The SEMC was left with little alternative after the Market Trial was beset with technical problems and the feedback from various market readiness assessments. The original I-SEM go-live date was 1 October 2017 and this was initially pushed back to 23 May 2018, in March the SEMC warned market participants that this date was now ‘at risk’ due to recurring issues with the central market IT system. On 12 April, The Electricity Association of Ireland (EAI) requested a delay to allow at least two months of “clean” trials before go-live and requested any such date should not coincide with the summer holiday period. Considering these factors, this delay to 1 October appears the sensible decision for all market stakeholders. The move has been broadly welcomed by market participants who view this additional period as a necessity to resolve ongoing central market operator system issues and to facilitate a seamless transition to I-SEM.
This new date will impact both suppliers and generators to varying degrees. In the short term, there is the issue of capacity market clarity and the I-SEM DC and NDC CFDs sold to suppliers. These CFDs will be reissued with the old SEM pricing formulae (which suits suppliers with summer gas at 50 p/therm), these will also be marked against the SMP as opposed to the day ahead hourly auction. The SEM-GB interconnector capacity will now continue to be sold as physical transmission rights (PTRs) for this four month window as opposed to the envisioned financial transmission right (FTR) market. In the longer term, a drawback of the proposed new go-live date is that it corresponds with the onset of winter and associated pricing volatility. A May start with low demand and relatively pleasant weather would have provided participants with a gentle transition to this new traded market.
If you have any questions in relation to I-SEM or the trading services offered by Erova Energy, feel free to contact us at firstname.lastname@example.org