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SEM Chart of the Week

2020

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Caught in the balance: Assessing amber alerts in the SEM

Joe Camish
Joe Camish

In this SEM Chart of the Week, we will be observing the recent amber alert which was issued earlier this week, along with the impact of new balancing market modifications.

On 21 January at 10:30am, SEMO announced the issuing of an amber alert. An amber alert is issued when the system margin is at a level where a trip of the largest in-feed would give rise to reasonable possibility of either a failure to meet system demand, or cause a significant deviation in system frequency from the norm.

In this instance, it was caused by a system event in Northern Ireland (NI), as units at Coolkeeragh and Kilroot tripped, while another Kilroot unit was on a planned outage, creating a shortfall in generation in NI. The alert was eventually cleared from 6:00pm.

Previous alerts in the market have generally seen the imbalance settlement price (ISP) spike to highs of €1,400/MWh on 9 October 2018 and €3,774/MWh on 24 January 2019. With the exception of 6 November 2019, where no price spike was observed (€92/MWh).

This week’s event differed from previous extreme events with the ISP peaking at just €351/MWh, with the imbalance period price – calculated every five minutes – reaching €435/MWh at 10:20am.

The lower ISP compared to previous price spikes during such events can in part stem from the new balancing market modifications which have been issued since the January 2019 amber alert. Such an example is Mod-09-01, which was implemented on 2 May 2019 and saw the removal of locational constraints from the imbalance pricing calculation.

The events of this week highlight two key points, the first being that it looks like the introduction of new balancing modifications have helped to curb extreme pricing events similar to those experienced in earlier amber alerts. While fixes to the balancing market by the system operator in the first year of I-SEM may also be starting to aid this recent development.

The second point being, the continuation of such events highlights the need for extra generation in Northern Ireland, to improve system stability and reliability in the North.

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