FASS Programme: Future Developments for System Services

Following consultation, EirGrid has developed a new framework for the procurement of system services. This new FASS Programme, which replaces the previous DS3 Programme, aims to build on DS3 and achieve even greater results in the future. Our Energy team discusses the new framework.

Ireland has achieved its target under the EU Renewable Energy Directive for 16% of the country’s total energy consumption to come from renewable sources by 2020. This includes a target of 40% of electricity generation coming from renewable sources. Given this achievement, EirGrid has developed a programme to replace the existing programme for the procurement of system services. This original programme was implemented in 2017 to assist with achieving these targets. EirGrid has developed a programme to replace the existing DS3 System Services Regulated Arrangements Programme (DS3). The new programme is called the Future Arrangements for System Services Programme (FASS). It will be implemented with the aim to assist in achieving 95% System Non-Synchronous Penetration (SNSP).

Under the current DS3 programme, system services are procured by way of a six-monthly “gate-tendering process”. This process is run by EirGrid or the transmission system operator for Northen Ireland, SONI Limited. The new FASS programme will instead utilise a Day-Ahead System Services Auction (DASSA). This will involve daily auctions to determine the providers of the system services. The DASSA will initially be used to procure reserve services, with sufficient flexibility in the auction design to allow for the procurement of other services if required at a later stage. The programme will include the following features:

• The design of the DASSA system will be compatible with the 30-minute Trading Period duration used for other purposes.
• Participating service providers will submit a bid for each individual service for each Trading Period within the relevant Auction Timeframe. This is expected to be for a 24-hour period.
• The TSOs are also proposing measures to address auction volume insufficiency and clearing optimisation with the aim to minimise the cost of procuring system services.
• An all-island clearing price will be applied, per service and per Trading Period. Additionally, zonal pricing will be implemented where there are considered to be locational constraints for the relevant service.
• A secondary trading mechanism, on a central trading platform, will be available once the DASSA results are published, and up to 90 minutes before the relevant Trading Period commences.
• Incentives will be used to encourage the fulfilment of DASSA orders. These incentives will likely include penalties for non-delivery. The goal is to ensure accurate declarations of availability and prompt responses when called to do so.
• A process called the Final Assignment Mechanism will allocate payments on a merit basis. These payments will go to some service providers who were available to provide a required system service during the Auction Timeframe. This occurs when the volume of requirements for the system service were not fully met by DASSA Order Holders.
• A prospective provider of system services will need to complete a qualification process to determine its capability to provide one or more of the system services.

In addition to the DASSA, the FASS programme will include a Layered Procurement Framework which is set to go live in May 2025. This framework will be used to procure medium-term contracts of greater than one day, and up to 12 months. The particular products which will be procured under this framework are still pending further assessments. As well as this, the existing Fixed Contract Framework will continue to operate to remove barriers to entry for new technologies and ensure sufficient volumes of system services are procured as required.

Conclusion

Providers of system services should ensure that they are familiar with the features of the new FASS programme and are able to comply with the requirements under the new system. Moving away from the six-monthly auctions toward daily auctions, providers will have to be dynamic with the services they are able to provide and the levels of these services. Providers should be both reactive and proactive to ensure that they can capitalise on changing demand for services on a daily basis.

For more information and expert guidance, contact a member of our Energy team.

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