Trade without borders

By Siàƒ¢n Green

The interconnection of regional power networks provides obvious economic and strategic benefits. Northern Ireland has been working to reduce its isolation, and with the help of a capacity trading system, is importing power from Scotland for the first time.

In September 2001, UK based Real-Time Engineering was awarded a contract by Northern Ireland Electricity (NIE) to develop a software system to facilitate electricity capacity trading across the Moyle interconnector, the newly commissioned power link between Scotland and Northern Ireland. Just six months later, the software went live, and capacity trading began.

The Moyle interconnector is the only power link between Scotland and Northern Ireland. Developed at a cost of €244 million and with a capacity of 500 MW, Moyle has effectively brought an end to the isolation of Northern Ireland’s electricity system. It will, therefore, help to enhance competition in the emerging electricity markets of the Province and the Republic of Ireland.

The interconnector capacity trading system is a key part of the operation of this link. The bespoke system allows users of the interconnector – the capacity holders and interconnector users (or ‘shippers’) – to trade capacity via the internet. With this project, Real Time has now developed all of the UK’s major internal cross-border electricity capacity trading systems, including one for the link between Scotland and England, developed as part of the New Electricity Trading Arrangements (NETA).

Harry McCracken, managing director of NIE said: “The establishment of the Moyle interconnector provides the first step in opening the Northern Ireland market to competition. Moyle will essentially end our isolation from the much larger electricity systems and markets of Britain and the European mainland.

Connected networks

Before Moyle was commissioned, links between Northern Ireland and neighbouring networks were limited. The North-South connector, linking Northern Ireland and the Republic of Ireland, was originally commissioned in 1970, and was restored in 1995. Its capacity is 300 MW, although there are plans to upgrade it to 600 MW. Standby connections also exist, which were commissioned in 1994. These will be upgraded to full interconnectors.

Together with Moyle, the upgrade of these interconnectors will enhance security of supply and bring operational reserve cost savings. In addition, customers will benefit as the links will allow increased competition in generation as trading between the regions increases and the markets are liberalized.

Scottishpower is one utility that plans to make the most of the benefits that Moyle will bring. The company already transmits electricity to England and Wales, and when Moyle was commissioned, it became the first generator to supply electricity to all the home nations simultaneously.

Scottishpower believes that the link will enable it to win new retail customers in Northern Ireland when the market is fully opened in 2005, and also sell generation to Irish energy companies.

Capacity trade

Power began to flow across the Moyle interconnector from Scotland to Northern Ireland in January 2002, although trading capacity has been limited until early 2003. Some 300 MW of capacity has been auctioned and allocated for the period to the end of September 2002. From October 2002 to the end of March 2003, 400 MW of capacity has been allocated and auctioned.

The Moyle interconnector HVDC project was developed by NIE and uses equipment supplied by Siemens (converter stations) and Alcatel Kabel Norge (submarine and underground cables)
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Capacity on the interconnector is auctioned by NIE to licensed utilities resulting in long term capacity contracts. The Interconnector Capacity Holders are then able to trade this capacity (i.e. allow other utilities to supply power across the link), and can also bid for short term capacity, as Scottishpower has done.

The software solution supplied by Real Time Engineering supports this process. The application is hosted by Real Time Engineering on servers at its Glasgow offices, and is accessed by users via the internet.

“The system is an internet application that allows capacity holders and shippers – or interconnector users – to do their trades,” says Stephen Lappin of Real Time. Firstly, NIE subsidiary SONI – the System Operator for Northern Ireland – enters into the system the details of the long-term capacity contracts and estimated available interconnector capacity. From this, the system then works out how much capacity each capacity holder is due. This is done for each half hour period in a day.

Before entering any data, SONI agrees with Scottishpower what the available capacity is. Available capacity will depend on transmission constraints as well as physical constraints.

“An algorithm works out how much of their contracted capacity each of the long-term capacity holders is able to get, and once this is known, the capacity holders can set up trades with interconnector users,” explains Lappin. “The capacity holder has to set up a trade with each interconnector user on the system, and they go through an authentication process for each trade.”

“Users in Northern Ireland enter what they believe the capacity is going to be, and as far as they are concerned, the system is fully automated and they don’t have to do anything more,” notes Lappin. “On the other hand, the interconnector capacity holders log onto the system on a daily basis and they will see what the total capacity is for the interconnector. They will also see their share of that, and the facility is also there for them to request short term capacity if all the long term contracts have been met.”

The interconnector will improve the security and efficiency of Northern Ireland’s power supply system
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The capacity holders therefore see the total capacity figure that they have for each half hour, and they then set up nominations with the interconnector users that they trade with. “There is a facility where they can copy previous trades they have carried out,” comments Lappin.

The interconnector users, when logged on, will see the nominations that have been made on their behalf by the capacity holders, and can then choose whether to agree to them.

“After gate closure, if the capacity changes and goes down, then there are algorithms in the software that scale down the agreed nominations. If this happens, there is no need for participants to do anything, although the interconnector users need to pay attention and adjust their own contracts or their own supply.”

The Real Time system does not capture or set any price data, according to Lappin. “That is a contractual matter … it’s purely energy that the system captures. It sends volumes traded to SONI for them to enter into their settlement systems.” In addition, there is no archiving or data storage facility. “That is something that will be looked at in later phases.”

System security

Security on the system is tight, says Lappin. “When a capacity holder sets up a trade with an interconnector user, authentication is done by a digital signature process on the system,” he explains, adding, “The interconnector user then has to log on and countersign the trade so that the trade can take place.” This must happen for each trade that takes place, and the digital signature consists of a password and Personal Identification Number (PIN).

In addition, only authorized IP addresses can access the website.

Fast development

The Real Time system went live in early March 2002. The company developed and implemented the bespoke software completely from scratch in around six months, although its experience with the Scotland-England interconnector did help, says Lappin. “The development phase lasted around 13 weeks, so it was a fairly quick build.”

“There was no industry wide testing,” notes Lappin. “We carried out some testing with SONI, and before it went live all interested participants were granted access to a test system to familiarize themselves with it. However, it’s not a terribly complex system.”

Lappin adds: “When it went live there were some changes that were asked for by Scottishpower as well as SONI. We made those changes and are now waiting for feedback from SONI on those.” These changes related to how data is viewed by the users, rather than to the system’s functionality.

Functionality of the software system will change as the operation of the interconnector develops. For example, electricity flows are only in one direction – into Northern Ireland – at the moment, and if Northern Ireland ever started to export power to the mainland, the software would have to be enhanced in order to handle this. “It is also intended that we should add the facility to manage the interconnector between Northern Ireland and the Republic of Ireland in the future,” adds Lappin.

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