I-SEM Rules
Trading and Settlement Code
Calculation of Payments and Charge (Capacity Settlement Additions)
Interimnitial Legal Draft
1402/076/2016
- Calculation of Payments and Charge (Capacity Settlement Additions)
Note for Working Group:
This section has been drafted in advance of the Capacity Market Code. It is based on certain assumptions as to how the Capacity Market will be structured and what will be included in that code, and may need to be reviewed when that code is drafted.
There are aspects of the drafting here which will eventually be used for the Capacity Market Code drafting, rather than the Trading and Settlement Code drafting. These have been identified throughout the document.
A.1Introduction
A.1.1Purpose of this Chapter
A.1.1.1This chapter specifies how the Market Operator shall calculate the charges and payments for settlement of the capacity market.
A.1.2Settlement Charges and Payments for Capacity Providing Units
A.1.2.1The Market Operator shall calculate the following charges and payments for each Capacity Providing Unit for the relevant period, in accordance with the timetable in section [ ]:
(a)CCPΩc, the Capacity Paymentcalculated in accordance with section A.4;
(b)CDIFFCTOTΩγ, the Total Difference Charge calculated in accordance with section A.5.
A.1.3Settlement Charges and Payments for Supplier Units
A.1.3.1The Market Operator shall calculate the following charges and payments for each Supplier Unit for the relevant period, in accordance with the timetable in section [ ]:
(a)CCCvc, the Capacity Charge calculated in accordance with section A.6;
(b)CSOCDIFFPvc, the Difference Payment Socialisation Charge calculated in accordance with section A.6;
(c)CDIFFPACHIEVEvd, the Achievable Difference Payment calculated in accordance with section A.7.
A.2Data Sources, Conventions and Definitions
A.2.1Timing Conventions
A.2.1.1A Settlement Day means a period starting from 00:00 and ending at 24:00 each day.
A.2.1.2A Billing Period is defined as one Week commencing at 00:00 each Sunday. It is the period of time over which Difference Payments, Difference Charges, Trading Payments and Trading Charges are based..
A.2.1.3A Capacity Period is the period of time over which Capacity Payments and Capacity Charges are based. It is defined as a Month commencing at 00:00 on the first day of each Month.
A.2.1.4A Capacity Year is the period of twelve Capacity Periods starting at the beginning of the Month of October.
A.2.1.5A Month is one calendar month, starting at midnight on the first calendar day of such month.
A.2.1.6A Day is one calendar day, starting at midnight.
A.2.2Parameter Definitions
A.2.2.1The Annual Stop-Loss Limit Factor (FSLLAy) is the multiplier (%) used to establish the annual stop-loss limit for Non-Performance Difference Charges from a Capacity Providing Unit.
A.2.2.2The Billing Period Stop-Loss Limit Factor (FSLLBy) is the multiplier (%)used to establish the billing period stop-loss limit for Non-PerformanceDifference Charges from a Capacity Providing Unit.
A.2.2.3The Difference Payment Socialisation Multiplier (FSOCDIFFPy) is the multiplier(%) used to establish the socialisation charge from Suppliers to recoverDifference Payments.
A.2.2.4The Capacity Charge Metered Quantity Factor (FQMCCγ) for each Imbalance Settlement Period, γ, is a flag denoting which Imbalance Settlement Periods the Regulatory Authorities have determined should be used as the basis for charging suppliers. It shall have a value of one for periods to be considered, and a value of zero for the periods not to be considered.
A.2.2.5The Annual Capacity Payment Exchange Rate (XRCPAn) is the exchange rate to be applied to the Capacity Payment Price to convert it from Euros to the contractual currency.
A.2.2.6The Peaking Unit Theoretical Efficiency (FTHEORYPUy) is the Higher Heating Value (HHV) efficiency (%)in Capacity Year, y, of a theoretical peaking unit.
A.2.2.7The Carbon Price (PCARBONm) is the reference carbon price (€/tCO2) in Month, m, used to include the cost of carbon in each of the fuels according to the carbon intensity of those fuels.
A.2.2.8The Natural Gas Fuel Price (PFUELNGm) is the reference price(€/MWh) for natural gas in Month, m, inclusive of fuel transport adders.
A.2.2.9The Natural Gas Carbon Intensity Factor (FCARBONINGy) is the factor (tCO2/MWh) in Capacity Year, y, used to include the cost for carbon emissions when considering the reference price for natural gas.
A.2.2.10The Oil Fuel Price (PFUELOm) is the reference price (€/MWh) for the reference oil-type in Month, m, inclusive of fuel transport adders.
