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Single Electricity Market Operator (SEMO)

Ireland’s Single Electricity Market Operator (SEMO) uses market trading infrastructure platform from ABB

Business Impact Summary

In the mid-2000s, the respective electricity transmission system operators in the Republic of Ireland and Northern Ireland—ESB National Grid (ESBNG), now EirGrid, and the System Operator of Northern Ireland (SONI)—combined their resources to establish a single electricity market. Since its inception, the Single Electricity Market Operator (SEMO) has relied on an advanced Network Manager™ Market Management System (MMS) from ABB’s Enterprise Software product group, to provide the foundation for its trading market infrastructure and applications. With this platform in place, SEMO has consistently delivered long-term economic and social benefits proving mutually advantageous to the Republic of Ireland and Northern Ireland. The MMS solution at SEMO has since been in lockstep with the pioneering nature of the Single Electricity Market as the world's first to operate with dual currencies and in multiple political jurisdictions.

 

The Company

The Single Electricity Market (SEM) is the wholesale electricity market operating in the Republic of Ireland and Northern Ireland. As a gross mandatory pool market operating with dual currencies and in multiple political jurisdictions, the SEM represents the first market of its kind in the world.

The market encompasses approximately 2.5 million electricity customers, 1.8 million in the Republic of Ireland and 0.7 million in Northern Ireland.

The Single Electricity Market Operator (SEMO) facilitates the continuous operation and administration of the Single Electricity Market. SEMO is a joint venture between EirGrid plc and SONI Limited.

 

The Challenge

In August 2004, a memorandum of understanding between the Commission for Energy Regulation (CER) in Ireland and the Northern Ireland Authority for Utility Regulation (NIAUR) established a series of principles for the development of a single wholesale electricity market for the Republic of Ireland and Northern Ireland. A development framework for the All Island Market for Electricity followed later that year, and in 2005 the agreement between EirGrid and SONI to establish the market was formally approved. The ambitious undertaking would eventually deliver the world's first pool market to operate with multiple currencies and sovereign countries.

Focused on creating the single electricity market, the SEM Establishment Programme established SEMO and the systems and processes necessary to operate the new market. Aiming to provide a competitive, sustainable and reliable wholesale electricity market, SEMO sought to deliver specific goals key to its unique market structure:

  • Larger, single market with competitive energy prices
  • Open and transparent competition
  • A more stable and attractive investment location
  • Greater security of supply
  • Greater energy efficiency

The IT Perspective

The SEMO IT Group is responsible for the maintenance and development of the market IT systems & infrastructure, and for developing and implementing SEMO IT strategy across the business. It is in this capacity that IT works closely with the market operations and market development areas to support day-to-day operations as well as upcoming market changes. Charged with supporting these key audiences, IT's customers were propelled by different needs. Market operations looked for high functionality and usability from its market management system. For market participants, a group comprising utilities and smaller participants such as small generating companies and wind farms, full support for market development and regulations was key.

The main challenges IT faced in managing its customers' activities were:

  • Supporting timelines that met different daily and weekly schedules and reporting tracks, vital to system performance reliability
  • Ensuring participants could submit timely bids and get trading data back in time to allow informed business decision-making

 

The Solution

The Network Manager MMS solution from ABB was chosen as the bedrock to the market's infrastructure. ABB was contracted to design and implement the new trading system with dual operation of live, interconnected systems in Dublin and Belfast, as well as provide professional services including a multi-pronged training curriculum. "With strong engineering know-how and markets experience, ABB understood our requirements and knew how to address the challenges we faced," said SEMO IT Manager Sean Mackin. "The project was executed on time and within budget, and the new market went live as scheduled."

The MMS solution was designed and developed for the SEM at the ABB MMS Center of Excellence in Santa Clara, CA. The enterprise solution comprised a fully integrated hardware and software system providing end-to-end, bid-to-bill capabilities in full conformance with market rules exacted by the Ireland Market Regulator. These regulations included the use of reserve constrained unit commitment for scheduling energy and reserve and congestion management, the use of unconstrained unit commitment for establishing market clearing prices and capabilities for invoicing and settlements in two currencies. Additionally, the system provided future expandability with built-in functional and performance capacity accommodating more than two times its delivered sizing requirements.

A comprehensive set of advanced applications supported all market-related functions, among them:

  • Market clearing engine: unconstrained unit commitment for market price and dispatch quantity scheduling
  • Congestion management using reserve constrained unit commitment
  • Managing operating schedules: reserve constrained unit commitment to schedule energy and reserves (day-head and in-day)
  • Market accessibility: demand-side bid and advanced modelling capabilities
  • Market trading, registration lifecycle, system-operator data exchange, meter data brokering and service oriented integration
  • Trading products: day-ahead market (energy bids and offers) and settlement reallocations for credit management

ABB’s operations platform also interfaced with two energy management systems and various enterprise systems for accounting and billing, metering, credit risk management and settlement functions. The solution fully supported the goals of the incipient market and addressed the needs of the audiences it served.

 

The Result

After going live, ABB has worked with SEMO to continuously add value to the system in a dynamic environment. This process has facilitated changes to be made to the system efficiently, including enhancements required by market participants and the regulator as a result of the evolving market arrangements in Ireland. Significant features have been integrated to enable interface integrity checking, improved reporting capabilities and value added tax computations.

As one of Europe's wholesale electricity markets, the SEM continues to harmonise its market arrangements with the EU by incorporating evolving regulations and local governmental policies. With the upcoming East-West Interconnector (EWIC), the MMS will accommodate support for the single electricity market intraday trading changes. It will enable participants to bid on multiple trade gates throughout the day and deliver on EU regulatory requirements.

Main Data

Location Ireland
Industry Utilities
Solutions Used Network Manager MMS


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