In order to facilitate an ever-growing supply of intermittent renewable energy generation, there is a need for the Single Electricity Market (SEM) for Ireland and Northern Ireland to have robust System Services, capable of balancing the grid and maintaining security of supply.
The Need for Robust System Services in the SEM
Since its full introduction in 2018, the DS3 (Delivering a Secure Sustainable Electricity System) programme of System Services has allowed for such stability. All the while, the regulated tariffs it offers have granted asset operators and investors a sense of revenue certainty and predictability, allowing the flexibility market to grow across the SEM.
Transition to Competitive Arrangements: Future Changes and Concerns
Since the late 2010’s, however, changes to EU law – which, as they pertain to the SEM affect both Ireland and Northern Ireland – have signalled a need to move away from these regulated System Services and towards competitive arrangements, procured daily. With this in mind, the Transmission System Operators for the SEM have introduced the Future Arrangements for System Services programme. The Day Ahead System Services Auction (DASSA) is the first major step to be outlined, markedly changing the way in which reserve services are procured across the SEM.
While these changes are necessary to comply with EU law, asset operators and investors have expressed some concerns. Namely, a move away from the stable revenues of DS3 and a lack of clarity and certainty concerning achievable revenues under the DASSA has left some market participants questioning the make-up of their future revenue stack. Moreover, with DS3 arrangements ending in April 2026 and FASS not being implemented until December 2026, there are concerns over what will happen during the interim period.
Find Out More About System Changes in the SEM
To find out more about how System Services are set to change in the SEM, and how market participants are responding, download our blog by filling in this short form*.
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