A.2.2.11The Oil Carbon Intensity Factor (FCARBONIOy) is the factor (tCO2/MWh) in Capacity Year, y, used to include the cost for carbon emissions when considering the reference price for oil.
A.2.2.12The Demand Side Unit Theoretical Price (PTHEORYDSUy) is the estimated bid price (€/MWh) in Capacity Year, y, of a theoretical Demand Side Unit.
A.2.2.13The Capacity Requirement Reserve Quantity (qRCRy) in Capacity Year, y, is a MW value included in the capacity requirement to account for reserve in accordance with [the capacity market code outlining where the capacity requirement is calculated].
A.2.3Variable Definitions
A.2.3.1The Net Capacity Quantity (QCNETΩγ)is the energy equivalent of the Capacity Quantity (in MWh) for a Capacity Providing Unit after all primary and secondary trades, which can be compared with the energy market trades.
A.2.3.2The Obligated Capacity Quantity (QCOBΩγ) is the quantity a Capacity Providing Unit is required to trade through the reference markets to avoid Non-Performance Difference Charges.
A.2.3.3The Annual Stop -Loss Limit (CSLLAΩy)is the value which applies to limit the exposure of capacity providers to non-performance difference charges. This limit, in cash flow terms, is a multiple of the revenue a unit receives from their capacity payments, considering known past revenues and estimated future revenues .
A.2.3.4The Demand Side Non-Delivery Percentage (FNDDSΩγ) reflects the non-delivery of a Capacity Quantity by all Demand Side Units, u, represented by a Capacity Providing Unit, Ω. It is the percentage of the capacity requirement for the demand sideunit which has been determined by the relevant TSO not to have been delivered when the unit was dispatched.
A.2.3.5The Tracked Difference Payment Shortfall Charge (CSHORTDIFFPTRACKvd) is the variable which tracks the difference payment shortfalls incurred by each Supplier Unit, which needs to take into account the shortfall position of the unit for the previous day, the current day’s shortfalls incurred, and any reimbursement of shortfalls which has occurred for the previous day.This variableconsiders the increase in the shortfall experienced to date by the unit whenever an additional shortfall has been incurred, and a decrease in the shortfall experienced in respect of the unit to date whenever a payment can be made to them to reimburse for previous shortfalls.
A.2.3.6The Difference Payment Reimbursement Payment (CREIMDIFFPvd) is the amount by which the unit’s shortfall can be paid back on a day where the balance in the socialisation fund is sufficient to do so. Units may only be reimbursed up to the level determined through their Tracked Difference Payment Shortfall Charge, and up to the level possible determined through the balance available in the fund.
A.2.4Capacity Market Data
A.2.4.1The System Operators shall submit to the Market Operator the following data for each Capacity Providing Unit, Ω, which is representing a Generator Unit, u, which is a Demand Side Unit, in each Imbalance Settlement Period, γ:
(a)The Demand Side Non-Delivery Percentage (FNDDSΩγ) for each Capacity Providing Unit, Ω, which represents aGenerator UnitDemand Site Units, u, that is a Demand Side Unit;
(b)The Capacity Quantity (qCΩn);
(c)The Commissioned Capacity Quantity (qCCOMMISSΩγ);
(d)The De-Rating Factor (FDERATEΩ);
(e)The Nameplate Above De-rated Capacity Factor (FCNAMEΩγFCADERATEΩγ);
(f)The Annual Stop-Loss Limit Factor (FSLLAn);
(e)(g)The Billing Period Stop-Loss Factor (FSLLBn);
(f)(h)The Capacity Payment Price (PCPΩn); and
(g)(i)The Annual Capacity Payment Exchange Rate (XRCPAn).
A.2.4.2If the Market Operator has not received values of the Demand Side Non-Delivery Percentage from the System Operators by the time it is required to carry out the Settlement calculations, the value of the Demand Side Non-Delivery Percentage (FNDDSΩγ) for each Capacity Providing Unit, Ω, which represents a Generator Unit, u, that is a Demand Side Unit, in each Imbalance Settlement Period, γ, shall be deemed to bezero.
A.2.5 [Capacity Market Code Definitions
Note for Working Group:The following are parameters or variables which had been defined as part of the CRM Settlement Plain English Documents which are not needed to be defined in the Trading and Settlement Code, but will be used for the drafting of the Capacity Market Code. The exact wording of these is likely to change as that code is drafted, but they are included here to aid understanding of the capacity settlement rules.
