I-SEM DS3 System Services Procurement Implementation

The consultancy support covers review of international markets in order to draw lessons and recommend on procurement of system services for the Ireland and Northern-Ireland electricity market (SEM). The review covers product and contract design, procurement mechanisms and auction design and TSO incentive mechanisms and should recommend on costs minimization and market power mitigation for SEM.

The work was performed in a four step approach. In a first step a work plan was agreed on scope of work and approach. The scope of work was to review international markets on experiences with system services procurement in order to draw lessons for I-SEM with its very high system non-synchronous penetration level. In a second step, the system services procurement challenges for Ireland were described and international markets for review of system services procurement were selected and agreed. In a third step the selected international markets were reviewed on experiences with system services procurement to reduce costs and mitigate market power and the findings were used to formulate recommendation areas for I-SEM. In the fourth step, recommendations for I-SEM were developed.

With this work E-Bridge has provided the Irish regulators with the newest global insights regarding procurement of ancillary services required for the Irish synchronous area. Three categories of AS markets have been recommended to take into account the different procurement objectives related to the nature of the market for each of them: fast and normal frequency containment services, frequency restoration and reserve replacement services and voltage control services. For each of them different procurement strategies have been recommended. In particular for frequency restoration and replacement reserves we recommended a procurement framework as an integral part of the I-SEM Balancing Market design that meets the Irish requirements and is compatible with the European target model.

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