Tilted – high pricing in the Balancing Market

Since the launch of the new SEM market a topic which has undergone a great deal of scrutiny, discussion and investigation (not least by Cornwall Insight Ireland) has concerned the Balancing Market, and specifically how the balancing price (aka Imbalance Settlement Price) is calculated. 

The latest twist in the tale occurred last week on 24 January when at 11.41am SONI (System Operator in Northern Ireland) issued an amber alert due to generation losses in NI. The alert was raised due to an unplanned outage of a plant in combination with low levels of renewables. The Moyle interconnector was exporting electricity due to demand in GB and constraints on the North-South tie-in between Ireland and NI limited the amount of electricity which could be imported into NI. The highest balancing prices recorded this day peaked at €3774/MWh; more than double the highest price seen previously since market go-live. In this week’s chart we look at the prices involved and consider some of the factors involved in their calculation.

Related thinking

Announcement

The top 5 podcasts of 2020

We released 13 podcasts in 2020 covering all aspects of the energy market, from the Capacity Market and Electric Vehicles to Faster Switching and heat networks. Here are our top five podcasts of the year, ranked by the number of people who listened. 5. The Impact of COVID-19 on System...

Energy storage and flexibility

System operators warn of System Alerts risk this winter

EirGrid and SONI issued their Winter Outlook for 2020-21 on 15 October in which they warned that if high generator forced outage rates continue over the winter period there is a risk of System Alerts. The transmission system operators (TSOs) said the all-island capacity margin this winter is predicted to be 929MW...

Energy storage and flexibility

Imbalance prices rise for sixth consecutive month

This week we delve into system imbalance pricing, and look at the latest movements from the Balancing Market (BM). The BM ultimately reflects the actions taken by the transmission system operator to keep the system balanced. These actions determine the Imbalance Settlement Price (ISP) for each of the half-hourly settlement...

Energy storage and flexibility

EirGrid and SONI assess future demand and generation landscape

Transmission system operators (TSOs) EirGrid and SONI have issued the All-Island Generation Capacity Statement 2020-29 that sets out expected electricity demand together with the level of generation capacity that will be required over the next ten years.  Issued on 27 August, the Statement said RoI demand is increasing, and is forecast...

Commercial and market outlook

Changes: how our Spectrum service is evolving

This article was originally published on 9 June 2020 in our ‘Energy Spectrum Ireland’ publication.  Since Cornwall Insight launched the Energy Spectrum Ireland Service in 2015, it has been providing insight on key developments in the energy markets in Ireland. With the macro market trends of decarbonisation, decentralisation and digitilisation,...

Low carbon generation

The Balancing Mechanism and BSUoS under lockdown

The COVID-19 pandemic and subsequent lockdown restrictions have severely impacted the GB energy market with demand and prices at record lows. As market conditions have drastically changed, National Grid Electricity System Operator (NG ESO) has been much in the spotlight, with the current low demand scenario providing new operational challenges....

Energy storage and flexibility

Turn it up – responding rapidly to manage the system

In balancing the system, we used to talk mostly about narrowing capacity margins and the need to ensure ‘headroom’. But suddenly there’s a greater need for greater consumption and the provision of ‘footroom’ during COVID-19, and potentially and also in the future. The ESO will need to procure more and...

Low carbon generation

Flexible Asset PPAs – more capacity, more competition

The Power Purchase Agreement (PPA) market for flexible assets in the last six months has both grown in size and seen increased levels of competition as new offtakers and optimisers make themselves known in the market. What do we mean by the PPA market for flexible assets? We mean the...

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