1. Impact of Increasing Meter Errors on the SEM Modifications Committee Meeting 65 3 rd December 2015

2. Background; Size of issues; Impact on the SEM; Conclusions; Considerations for I-SEM. Content

3. MOD_04_15 first raised at Modification Committee Meeting 61 on 15 th April 2015; TSO analysis highlighted the causes of incorrect Metering data submitted to SEMO and how these could be prevented; These affect ROI DSO connected Generators for which the TSO is Meter Data Provider (MDP) in the SEM; Committee asked ROI TSO and DSO for a cost/benefit analysis of upgrading the Meters and how such errors have impacted the SEM; Background

4. 23 DSO connected Generators, with TSO as MDP, were in the SEM in Jan 2013; these became 29 by Jan 2014 and 32 by Jan 2015*. The TSO, as MDP, have identified the following Metering errors: The identified Metering errors up to Nov 2015, are currently 55. *By Dec 2015, four additional units have joined the SEM, bringing the total up to 36. Size of Issue

5. The majority of these errors were identified and resolved before D+3 and therefore had no impact on the Market; Those not identified in time resulted in Formal Queries: These represented 8%, 11% and 13% of all Settlement Queries raised for each calendar year (2015 only up to Nov.). Size of Issue cont.

6. In 2015, the MDP has observed a decrease in the number of metering issues; however, Formal Queries to the SEM have remained stable; All units are VPTGs except 7* currently completing Grid Code testing; Further 82* units above 5MW are in the planning for Gate 3; The number of DSO connected Price Effecting Units in the SEM could rise to 114*; It is expected that, as the number of units increases, so will the number of errors and relative Formal Queries; This has the potential of becoming highly disruptive and impact the efficient running of the market. *Numbers subject to review as units opt to merge or split Impact on the SEM

7. The Settlement Queries affected VPTG Generators (Price Effecting in the SEM) in all but three cases; None of these errors were identified within the timelines for Data Queries; Errors were mostly resolved in M+4, because of small monetary impact, but some occurred for prolonged periods; Nine queries affected two or more days; one of these affected 31 days; It is likely that in those cases a Re-price would have occurred should the error be identified in time; Following MOD_01_15, six queries were not raised: errors within +/- 1MW increasing average monetary error from approx €150 to €748. Impact on the SEM cont.

8. Pricing signals might not work correctly, over-estimating or under- estimating the SMP; Prolonged errors could impact Constraints and Participants revenues; Amounts resettled for such issues to date, vary from less than €1 to about €138,500 and could be either positive or negative; Resettlements result in new versions of Statements for the whole billing period for all Units in the Market; All Units are therefore affected even in cases of minor adjustments; Trend in 2015 of higher number of sizeable issues. Impact on the SEM cont.

9. SEMO welcomes any improvement in the quality of Meter Data received to prevent and reduce instances of Resettlement or Re-price; This will avoid additional administrative burden to Participants, MDP and MO and will ensure the SMP is based on correct pricing signals; An increase in the number of queries will affect all areas in SEMO: Customer service: management of increased number of Formal Queries; Market Analysis: increase in the number and sizes of manual assessments; Pricing: increase in Re-prices and relative ad-hoc Resettlement; Settlement: increase in Resettlement for both Energy and Capacity; Credit and Funds Transfer: increase in the number of Invoice runs. SEMO has been able to absorb these additional workload to date; Additional resources will be needed should query numbers increase substantially in line with the increase in Units joining the Market. Conclusions

10. SEMC view to date is: ‘overall Metering framework will endure for I- SEM…including ‘as much as possible of the timings and processes’; ‘work will be under the governance of the RAs’ *. Removed current Price Effecting/Non Price Effecting units distinction; As any unit could be Price Maker, should this require harmonization of metering standards across all units? Will all MDPs have a 7 day operation? Timelines for submission of Metered data will affect trading ability; Could metering errors cause revenue uncertainty and affect the unit’s ability to respond to Imbalance pricing signals? Imbalance Settlement should be limited to the affected unit; Diminished impact to other Participants; will these errors be addressed at scheduled M+4 and M+13? * Extracts from I-SEM ETA Detailed Design Decision Paper SEM-15-065 Considerations for I-SEM

11. Questions