – – Detailed Market Design (Inter Alia: CRM, treatment of losses, Market Power Mitigation Measures) Legislative change Consultation Detailed Design Systems development / regulatory framework 29
Questions? 30
- Slides: 30