GTAMS is an energy trading and advisory firm that provides services to support clients through the entire lifecycle of their business, from development to operations. They presented on the key regulatory drivers behind Ireland's new electricity market, called I-SEM. I-SEM introduces three electricity markets - day-ahead, intraday, and balancing. It also changes how subsidies will work by moving to auction-based capacity payments. GTAMS discussed the options clients have for participating in I-SEM and how to prepare for the changes. They noted opportunities for more liquidity but also concerns around clarity on subsidy design and intraday liquidity.

1. Gaelectric Trading and Market Services
Implementing I-SEM -
The Regulatory Drivers
presentation to
IWEA Spring Conference
29th March 2017

2. GTAMS Key Information

3. GTAMS Market Offering
Advisory Asset
Optimisation
Corporate
Greening
Electricity
Trading
New Entrant
Services
Power Purchase
Agreements
Supplier Lite
Services
Agreements
Market
Forecasting

4. GTAMS – Your Energy Partner
▪ We do not focus simply on “the transaction”; a single point in
time.
▪ Our success is possible given our focus is to support the life
cycle, from business planning & development to operations
and importantly beyond that, the ongoing drive to create
value in partnership with our clients.
▪ We are relationship focused; ensuring future opportunities
translate to value for our partners is an integral part of our
DNA.
▪ Our solutions are client focused, meaning you receive a
named contract manager, and have regular access to our
trading team for the purpose of executing trades and
developing strategy.
GTAMS Approach

5. • Initially – a well
understood
concept by most
• Now – A myriad of
decisions, policies
and registration
procedures
I-SEM High
Level
Design
Dec 2014
I-SEM Energy
Trading
Arrangements
2015
I-SEM Market
Rules Working
Groups
2015/2016
I-SEM
Trading and
Settlement
Code
2017
RO
Detailed
Design
2016
SEMOpx
Detailed
Rules
2017
Capacity
Market
Code
2017
I-SEM
Forward
Market
2017
I-SEM
BLG/TLG
/PMG
2016/2017
I-SEM - The Key Regulatory Driver
FTR’s
2017

6. I-SEM - The Key Regulatory Driver
• Breaking it down to the core principles which drive
business strategy;
Energy
Was: A single day-ahead
Market
Now: Three markets – Day-
Ahead, Intraday and
Balancing Market
Subsidy
Was: Explicit payment based on availability
Now: Auction clearing price with penalties for non-
delivery
Capacity
Was: Payment to top up generators to price floor
Now: Awaiting a review of existing REFIT interaction with
the I-SEM. A revised support scheme will also be
designed to interact with the I-SEM

7. How have we got to this point?
2
1
3
4
2011/2012 – Evolution v Revolution
1. A False Start
18/24 month process where high-level
design was translated to detailed rules
through working groups
3. The Detailed Design
Key market readiness processes
• IT Upgrades
• Market Onboarding
• Market Modelling
• Contract Pricing and Negotiation
4. Implementation
Series of decision documents setting out
high-level principles market structures
2. The High Level Design
Go Live – 23rd May
2018

8. Where to Next?
7642
April2017
July2017
December2017
December2017
23rdMay2018
August2017
December2017
Market Trial
Registration
Deadline
I-SEM Go-Live2018 RO
Auction
Go Live
Registration
Deadline
325 BDs
to Go….
April2018
End of Market
Trial
Start of Market
Trial
Capacity
Market
Registration
Deadline
Begin Market
Trial
Registrations!

9. Have I got Options? How do I prepare?
• There is no single strategy for all
– speak to your counterparty /
potential counterparty about
potential plans for your asset.
• Alternatives exist!
• For each option, projects must
consider;
– Costs & Risks
– Security & Benefits
– Bankability
– Implementation Risk & Timelines
Option 3
Option 4
Option 1
Option 2
AoLR
Direct Sales
Third Party PPA
Supplier Lite
Enter into PPA with 3rd party
intermediary
Map existing Supplier Lite
structure to new markets
- Manage yourself
- 3rd Party Trading House
Market Operator offering
standardised trading
service through AOLR
Sell directly to market
without PPA

10. • Awaiting an announcement on REFIT, existing projects must consider;
– Reference Market / Guaranteed Floor / Other?
• Current: REFIT calculated against System Marginal Price
• Will I-SEM create a reference market? Day Ahead? Or
• Is REFIT a guaranteed floor irrespective of markets traded in? Or
• A combination? Commercial incentives for ex-ante trades??
• New Projects must consider;
– Post REFIT??
• What will subsidy for new projects look like? CfD? Market Premium?
• How will contract be awarded? Auction? Annually?
The above interacts strongly with registration/trading strategy and overall market
efficiency!!!
How does REFIT Interact?

11. A Little More Detail – I-SEM Entity Models
• Participation in the Balancing Market is mandatory
• Transferring existing Day-Ahead registration to BM
quite straightforward
• Projects face a number of options when deciding how to
register/on-board with DA/ID exchanges
• Participants have choice between on-boarding with
Nordpool or SEMOpx/ECC for Day-Ahead/Intraday
• Clients preparations will depend on project
I. Scale of activity
II. Project Sponsor Preferences
III. Sponsor/Lender comfort re; structure
• Preparations can be complex & time consuming
GTAMS advice: Start registration activity now

12. Will I-SEM improve Market Dynamics?
• I-SEM presents clear challenges and the design is incomplete,
however the market is scoped in theory to provide more
opportunity.
• Potential includes:
– A functioning Forward Market
– An IDM with scope for batteries and assetless units to support liquidity
• DS3 needs to be a driver for entry
– Flexibility in trading strategies; more power to the generator to
determine an appropriate solution
– Reduced curtailment via efficient interconnection
– Capacity Contracts?

13. Opportunities for Liquidity
• Forecast updates and transparency on system conditions will
drive willingness to trade intraday
– System/Market Operators must ensure quick publication of data
– Currently 20-30 minute publication timelines in GB
• The following Liquidity sources should be encouraged
through market design
– Shared intraday order book across EPEX & Nordpool
– Coupling of Intraday Auctions with GB – clarity?
– Assetless units trading across markets
– Incentivising flexible generation/demand
• Should consider DS3

14. Concerns for Market Participants
REFIT Liquidity Registration Balancing
1 3 42

15. Conclusion
Opportunities Exist
Accepting the new market
dynamics- there are numerous
routes to market opening up to
cater for all participants
Engage Engage Engage
Speak to the existing counterparty-
open dialogue with others where
strategy is inflexible to your needs.
Engage with lenders - Project
finance is key!!
Project Finance –
Understand lender risk
Maintaining security of the
structure #1 priority, trading
strategy must be robust – no room
for “over-promise-under-deliver”.
Registration is
(nearly) Open
Ex-Ante registration is open in
April- start early or engage
market support to assist re; most
suitable solution.
Liquidity is a Challenge
– Innovation Required
Intraday liquidity is a concern;
assetless trading increases the
churn, however DS3 needs to
deliver market entry for flexibility
Subsidy Design
Participants need clarity to
progress their revised trading
strategy; timing??

16. For further information our solutions, contact the GTAMS Power Marketing Division;
GTAMS “In-Focus” Blog:
http://www.gaelectric.ie/gtams/in-focus/
Follow us on our GTAMS LinkedIn
Call us on: +353 (0)1 643 0800
Thank You