The SEM Committee has today published an update regarding decision SEM-22-090 “Enduring Solution to Enable Energy Payments in the Balancing Market for DSUs” and the Balancing Market Trading and Settlement Code Modification – Mod_02_23 “DSU Energy Payments”.
In SEM-22-090, the SEM Committee adopted a phased approach to enable DSUs access to energy payments in the balancing market.
SEM-22-090 set out that under an enduring “Phase 2” solution, the metered demand response at every Individual Demand Site that is part of a DSU would be added to the metered quantity at the Individual Demand Site. The metered quantity of each DSU would be the sum of the metered demand response at its component Individual Demand Sites, and each DSU would be paid energy payments on that basis. A baseline methodology would be required to accurately measure the downwards demand response at each Individual Demand Site.
SEM-22-090 also set out an interim “Phase 1” solution, whereby the metered quantity of each DSU would continue to be set equal to its dispatch quantity, with each DSU being paid energy payments on this basis and with all final electricity customers funding these payments via Imperfection Charges.
Balancing Market Trading and Settlement Code Modification, Mod_02_23 “DSU Energy Payments”, was proposed to implement Phase 1. The implementation of the modification was subject to an impact assessment which would model the impact on resources, systems, and on Imperfections Charges.
Section 2.5 of SEM-23-067 Decision on Constraints Costs (Imperfections Charges) October 2023 – September 2024 stated:
"The TSOs included a cost of €56m for DSUs in their Supplementary Modelling, based on the expected impact of the implementation of Mod_02_23 to the Trading and Settlement Code, as drafted. This Modification is an outworking of the SEM Committees’ decision SEM-22-090. Additional analysis on this impact has been undertaken by the RAs. This found these costs would arise from two broad categories of DSU: those broadly ‘always on’ and those which usually only provide demand response on the system when called upon by the TSOs. It is the latter category which the SEM Committee’s decision applies to. As such, the SEM Committee has decided to amend the TSOs’ submission so only these are included in the calculations for the Imperfections charge. This reduces the DSUs cost component of the Supplementary Modelling from €56m to €4.29m. Further consideration will be given by the RAs in advance of implementation of the Modification to ensure that it is worded to be in line with decision SEM-22-090."
The further consideration referenced above has been ongoing since the publication of SEM-23-067 and has included consideration of the Framework Guideline on Demand Response which has been published, subsequent to SEM-22-090, and noting that an EU Network Code on Demand Response is currently being drafted.
In light of these considerations and developments since SEM-22-090 was published the SEM Committee considers it appropriate to consult on solutions that will take account of the different modes of DSU participation, and also take account of ACER’s Framework Guideline on Demand Response. This consultation is planned for Q1 2024.