A.2.5.1The CRM Capacity Quantity (qCCRMΩ) is the capacity (MW) to which a De-Rating Factor is applied for the auction process, which is calculated at the Trading Boundary, and is determined as follows:
(a)For existing units, it represents the Registered Capacity Quantity (qCRu) of the unit;
(b)For plant requiring significant investment it represents the planned unit capacity. Once the plant has been commissioned, this will be replaced with the actual capacity as demonstrated for the unit;
(c)For non-dispatchable, non-firm, and Demand Side Units it represents the qualified capacity;
(d)For Capacity Aggregator Units it represents the capacity covered by proof of physical backing for all units represented by the Capacity Aggregator Unit.
A.2.5.2The Nameplate Capacity Factor (FCNAMEΩγ) is the factor which determines the quantities to be considered in settlement if a Capacity Providing Unit can trade up to its nameplate capacity through secondary trades for technical reasons. The value for this factor will be made equal to FDERATEΩ by default such that unit’s exposure would be limited to the derated commissioned quantity normally, but would be given a value equal to one on those occasions where it is flagged that a unit can trade up to their nameplate capacity for technical reasons.
A.2.5.3A Capacity Providing Unit is a unit which is eligible for Capacity Market Settlement after achieving a Capacity Quantity from the Capacity Market as defined in [the Capacity Market Code]. It can either be a Generator Unit, Capacity Aggregation Unit, or Interconnector. It is represented by the subscript Ω.
A.2.5.4The Capacity Providing Unit Identifier (Ω) for a unit shall be the same for all units represented by the Capacity Providing Unit.
A.2.5.5The Unit Type (UTu) is the classification type of the unit for the purposes of the capacity auction process.
A.2.5.6The De-Rating Factor (FDERATEΩ) is the factor to be applied to the CRM Capacity Quantity to give the quantity of capacity a Capacity Providing Unit is able to sell to back Capacity Quantities.
A.2.5.7The De-Rating Factor Valid From Date is the start of validity for each De-Rating Factor value. Each De-Rating Factor value supersedes all earlier values.
A.2.5.8The Unit Capacity Start Date is the first date on which capacity is available:
(a)For existing, dispatchable units, this will be [some date in the past];
(b)For plant requiring significant investment, this will be set to the Planned Commissioning Date;
(c)For non-dispatchable, non-firm and Demand Side units, it will be set to the date of qualification;
(d)For Capacity Aggregator Units, it will be set to the first date for which proof of physical capability is available for a unit represented by the Capacity Aggregator Unit.
A.2.5.9The Unit Capacity End Date is the final date on which capacity is available:
(a)For dispatchable units existing or dispatchable units requiring significant investment, non-dispatchable, non-firm and Demand Side Units, this will be [some date in the future] unless a closure date for the unit has been agreed where this date will be used;
(b)For Capacity Aggregator units, it will be set to the last date for which proof of physical capability is available for a unit represented by the Capacity Aggregator Unit.
A.2.5.10The Positive CRM Bid Tolerance (TOLCRMBPΩ) is the bid tolerance (MW) above the de-rated quantity to be applied for mandatory participation in the auction process for Dispatchable units.
A.2.5.11The Negative CRM Bid Tolerance (TOLCRMBNΩ) is the bid tolerance (MW) below the de-rated quantity to be applied for mandatory participation in the auction process for Dispatchable units.
A.2.5.12The CRM Bid Tolerance Valid From Date is the start of the validity for each value of CRM Bid Tolerance value to be used in the auction process for Dispatchable units. Each value supersedes all earlier values.
A.2.5.13The Unique Entry Identifier (n) is the identifier for each entry in the Contract Register for the trading of Capacity Quantities.
A.2.5.14The From Entry Identifier (n) is the identifier used if an entry in the Contract Register is as a result of a secondary trade, providing the Unique Entry Identifier for the Capacity Quantity that has been traded in whole or in part.
A.2.5.15The From Unit Identifier (Ω) is the identifier used if an entry to the Contract Register is as a result of a secondary trade, providing the Unique Capacity Providing Unit Identifier from whom the Capacity Quantity has been transferred as a result of the secondary trade.
A.2.5.16The Capacity Quantity (qCΩn) is the capacity (MW) contracted as part of the capacity market, eligible for consideration of Capacity Payments and Difference Charges. This value is at the Trading Boundary.
A.2.5.17The Capacity Quantity Start Date is the date the Capacity Quantity becomes eligible to be considered for the settlement of Capacity Payments and Difference Charges.
A.2.5.18The Capacity Quantity End Date is the last date the Capacity Quantity is eligible to be considered for the settlement of Capacity Payments and Difference Charges.
A.2.5.19The Capacity Quantity Commissioning Date is the date that the Capacity Providing Unit has commissioned:
(a)For existing units and secondary trades, this will be [some date in the past];
(b)For plant requiring significant investment or new build, this will initially be set to the day immediately following the Capacity Quantity End Date. Once that plant has commissioned, this value shall be set to the commissioning date.
