**Update** Calculation of Strike Price

Affected Period

Status
Closed

Category
Balancing

Run Type

Created

Last Updated

Thank you for submitting feedback please find the latest update from the SEM Committee in relation to this matter here.

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Market Participants are invited to provide comments with supporting data and documentation where available before 10th March 2022 13:00 to info@sem-o.com

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Dear Market Participant

In accordance with the Market Operator obligation under the T&SC Section F.16.2 'Calculation of Strike Price' and approved methodology communicated at the PT Call on 07/10/2021, SEMO calculated the Strike Price(PSTRm) for March 2022 as 755.47 Euros based on inputs available as of 25/02/22.

A number of Participants have requested the Regulatory Authorities that an exception is made for SEMO to urgently re-calculate the March Strike Price to reflect the sudden rise in gas prices driven by the international situation. This will be subject to SEMC approval.

The standard calculation process would apply, with refreshed inputs for ICE UK Natural Gas Futures Price (PFUELNGm), ICE EUA Futures (PCARBONm) and Platt's daily assessment price for 1% FOB NWE Cargoes Fuel Oil (PFUELOm).

Due to system restrictions, the updated Strike Price would be effective for all settlement dates from the 1st March inclusive.  March 2022 Initial Settlement publications already issued would reference the agreed Strike Price at M4 Resettlement.

As an example, based on today's input values below, this would result in an indicative recalculated Strike Price of EUR 1432.90*.  

PSTR PARAMETER

INDEX VALUE

INDEX EUR  VALUE

PCARBONm

64.99 EUR/tCO2e

64.99 EUR/tCO2e

PFUELNGm

489.89 £p/therm

586.25 EURc/therm

PFUELOm

714.00 $/t

635.16 EUR/t


Market Participants are invited to provide comments with supporting data and documentation where available before 10th March 2022 12:00 to info@sem-o.com

If confidentiality is required, this should be made explicitly clear in the response.

Please note that all responses will be collated and provided to the Regulatory Authorities (RAs) to inform their approval or rejection of these potential changes to the March Strike Price.

 

*This does not represent a forecast of actual electricity price but rather a parameter used as a reference price for a number of calculations within the balancing and capacity markets.