Market Prices on 7th August 2019
Market Prices on 7th August 2019
On 7th August 2019, Imbalance Prices increased to €229.41/MWh at 9:00am and remained, on average, at €221/MWh for the rest of the day. For 26 of these 28 half hour periods (between 09:00 and 23:30), the Imbalance Price was above the average life-to-date Imbalance Price of €55.68/MWh, peaking above €250/MWh for 12 trading periods and above €300/MWh for 5 trading periods.
But what was going on with the system to cause this to happen? The day started as any typical I-SEM day would; with a negative Net Imbalance Volume (NIV) (i.e. a long system). During the morning hours of between 00:00 and 07:00, the Imbalance Price was on average €10.90/MWh less than the Day-Ahead Prices, reflecting this long system position.
The wind activity was also generally low during the morning hours, producing on average 645MW each trading period, and it continued like this for the rest of the day. The wind forecast error was relatively benign for the whole day also, with mean normalised absolute error (NMAE) for the entire day of 1.5%.
At 07:00, the NIV switched to positive, meaning the system was short, and it remained this way for the rest of the day. This isn’t abnormal, as can be seen from the following graph showing the average NIV by hour of the day since I-SEM Go-Live. In general, the TSOs would expect this flip to occur and would generally be prepared for it.
So, what caused these unusual price spikes to occur? In short, it was a combination of the low levels of wind, plant outages and the minimum reserve requirements needed to maintain system stability.
The combined effect of low wind levels and plant outages meant that several units were decremented to ensure the minimum reserve requirements were not compromised. As these units were unable to increase their output any further, the system had to call upon expensive peaking plants such as Poolbeg PBA (€488.5/MWh), Aghada AT11 (€457.3/MWh), and Tarbert Unit 4 (€490/MWh) in almost every 5-minute period to contribute their volumes for meeting the NIV. This caused significant price spikes in most periods, with highs of €310/MWh and lows of €150/MWh depending on the level of the NIV.
While the above explains trading periods where Imbalance Prices were high, there are 3 trading periods between 09:00 and 23:30 on 7th August where Imbalance Prices were low, relatively speaking. Each of these trading periods have a different reason associated with their price movement.
The first, at 11:30am was caused by an Imbalance Pricing Outage, which forced the market to use the backup price, hence why the Imbalance Price is so closely aligned with the Day-Ahead Price at that time. The second low Imbalance Price occurred at 14:00, where a price spread of €3.83/MWh was realised. Although the NIV was short, it was only short by 10MWh meaning that the system was able to increment cheaper units to meet system balance. The third and final low Imbalance Price occurred at 17:30, at the time when the NIV was at its highest during that day. While a high Imbalance Price should normally result from such an occasion, the system was able to use 3 of the Turlough Hill units as well as Huntstown 2 to meet their required incremental volumes, at much lower prices than PBA, AT11 and Tarbert would have required.
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 Price Spread is calculated as Imbalance Price – Day Ahead Price.