Real-Time Imbalance Pricing in I-SEM - Ireland's Balancing Market

Abstract

Real-time pricing of electricity, to the extent possible, is a good indicator of the economic value of balancing the system in real-time. Most of the electricity markets in Europe have a Power Exchange in operation, where Day-Ahead and Intra-Day trading is done, and the real-time balancing of the system is left to the System Operator (SO). The SO operates a real-time balancing market by inviting bids and offers from market participants to match supply and demand in realtime. These bids and offers are with respect to deviation from Physical Notifications (PNs), which the participants communicate to the SO as their intended generation/consumption. Post-facto calculation of the cost incurred to balance the system is done by collating all balancing instructions issued in real-time for any pricing interval, which is 5 minutes in I-SEM. The realtime calculation of the imbalance price is based on the process of flagging and tagging, which is used to determine which all balancing actions will affect the imbalance price. This paper will explain the concept of flagging and tagging using examples.