EirGrid plc Annual Report 2012

EIRGRID PLC ANNUAL REPORT & ACCOUNTS 2012Operating the SingleElectricity MarketThe Single Electricity Market (SEM) is the wholesale electricity market which has operatedin Ireland and Northern Ireland since 1 November 2007. The SEM provides for a competitive,sustainable and reliable wholesale market in electricity, aimed at delivering long-term allisland economic and social benefits. The Single Electricity Market Operator (SEMO) operatesand administers the SEM. SEMO is licensed and regulated by the Commission for EnergyRegulation in Ireland and the Utility Regulator Northern Ireland, acting jointly throughthe SEM Committee.Operational ReviewDuring the fifth financial tariff period (1 October 2011 to 30 September 2012), the SEMoperated in line with expectations. The System Marginal Price (SMP) has been reflectiveof supply and demand and of international fuel prices, particularly gas. The graph belowshows the average monthly SMP from October 2011 to September 2012, which closelyaligns with changes in gas prices.During its fifth year, the market has operated smoothly, transparently setting prices,invoicing participants in a timely fashion and transferring funds securely. A high levelof operational performance was maintained, while implementing significant change tothe market with the advent of Intra-Day Trading, which went live on 21 July 2012.During the year in question, SEMO oversaw the processing of energy invoicing andsettlement totalling approximately €2.3 billion (including imperfections) in additionto capacity settlement of approximately €569 million. All SEM collateral requirementswere fully maintained.SEMO continued to maintain a high level of performance with regard to publication timesand responsiveness to participant and customer queries, despite an increased level (13%)of customer queries as a result of the Intra-Day Trading project. In addition, the availabilityof SEM central market system applications was maintained at a high level (99.79%).SEMO also administers the Modifications Committee, which is the industry forum forconsidering change to the SEM. A significant number of modifications (28) for the periodfrom October 2011 to September 2012, were raised by the Modifications Committee, withthe SEM Committee approving 26 modifications of those new and existing. Particular focusin rule changes in the area of Demand Side Management facilitated the increasedparticipation of Demand Side Units in SEM, while work continued on the development ofAverage SMPvs Average GasPriceVolume Weighted Average SMPGas Price Pence per ThermSystem Marginal Price (€/MWh)€80€70€60€50€40€30€20€10€0£1.00£0.90£0.80£0.70£0.60£0.50£0.40£0.30£0.20£0.10£0.00Oct-11Nov-11Dec-11Jan-12Feb-12Mar-12Apr-12May-12Jun-12Jul-12Aug-12Sep-12Gas Price Pence per Therm24