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Date: December 2018 | Client: Commission for Regulation of Utilities and Utility Regulator | Sector: Energy | Energy markets | Expertise: Modelling

Capacity Auction Monitoring for Capacity Market in Ireland and Northern Ireland

Since 2017, we have been the Capacity Auction Monitor (“Monitor”) for the Capacity Remuneration Mechanism (CRM) for the Integrated Single Electricity Market (I-SEM).

We are responsbile monitoring the ongoing processes, including the qualification and auction processes, as well as checking that the results of these processes meet the Capacity Market Code (CMC) on the island of Ireland.

A trusted partner

CEPA was appointed as the independent Monitor for the CRM for the I-SEM which went “live” in 2018 on the island of Ireland. Under the CRM, generators and other capacity providers receive payments for being available and ready to supply electricity to the grid. The CRM introduces a competitive auction process for allocating capacity payments.

 We have developed a monitoring system that allows us to effectively monitor the auction process, which includes the following: 

  • A range of technical protocols which describe our activities with respect to technical issues, including the analysis of data to verify compliance. 
  • A communications protocol, which sets out the communication between the Monitor, the SOs, the RAs, and market participants. This presents clear communications channels to ensure that our independence as the Monitor is clear, and also to ensure that we have receive the necessary information and data to allow us to effectively undertake our role as Monitor. 
  • An issues log. We maintain an issues log which serves as a repository of potential instances of non-compliance. This documents issues, and the process from raising the issue with the SOs/RAs through to resolving/closing the issue.  
  • A range of analytical tools that enable us to verify that the auction clearing process has been conducted according to the relevant provisions, including checking that the auction clearing algorithm has produced results that comply with the auction clearing methodology published in advance of the auction.    

Impact

We report on all non-compliance issues, regardless of materiality, and indicate the actual/likely impact that any non-compliance may have on the results of the auction. For this, we prepare qualification reports for each Capacity Auction: 

  • a report focusing on the Qualification Process that the SOs led to qualify participants’ Capacity Market Units for an upcoming Capacity Auction; and 
  • a report focusing on the running of the Capacity Auction.  

Our role in the Capacity Remuneration Mechansim ensures that the process and procedures the System Operators (SOs, EirGrid and SONI) have to follow in conducting the auction have been followed appropriately. We also provide assurance to the Regulatory Authorities, market participants, and other stakeholders that the Capacity Auctions have been conducted in accordance with the rules. 

To find out more, please contact our experts listed below.