A.2.5.20The Long Stop Date is the date by which new plant must be commissioned to be considered eligible for settlement of Capacity Payments and Difference Charges.
A.2.5.21The Capacity Payment Price (PCPΩn) is the price (€/MW) paid for each Capacity Quantity contracted.
A.2.5.22The System Operator shall maintain a register, known as the Unit Register, containing data of all units which are eligible to take part in the [Capacity Auction] including the following data:
(a)Unit Identifier (u);
(b)The Capacity Providing Unit Identifier (Ω);
(c)The Unit Type (UTu);
(d)The CRM Capacity Quantity (qCCRMΩ);
(e)The Unit Capacity Start Date;
(f)The Unit Capacity End Date;
(g)The De-Rating Factor (FDERATEΩ);
(h)The De-Rating Factor Valid From Date;
(i)The Capacity Auction Price (PCAUCTIONΩ);
(j)The Positive CRM Bid Tolerance (TOLCRMBPΩ);
(k)The Negative CRM Bid Tolerance (TOLCRMBNΩ); and
(l)The CRM Bid Tolerance Valid From Date.
A.2.5.23The System Operators shall maintain a register of Capacity Quantity Trades, reflecting the results of specific capacity auctions and the results of any secondary trading, including the following data:
(a)The Unique Entry Identifier (n);
(b)Primary or Secondary Trade Flag;
(c)The From Entry Identifier (n);
(d)Capacity Providing Unit Identifier (Ω);
(e)The From Unit Identifier (Ω);
(f)The Capacity Quantity (qCΩn);
(g)The Capacity Quantity Start Date and Time;
(h)The Capacity Quantity End Date and Time;
(i)The Capacity Quantity Commissioning Date;
(j)The Long Stop Date;
(k)The Capacity Payment Price (PCPΩn); and
(l)The Annual Capacity Payment Exchange Rate (XRCPAn).
A.2.5.24The System Operators shall adjust the Contract Register to terminate the Capacity Quantity contract if a plant requiring significant investment has not commissioned by its Long Stop Date.
A.2.5.25The System Operator shall, if agreed with a Participant the Capacity Providing Unit, suspend Capacity Payments and Difference Charges in respect of one or more of its Capacity Providing Units by adding entries to the Contract Register assigned to the Capacity Providing Unit containing the Capacity Quantity, Capacity Quantity Start Date and Capacity Quantity End Date as agreed with the Capacity Providing Unit.]
A.3Strike Price
A.3.1Setting of Strike Price Parameters
A.3.1.1If requested by the Regulatory Authorities, the System Operators shallreport to the Regulatory Authorities, proposing the data source for,or methodology for determining,any of the following parameters to be used in the calculation of the Strike Price:
(a)The Carbon Price (PCARBONm) for Month, m;
(b)The Natural Gas Fuel Price (PFUELNGm) for Month, m; and
(c)The Oil Fuel Price (PFUELOm) for Month, m.
A.3.1.2The System Operators’ report under paragraph A.3.1.1 must set out the justification for the specific proposals and, if so requested by the Regulatory Authorities, include alternative proposals, setting out the arguments for and against such alternatives.
A.3.1.3The System Operators shall provide to the Market Operator, [within XWorking Days] of the Regulatory Authorities’ approvinga value, data source or methodology for a parameter referred to in paragraph A.3.1.1, the approved value, data source or methodology[, in accordance with Appendix K “Market Data Transactions”].
A.3.1.4The Market Operator shall publish the approved value, data source or methodology for a parameter referred to in paragraph A.3.1.1, and the date and time on which it comes into effect,within [X Working Days] of receipt of the Regulatory Authorities' approval.
A.3.1.5The values for the following parameters used in the calculation of the Strike Pricemay be determined from time to time by the Regulatory Authorities (or by applying a methodology determined by the Regulatory Authorities):
(a)The Peaking Unit Theoretical Efficiency (FTHEORYPUy) for Capacity Year, y;
(b)The Natural Gas Carbon Intensity Factor (FCARBONINGy) for Capacity Year, y;
(c)The Oil Carbon Intensity Factor (FCARBONIOy) for Capacity Year, y; and
(d)The Demand Side Unit Theoretical Price (PTHEORYDSUy) for Capacity Year, y.
A.3.1.6The Market Operator shall publish the approved valueor methodology for of a parameterreferred to in paragraph A.3.1.5, and the date and time on which it comes into effect,within [X Working Days] of receipt of the Regulatory Authorities' approval.
A.3.2Calculation of Strike Price
A.3.2.1The Market Operatorshall calculate the Strike Price (PSTRm) inMonth, m, as follows: