Establishing the I-SEM FAQs

The wholesale market on the island changed considerably to take account of the requirements of the European Network Codes and the Target Model, including a change to four market timeframes. This became the new I-SEM (Integrated – Single Electricity Market) market design

Key elements of the market include:

• Active participation by supplier companies – submitting bids to purchase energy in the day-ahead and intraday markets.
• Suppliers and generators paying / being paid based on prices and quantities determined through ex-ante (forward, day-ahead and intraday) trading.
• Cross-zonal power flows determined based on energy market trades and power flowing from the cheaper to the more expensive bidding zone.

All documentation relating to the I-SEM Project are located in Publications. Simply filter by Name, Category, Document Type, Date or Subcategory.

The Technical Liaison Representative (TLR) was the point of contact for the Technical Liaison Group.

The TLR had to:

• Attend and engage with the Technical Liaison Group
• Ensure any I-SEM updates on technical systems or important notices etc. are communicated to the appropriate people within their organisation
• Address or raise any issues and/or concerns related to systems readiness at the Technical Liaison Group

Given the scope of the Detailed Design and Implementation phase of the I-SEM project, the RAs and TSOs put in place a dedicated governance structure and set of working arrangements. A number of symposiums were held until project conclusion and the intention of these was to combine the knowledge and expertise of both the RAs and TSOs/MOs.

There were a number of groups that form part of the Governance Framework. These groups are:

• I-SEM Steering Group
• Joint Project Board (JPB)
• Joint Project Manager Liaison
• Workstream Groups

For more information on I-SEM Project Governance, please refer to the SEM Agreed Approach document.

The SEM Agreed Approach document required that a Change Control process be approved by the I-SEM Steering Group, in line with recognised industry standards.

To comply with this overall requirement for I-SEM Programme delivery, a standard process was needed to manage all proposed changes to the baselined programme time, cost or quality, which impacted on two or more parties within the overall programme.

In this context:

• Baselined time = unrecoverable slippage to any milestone on the Level 2 programme plan (and by inference, also Level 1 milestones);
• Baselined cost = any proposed variance from the agreed financial envelop for the I-SEM Programme; and
• Baselined quality = the scope and functionality of the I-SEM, as set out in the design documentation and specifications to be baselined Dec 2015 onwards, on which two or more parties depend.

A party is any one of:

• CER and UR, acting jointly;
• TSO – in its delivery role;
• The Interconnector Owners (ICOs) – in their delivery roles; or
• Any other stakeholder involved in the I-SEM Programme e.g. TSO in any other role, generators, suppliers.

The Change Control process was not to be used for non-baselined documentation or management products such as minutes of meetings, or interim products such as working papers, registers or action lists; these changes must be managed ‘internally’ by the various workstream managers and PMO.

The Regulatory Authorities had overall responsibility for defining and maintaining the Change Control procedure.

For detailed information on this process, please see the Programme Change Control Procedure document.

The guide is technically correct because in this context “participate in the balancing market” refers to actively submitting incremental and decremental bids to the TSOs.

Note the definition of Balancing Market provided in the Trading & Settlement Code states that this “means the arrangements under this Code that provide for the market-based management of System Operator actions and processes to balance continuously generation and demand and to maintain the stable and secure operation of the electricity transmission systems on the island of Ireland”.

This naturally precludes non-dispatchable and non-controllable units as they are not subject to System Operator dispatch. This does not preclude non-dispatchable and non-controllable units from participation under the Trading & Settlement Code in relation to imbalance settlement and other requirements. We recognise that this language may lead to some confusion where the term balancing market has sometimes been used as a synonym for the balancing and imbalance settlement arrangements. This text could also read “A non-dispatchable and non-controllable unit cannot submit bids and offers to the TSO in the balancing market”.

The auctions and continuous market of SEMOpx are run each and every day (including weekends and bank holidays). Bids can be entered anytime between the order book opening (gate opening) and the order book closing (gate closure).

In the case of the Auctions

Each auction opens 19 days before the delivery date (i.e. the date on which the energy is delivered to the system) so this allows for early entry to take account of weekends and bank holidays.

In the case of the Continuous Market

The nature of this kind of market does not owe itself to early opening (i.e. as opposed to an auction which gathers all orders until the order book closes and solves for all orders simultaneously, a continuous market continuously matches orders in real-time).

As such, the Continuous Market opens each day for the following day.

Please note that each market segment (DAM/IDM/Continuous) is voluntary so a participant is not obliged to take part in any or all. Whether a participant decides to take part, and when they wish to submit bids is up to their own operational decisions (allowing for the gate opening and closing times described above).

A weekday which is not a public holiday, bank holiday or non-processing day as advised by the SEM Bank in Ireland or Northern Ireland. The term “Non-Working Day” shall be construed accordingly.

Holidays in either jurisdiction must be considered as Non-Working Days for all Markets: Balancing, CRM Capacity Remuneration Mechanism, Day Ahead or Intra Day.

The Market Operator publishes a yearly Settlement Calendar detailing the status of each day and highlighting the known activities that are planned to take place in each Working Day, including Payments deadline, publication of Statements etc.

This is done in accordance to the relevant timetables set out in both the Trading and Settlement Code and the Capacity Market Code.

The Market Trial was a dress rehearsal for live operation of I-SEM. The central bodies that provide the infrastructure for the I-SEM markets (for example, the TSOs and the Meter Data Providers) provided a trialling version of I-SEM which was “as–live” (this means as close to the live I-SEM environment as could be practically achieved). Market Participants used this to exercise their I-SEM systems, processes, and to allow their staff to practice operations.

A good way of viewing the Market Trial is that it was a reduced form of the live operation, rather than a type of testing.

The description of the I-SEM Market Trial can be found in the Market Trial Plan.

The Market Trial was done to mitigate the risks associated with the start of live operation of the complex I-SEM arrangements. It formed a bridge between the rigorous, but somewhat artificial, circumstances found in testing, and live operation.

It is common practice internationally for large programmes in the power sector, such as I-SEM, to undertake Market Trialling.

The overall approach we took is described in the Market Trial Strategy here. Further details are described in the Market Trial Plan here. Some of the features include:

• The TSOs’ I-SEM Project managed and coordinated the Market Trial
• The intention was to start the Market Trial with, so far as possible, a stable and complete set of registration data
• The defined criteria for entering, starting, and completing the Market Trial are outlined in the Market Trial Entry Exit Criteria
• The Market Trial included the Day-Ahead Market/Intraday Market and Balancing Market (including Imbalance Settlement)

There were three phases in the Market Trial:

1. Establishment Phase - during which we set up the trialling configuration with Market Participants connected
2. Scripted Phase - during which a fully pre-defined set of Scenarios was executed
3. Unscripted Phase - during which Market Participants were free to choose how they wish to operate

The Market Trial was where many of the preparations for I-SEM come together including:

• Systems and processes were tested before they were used in the Market Trial
• Operational staff were trained before they participated in the Market Trial
• Registration was substantially completed before the Market Trial began
• The outcomes of the Market Trial informed the Go-live decision making process

Prior to the first Financial Transmission Rights (FTR) market auction and the first Capacity Market (CM) auction, trialling activities were undertaken to demonstrate these would operate correctly. These trialling activities were separate from the main Market Trial. However, the Market Trial included other aspects of the FTR and CM arrangements.

Yes, the Market Trial environment was separate from the CCQT/PIT environment. The CCQT/PIT environment remained open for a period during Market Trial before being closed.

The Market Trial was structured to demonstrate the I-SEM functionality and not as a formal test of specific requirements. Operating I-SEM from bid-bank required a demonstration of the Meter Data Interfaces.

The CCC functionality provided through a system being developed by the I-SEM Programme for use by the TSOs and ICOs. It enabled the available electricity transfer capacity cross border to be determined with the intention of maximising the capacity being offered to the market.

An appointed intermediary that participated in the Market Trial and was registered in a particular market could sign on behalf of their clients / units. Otherwise, any entity (ie. Party) who wished to take part in the Market Trial directly whether in the Balancing Market, Day-Ahead / Intraday Market or Capacity Mock Auctions could complete a Market Trial Agreement.

