Captured Carbon
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Captured Carbon
Mod_03_18 – DSU Concerns
DSUs also have a trading site supplier unit as with autoproducers
Functioning is different to autoproducer but credit issue persists
The demand of this site is determined by the DSU
Demand is set to DQ * -1
By necessity, the TSSU can only consume energy of the DSU
This is design so that the demand site nets to zero in energy settlement
Without modification, this demand feeds into credit calculations
Can lead to outturn collateral positions being too high
This only affects undefined exposures
Defined exposures/traded not delivered are unaffected
DSUs and Energy Settlement
By design, DSU and TSSU will net with each other
This is so that the DSU is not in receipt of energy payments
It was decided in I-SEM to continue to do this through the TSSU mechanism
Both units are settled under the same PT
This leads to a net exposure to the market of zero
For the TSSU to have any charge, the DSU will have an opposite payment
Single invoicing covers the risk that the DSU will be paid but TSSU will not pay
However, undefined exposure on the DSU and TSSU are not aligned
TSSU has longer exposure period
Leads to credit reflecting more demand exposure than generator benefit
Value of unpaid/unbilled invoices likely to net to zero
DSUs and Energy Settlement – Ex Ante
Trading
A risk to the market can exist where the DSU trades ex-ante
Here the DSU may take a position on the market spread and create an
exposure to SEMO
Example:
DSU sells 10 MW in DAM but TSSU buys 0 MW
TSSU has CIMB of 10 MW * PIMB due to SEMO. This is not covered by SEMOpx
revenues
In this example there is an exposure to SEMO based on the trading
Any solution must take account of ex-ante trading and the effect on risk
For Discussion – Solution Requirements
We are of the view that potential solutions should reflect:
That settlement will ultimately be on a net basis between DSU and TSSU
That it is not possible for the TSSU to have demand without corresponding DSU
dispatch (i.e. QM is set equal to Dispatch Quantity * -1)
We would welcome the view of SEMO on its findings at arriving at the relevant
interim solutions for DSU collateral
A comprehensive exploration of DSU and TSSU mechanisms in energy settlement, focusing on credit issues, exposure alignments, and ex-ante trading risks. Discusses potential solutions to enhance efficiency and net exposure balance between units.
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Presentation Transcript
Captured Carbon Renewable Energy Route to Market Trading Consultancy
Mod_03_18 DSU Concerns DSUs also have a trading site supplier unit as with autoproducers Functioning is different to autoproducer but credit issue persists The demand of this site is determined by the DSU Demand is set to DQ * -1 By necessity, the TSSU can only consume energy of the DSU This is design so that the demand site nets to zero in energy settlement Without modification, this demand feeds into credit calculations Can lead to outturn collateral positions being too high This only affects undefined exposures Defined exposures/traded not delivered are unaffected
DSUs and Energy Settlement By design, DSU and TSSU will net with each other This is so that the DSU is not in receipt of energy payments It was decided in I-SEM to continue to do this through the TSSU mechanism Both units are settled under the same PT This leads to a net exposure to the market of zero For the TSSU to have any charge, the DSU will have an opposite payment Single invoicing covers the risk that the DSU will be paid but TSSU will not pay However, undefined exposure on the DSU and TSSU are not aligned TSSU has longer exposure period Leads to credit reflecting more demand exposure than generator benefit Value of unpaid/unbilled invoices likely to net to zero
DSUs and Energy Settlement Ex Ante Trading A risk to the market can exist where the DSU trades ex-ante Here the DSU may take a position on the market spread and create an exposure to SEMO Example: DSU sells 10 MW in DAM but TSSU buys 0 MW TSSU has CIMB of 10 MW * PIMB due to SEMO. This is not covered by SEMOpx revenues In this example there is an exposure to SEMO based on the trading Any solution must take account of ex-ante trading and the effect on risk
For Discussion Solution Requirements We are of the view that potential solutions should reflect: That settlement will ultimately be on a net basis between DSU and TSSU That it is not possible for the TSSU to have demand without corresponding DSU dispatch (i.e. QM is set equal to Dispatch Quantity * -1) We would welcome the view of SEMO on its findings at arriving at the relevant interim solutions for DSU collateral
