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 Capacity Market 

 

Introduction

In the current SEM, capacity providers receive payment for being available to generate electricity when required by the system. This is known as the Capacity Payment Mechanism (CPM). The new I-SEM arrangements are due to commence in October 2018. In the new I-SEM, the administratively determined CPM is being replaced with a competitively determined Capacity Market (CM). Much like the current process, the new CM will ensure that electricity generation in Ireland and Northern Ireland along with Interconnector capacity is sufficient to reliably meet demand, but in a more efficient manner. Unlike the CPM, capacity providers will only receive payments if they are successful in a Capacity Auction.

In advance of the Auction, the Regulatory Authorities (RAs) will approve the generation capacity required for a future Capacity Year. Capacity providers who are successful in the CM receive a regular Capacity Payment that assists with funding generation capacity and, in return, they have an obligation to generate when the system needs the capacity.


How Does It Work

Capacity Market Auctions are run for a specified Capacity Year. The timelines for each Auction are developed by the System Operators (SOs) and approved by the RAs. This takes into account processes for setting capacity requirements, along with local constraints and unit qualification. It also includes running the Auction and Post-Auction processes. Participants are notified when the timing for each Auction has been set by the SOs.

Participants can offer into a Capacity Market Auction ahead of the Capacity Year in which the capacity is to be delivered. A Capacity Year normally commences at the start of the trading day on 30 September and ends at the end of the trading day on 30 September in the following year.

In the long term, a Capacity Auction will be held four years (T-4) before a Capacity Year with additional Auctions for incremental capacity held closer to the Capacity Year, e.g. in the year prior to the Capacity Year start (T-1). The first T-4 Auction is scheduled to be held in March 2019 for a Capacity Year 4 years later. For the years prior to that Capacity Year, only T-1 Auctions are being held for each Capacity Year. The next T-1 Auction is scheduled to be held in December 2018. Please see links to the approved T-1 and T-4 Auctions Timetables in the Publications section below.


Who Can and Who Must Participate?

Participation is limited to current and future capacity providers on the island of Ireland, including Interconnectors that connect to the Ireland and Northern Ireland Systems. All existing Dispatchable Generators with a capacity above the De Minimis Threshold of 10 MW and all Interconnectors must apply to be qualified to participate in each Capacity Auction. Non-Dispatchable Generators, Dispatchable Generators with a capacity below the De Minimis Threshold, proposed new but not commissioned Dispatchable Generators with a capacity above the De Minimis Threshold, and Variable Generator units are not required to register or qualify in the Capacity Market but may do so voluntarily. Wind and solar generators fall under the Variable Generators category and are not required to register or qualify, but must do so if they wish to earn capacity remuneration.

New Capacity, which refers to capacity yet to be commissioned, must hold a Connection Offer before commencing the qualification process. Capacity yet to be commissioned could include new units or additional capacity for existing units. Full requirements are comprehensively detailed in the Capacity Market Code (CMC).

If a participant is registered under the CMC, but fails to qualify a unit when qualification is mandatory, then that unit will be qualified via the Alternative Qualification Process based on data held by the System Operators.


Capacity Market Platform

All Capacity Auctions will take place via an online program known as the Capacity Market Platform (CMP). CMP is provided by the vendor Unicorn Systems. Access to CMP is granted through the registration process. All users will require a user name, password and digital certificate in order to log into the CMP successfully.

There are three different user types within the CMP: Trading, Reporting and Administrative Users. Guides for each user role type can be found via the following links:

Capacity Market Participant – Trading User
Capacity Market Participant – Reporting User
Capacity Market Participant – Administrator User

How To Register?

Please see the Registration Process, including Registration and Qualification Forms for the Capacity Market here.

Additional Resources

For more resources or information on the Capacity Market please review the following documents:

Capacity Market: A Helicopter Guide to Understanding the Capacity Market
Capacity Market: The Quick Guide to Understanding Qualification
Capacity Market: A Helicopter Guide for the Capacity Auction
Capacity Market: Participant Guide for Completing Manual Offer Submissions
I-SEM Industry Guide
Information Session - Capacity Market and Registration
Capacity Auction: FAQ - Working Document

Publications

CAT1920T-1 Capacity Auction Timetable
Initial Auction Information Pack IAIP1920T-1
Final Auction Information Pack FAIP1920T-1 (due to be published on 30th November 2018)
CAT2223T-4 Capacity Auction Timetable
Initial Auction Information Pack IAIP2223T-4

Contact Details

If you have any questions in relation to the above information, please contact us through the following means:

Email Correspondence:


Phone Correspondence:
  

  • ROI: 1800 726772
  • NI: 0800 0726772
  • International:+353 (1) 2370584

 
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SEMO is a joint venture between EirGrid PLC and SONI Limited