Before the decision to start live operation of I-SEM could be made, there had to be confidence that preparations were completed satisfactorily and, consequently, that the risks associated with live operation had been reduced to an acceptable level. “Market Readiness” meant the extent to which the arrangements and components of I-SEM were ready for live operation and Participants were ready to fulfil their obligations in I-SEM.

The assessment of Market Readiness encompassed both Market Participants and the providers of central infrastructure (that is, the TSOs, Interconnector Owners, and Meter Data Providers). Since component markets of I-SEM open separately, the readiness of each (FTR, CM, DAM/IDM, BM and Imbalance Settlement) needed to be assessed individually.

The Market Readiness Team of the TSOs’ I-SEM Project coordinated the assessment and reporting of Market Readiness. Participants were asked to complete an online survey providing information about their readiness status, and this information was consolidated into a summary report by the Market Readiness Team.

The online survey that Participants complete constituted an assessment framework, defining steps towards readiness. It included, for each market:

• A set of metrics, covering the main components of the market arrangements (such as legal arrangements, systems, and business processes).
• For each metric, a set of criteria/milestones defining steps towards completion and readiness (Participants used these to self-assess their status and progress).
• For each Criterion/milestone, an indicative date for completion.
• Guidelines for use.

All Participants used the same assessment framework, and the guidelines described how each type of Participant should use the metrics and criteria.

Participants were asked to self-assess their status using the assessment framework.

The Market Readiness Assessments served two purposes. First of all, earlier reports provided valuable insights into any risks and issues that could arise during development. Subsequently, the reported Readiness Status were a key input into the decision making processes for the start of the market trial and go-live.

The description of the I-SEM Market Readiness Reporting Process can be found in the Market Readiness Reporting Strategy (Link Here) and Market Readiness Reporting Plan (Link Here).

The I-SEM Project Market Readiness programme of work was an integral part in the delivery of a Market Go-Live Decision. As such, each organisation was asked to nominate a Participant Readiness Coordinator (PRC) to be the primary point of contact for the Market/Participant Readiness and the Project Managers Group.

The PRC had to:

• Determine the readiness criteria for their organisation, and the milestones within each criterion which were relevant to their organisation
• Assess progress against the defined readiness criteria
• Take any other actions necessary to ensure readiness for participation in the market
• Attend and engage with the Project Managers Liaison Group
• Ensure any I-SEM Updates, Change Requests/Impact Assessments or important notices etc. were communicated to the appropriate people within their organisation
• Address any issues and/or concerns related to readiness - arising from the readiness assessment, or otherwise identified by the participant or the I-SEM Project

Market Readiness Assessment looked across all the aspects of each of the component markets of I-SEM. Hence, business readiness and the readiness of systems, processes, and legal arrangements were all included within the assessments.

The Market Readiness Assessment process provided periodically an overall picture of how I-SEM preparations were progressing. Consequently it provided valuable indications of where Participants saw particular challenges.

Market Readiness assessments formed important inputs into the decision making processes for:

1. The Start of the Market Trial
2. Go-live

Yes, the TSOs’ I-SEM project appointed an independent auditor who reviewed the reported status of I-SEM Market Readiness.

Participants who are accessing the Balancing Market via Type 2 interfaces require two independent forms of authentication – a valid digital certificate and an application password.

Type 3 interfaces do not require an application password. However, the existing certificate password method will continue to be used for digitally signing market submissions. Specific information can be found here.

Specific details regarding Balancing Market security and user management may be found in the I-SEM Technical Specification (ITS): Volume B here.

For the Balancing Market, backward compatibility cannot be supported for I-SEM.

• TLS 1.1 (transport mechanism) and SHA1 (digital signature encryption algorithm) are vulnerable to attacks.
• TLS 1.2 and SHA2 with RSA is used.

Note: The I-SEM security standards have been upgraded in line with best practice following identification of vulnerabilities with previous standards.

• For the Balancing Market – SHA2-512
• For the Day-Ahead and Intra-Day Markets – SHA2-256
• For the Capacity Market – SHA2-256*

*Work remains ongoing with vendors

Registration for ETS is part of the overall registration process.

The mechanism for members to engage with the Spot Market Settlement System (SMSS) is detailed in I-SEM Technical Specification Volume D.