ELEXON insights: Negative short System Price on 18 September 2018
Emma Tribe’s SPAR insight article looks at Settlement Period 9 on 18 September 2018, when the System Price was -£6.25/MWh. In this Settlement Period the system was short, and the System Price set by the Market Index Price.
Published: October 2018
During Settlement Period 9 on 18 September 2018, the System Price was -£6.25/MWh. What made this negative System Price unusual was that the system was short for this Settlement Period, meaning that there was a net deficit of energy.
When the System Price is negative BSC Parties with long energy imbalance positions pay for their Energy Imbalance Volumes, and BSC Parties with short energy imbalance positions are paid their Energy Imbalance Volumes.
System Price and Market Index Price on 18 September 2018
This is the only incidence of the System Price being negative while the market is short since the introduction of BSC Modification P305 in November 2015.
Prior to P305, the System Buy Price and System Sell Price were calculated differently. There were four Settlement Periods where the market was short and the System Sell Price was negative, but where the market was short the System Buy Price was never negative.
On 18 September 2018, Settlement Period 9, National Grid took 1,020MWh of buy actions to increase the level of energy on the system, and -931.31MWh of sell actions to decrease the level of energy on the system.
The Net Imbalance Volume (NIV) for this Settlement Period was 90.63MWh, taking into account -1.96MWh that was De Minimis Acceptance Threshold (DMAT) Tagged.
All of the actions taken to increase the level of energy on the system were System Operator (SO) Flagged, which meant that there were no unflagged actions remaining after NIV Tagging. The Replacement Price, and consequently the System Price, was set by the Market Index Price (MIP).
Between Settlement Periods 1 and 10 on 18 September, the MIP was negative. Settlement Period 9 was the only Settlement Period that was short while the MIP was negative.
The MIP also set the System Price in Settlement Period 31 on this day, when the system was long and the MIP £54.60/MWh.
In September there were 68 Settlement Periods where the MIP set the System Price; for two of those Settlement Periods, the system was short. This was the only Settlement Period in the month where a negative MIP set the System Price.