The SEM Committee has now published its final decision on the Parameters and Scalars underpinning the Day-Ahead System Services Auction (DASSA), marking an important milestone in the delivery of the Future Arrangements for System Services (FASS) programme. With DASSA expected to go live in 2027, these decisions move the framework from high-level design into detailed implementation.
The original consultation, led by the TSOs, sought to finalise a wide range of technical and commercial elements required for DASSA, including bid price caps, scarcity pricing, commitment obligations, compensation payments, and the structure of availability and delivery incentives. Given the breadth and complexity of the proposals, EAI members engaged closely throughout the process, recognising that these design choices will have a material impact on participation, investment confidence and, ultimately, consumer costs.
In our consultation response, we emphasised the importance of ensuring that the go-live arrangements for DASSA are practicable, transparent and proportionate. While we acknowledged the extensive analytical work undertaken by the TSOs, members raised concerns that certain aspects of the proposed incentive and penalty framework risked being overly complex and difficult for participants to manage in practice. In particular, there was unease around the cumulative and potentially punitive nature of delivery and availability incentives, especially where non-delivery could arise from factors outside a participant’s control.
These concerns were reinforced in subsequent correspondence with the Regulatory Authorities, including two letters to the SEM Committee ahead of their decision. A central issue raised by members was the proposed treatment of “TSO lapses” as well as the potential linkage between DASSA outcomes and Balancing Market bidding through commercial offer data. While such a linkage may have theoretical efficiency benefits, members highlighted the significant operational complexity, IT costs and risks this could introduce, potentially acting as a barrier to participation in DASSA .
We therefore welcomed the SEM Committee’s final decision not to proceed with linking DASSA outcomes directly to the Balancing Market at this stage, and in particular the decision to set the compensation payment to zero in the case of TSO-driven lapses. This directly reflects issues raised by industry and provides important reassurance as DASSA moves closer to implementation.
That said, there are important questions remain unresolved. We welcome the overall progress reflected in the decision but stress that clarity is still needed on whether participation in FASS and DASSA is intended to be mandatory or optional. Uncertainty around participation obligations undermines investment and operational decision-making. As implementation work continues, we believe it is essential that these questions are addressed transparently and through appropriate consultation. Clear boundaries between capability, availability and remunerated provision will be critical to ensuring that DASSA delivers a liquid, competitive market for system services without imposing disproportionate risks on participants.
We look forward to continuing constructive engagement with the SEM Committee, and the TSOs to support the successful delivery of DASSA and the wider FASS programme, while ensuring that the final arrangements are workable, investable, and aligned with the realities of operating the power system.