Provides details of the auction such as the auction ID, the direction, offered capacity, product period, any outages during the product period, the bidding period and times for publication of results.
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BritNed sells capacity, not electricity. Our customers purchase capacity which they use to move electricity between Great Britain and The Netherlands. The electricity that our customers transfer will come from their own generation units, a power exchange or a bilateral contract.
Once a customer is registered with BritNed, they will be able to participate in the various capacity auctions that we offer. Below we outline the basics of the auction process and run through an example to help explain how an auction works.
Auction Process Overview
Each auction will have an opening and closing time. Bids can be submitted during the auction period and they must be submitted before the auction closes otherwise, they will not be accepted.
After the auction closes, the provisional auction results will be published. These results will become final following the contestation period.
A chance for customers to validate the results of the auction and ensure there wasn’t an issue with the Kingdom or eCAT systems. This only applies to Long Term and Day Ahead auctions, there is no contestation period for Intraday.
The results of the auction with customers being awarded with any allocated Transmission Rights. These rights will be transferred to the Regional Nomination Platform where they can be nominated.
Auction Process Detail (with example)
Our auctions are simple but there are a few things to keep in mind:
- Each auction is per direction, we usually hold auctions at the same for each direction, but they are different auctions;
- Capacity is sold in hourly blocks, for example a weekend product is 48 hours of capacity rights and a 30-day monthly product is 720 hours of capacity rights;
- Capacity is auctioned at the Mid North Sea reference point and the total capacity at Mid North Sea is 1016MW (1000MW at the receiving end accounting for losses);
- Planned outages will be removed from the auction, for example a 30-day monthly product is 720 hours but there is a 24 hour outage during that month, the auction will not include the 24 hours so the monthly product will be 696 hours;
- Auctions use a closed format, whereby customers are unable to see the bids made by other participants in the auctions.
1. Auction Specification
Before every auction, there will be an auction specification published which provides all the details related to the auction.
For Long Term auctions there are two auction specifications that are published, a provisional and final. The provisional will include elements such as the deadline for returning already allocation capacity into the auction whereas the final will include the total offered capacity which will include any returns.
Day Ahead auctions may have a provisional specification and Intraday auctions do not have a provisional specification.
Customers submit bids into the eCAT system for Long Term and Day Ahead auctions, and the Kingdom system for Intraday auctions.
A bid consists of:
- Price [€/MW]
- Quantity [MW]
Each customer can submit multiple bids per auction and the total cost of the auction needs to be considered for collaterals.
Customers submit their bids into the eCAT system. There are 8 customers participating in the auction and below you can see a summary of their bids.
The auction system will evaluate all these bids to ensure that they have enough collateral posted. As an example, Trader 1 will need to have at least €83,700 in collateral posted to cover their bid:
• €0.75 x 150MW x 1 hour = €112.50 MWh
• €112.50 x 24 hours = €2,700 per day
• €2,700 x 31 days = €83,700
If a customer does not have enough collateral posted, their bids will not be accepted in system.
3. Provisional Results
Once the auction closes, all the bids are ranked in descending order. The quantity of each bid is added together starting with the highest bid and the marginal clearing price is determined once the requested capacity meets the offered capacity. For Long Term auctions, a Reserve Price will be applied which will vary depending on product and direction. The auction system will take the Reserve Price into account when determining the results. Day Ahead and Intraday auctions do not have reserve prices.
After the auction closed at 11:40 on 16 Jul 2021, the 8 customers participating in the auction had their bids ranked. For this auction, there is a Reserve Price of €0.60.
The auction system will allocate capacity until the offered capacity or the reserve price is reached. Traders 5, 4, 6, 7, 3 and 1 all submitted a price above the reserve price and their cumulative requested capacity is above the offered capacity so it will be the lowest accepted bid still within the offered capacity that will set the marginal price and clear the auction. The reserve price will not have an impact on this auction.
Looking at the table above, Trader 3 set the marginal price as their requested capacity of 75MW took the cumulative request capacity up to the offered capacity. Trader 3 will receive 40MW of their requested 75MW as this was the remaining capacity after Traders 5, 4, 6 and 7 were allocated their requested capacity.
The table below summarises the results of the auction for each customer.
The results of the auction are published on the JAO website in a summarised form that doesn’t show the individual bids on the customers.
Every Long Term auction will have a Reserve Price applied, in the example above the Reserve Price is lower than the clearing price. To see the same provisional auction results with a higher reserve price applied, see this example.
4. Contestation Period
After the provisional auction results are published, there will be a period where customers can review the results before they become final. This is to ensure that there were no technical issues with the eCAT system that produced erroneous results. This only applies to Long Term and Day Ahead auctions, there is no contestation period for Intraday auctions.
The contestation period cannot be used to correct errors that a customer may have made during the auction.
Following the publication of provisional auction results at 12:05 on 16 Jul 2021, the 8 customers reviewed their allocations within the eCAT system. No issues were found, and no contestations were raised.
5. Final Results
After the contestation period ends, the provisional results are considered final. All customers that were allocated capacity from the auction will have their transmissions rights available for nomination on the Regional Nomination Platform (RNP).
Traders 5, 4, 6, 7 and 3 will be able to see their transmission rights for August 2021 in RNP. If they decide to use this capacity, they will need to inform BritNed by submitting a nomination before the relevant Long Term Nomination Gate closes.
See our Nomination Basics for an overview of how this works.