EA Ireland

The Design of Day-Ahead Auctions for System Services

An EirGrid and SONI consultation on the Day-Ahead Auctions for System Services (DASSA) closed on May 24th. This was an important consultation and is the first consultation by the TSOs (Transmission System Operators) on the full design of this new market and how it may work in practice. There was a public workshop held by EirGrid on 24th April which provided worked examples of how some of the market mechanisms work in practice.

System services are currently procured through a tariff system called DS3 whereby services that support the transmission of electric power from generators to consumer are remunerated through a system service tariff for that particular product. The Electricity Balancing Guidelines (EBGL) were published in 2017 with the objective of ensuring that the procurement of balancing services is fair, objective, transparent, and market based. This requires the TSOs to move the procurement of system services from tariffs to a market-based procurement.

The SEMC published a high-level design paper in May 2022 and then an implementation decision in December 2023, tasking the TSOs with designing a day-ahead system services market for the competitive procurement of services. This is envisioned as one part of the overall System Services Future Arrangements (SSFA) which is made up of DASSA, a layered procurement framework (LPF), and long-term contracts (LTC). At this point, what exactly the layered procurement framework means has not been fully defined and is currently not being consulted upon.

The Electricity Association of Ireland submitted a detailed response to the consultation’s 40 questions. Some of the high-level messages from the EAI were:

  • Concerns exist on the proposed amount of risk being placed on the service providers. The timing of the auction is quite close to other market auctions, especially the first of the daily European Intraday Auctions.
  • There are a number of areas, which are fundamental to the functioning of the market, that are subject to further consultation or are not consulted on within this document. These include product volumes, scalars, the design of firm access, and locational methodology for defining zones and associated constraints.
  • The need for a holistic picture of SSFA (DASSA, LPF, and LTC) and how they interact with one another. The volumes of various products that will be procured through each of the various workstreams needs to be more clearly defined. Greater guidance on how these different procurement mechanisms interact would allow industry to provide the most effective feedback on the future market arrangements.

For further information contact Aidan Hall at the EAI.