As part of the Good Friday Agreement, it was decided to create an all-island market for electricity, resulting in the development of the single electricity market (SEM). The SEM is based on a half hourly pool price where each generator must sell into a pool and each customer must buy from the pool at the system marginal price (SMP). Each 'generator' or power station submits a minimum bid price for each half hour period for the following day. The SEM operator (SEM-O) looks at the expected demand, each bid price and generates a schedule of when each power station should run.This is always based on letting the cheapest power stations run first. The day-to-day operation of the grid is still run by the national control centre (NCC). The NCC matches actual supply to the demand present at all times, keeping frequency and voltage within set tolerances. If extra power is needed, then the NCC dispatches the next least expensive power station.In theory, the bid price submitted for this incremental power station is now the new pool price. All remaining generators feeding the grid get paid this new pool price regardless of their bid.
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