System Inertia Cost

This data set gives indicative values for the average daily price (in £ per GVAs) for BM accepted offers tagged as being for System Inertia. The tagging process identifies the most likely main reason for a Balancing Mechanism action, and is a best endeavours process, as individual actions can be taken for a combination reasons. The data is published at daily resolution, and is calculated by summing the total cost of all offers tagged in each day as System Inertia actions and dividing by the sum of estimates of the inertia provided. Worked examples are provided below.

1. ESO sum up the total cost of actions instructed in the BM which are tagged as system inertia for a given day.
2. ESO sum up the total volume of inertia shortfall (GVA.s) in each settlement period of the day.
3. ESO divide the total cost of inertia actions per day by the total volume of inertia shortfall (GVA.s) to give the average daily cost per GVA.s.

Example 1:

• Settlement Periods 4-7 (inclusive) = 1 GVA.s shortfall in each period replaced at total cost of £5,000.
• Settlement Periods 8-11 (inclusive) = 4 GVA.s shortfall in each period replaced at total cost of £40,000. Total cost for the day = £5,000 + £40,000 = £45,000 Total inertia volume instructed for the day (on SP basis) = (1 x 4 SPs) + (4 x 4 SPs) = 20 GVAs Average daily inertia cost = (45,000 / 20) = £2,250/GVA.s

Example 2:

• SP 4-8 = 1 GVA.s shortfall in each period replaced at total cost of £5,000.
• SP 8-16 = 4 GVA.s shortfall in each period replaced at total cost of £80,000. Total cost for the day = £5,000 + £80,000 = £85,000 Total inertia volume instructed for the day (on SP basis) = (1 x 4) + (4 x8) = 36 GVAs Average daily inertia cost = (85,000 / 36) = £2,361/GVA.s

These examples represent the average daily inertia cost (£/GVA.s) using the actions we take on a SP basis where system inertia is below our minimum operating level.