Central administration, regulator
Participants of the electricity market
Contractors and subcontractors
Scientific and research institutions
Employees and potential employees
We are engaged in work on national and European regulations that create the future of the Polish power sector and the economy.
The power system is in permanent change. The current trends suggest that in future the management of the power system will undergo thorough changes.
Trends and market context
Market objective in the context of network development
The key national legal conditions of PSE’s activities as transmission system operator arise from Article 9c (2) of the Energy Law. Under the Act, the transmission system operator is an energy undertaking involved in power transmission, responsible for network operation in the transmission system, current and long-term operational security of the system, operation, maintenance, repairs and necessary expansion of the transmission network, including interconnections with other power systems.
Pursuing its development tasks, PSE has been preparing the Development Plan for meeting the current and future electricity demand (hereinafter: PRSP), which is aimed, among other things, to devise an investment plan adequate to the market needs, containing investment projects over a ten-year timespan. The main aspects taken into account in this process are the current and forecasted electrical power and energy supply and demand, and the security of electricity supply, taking into account the conditions set forth in the Energy Law, i.e. resulting from:
- the National Spatial Development Concept,
- Voivodeship Spatial Development Plans,
- Poland’s Energy Policy 2030,
- ENTSO-E 10-Year Development Plan (TYNDP),
- implementation of connection agreements and defined conditions for connection to the transmission network,
- fulfilment of other commitments, including arrangements with the Distribution System Operators (DSOs).
The above requirements show that in addition to the obligation to ensure the security of energy supply within the territory of the country, the Transmission System Operator also takes into account the needs of developing the broad-based European-wide energy market environment.
The needs arise, among other things, from a dynamic development of renewable (mainly wind) energy sources, the need to reduce CO2 emissions, and elimination of energy islands. Having regard to the investments provided for in the TYNDP, the PRSP contributes to the achievement of European energy objectives, such as security of supply, balanced development of the power system, and creating conditions for an efficient European electricity market. It also falls in line with the European development trends towards the implementation of the capacity market, development of e-mobility, and the need to take into account in its activities the growing role of the environmental aspects.
PSE's position on the short-term and long-term prospect of market development to the year 2030
The implementation of the electricity market in Europe began in 1996 when the First Energy Package was published. The Package introduced competition rules to the electricity generation and trading segment. The regulations contained in the package were refined twice, in 2003 and 2009, by the Second and Third Energy Packages. Their aim of the changes was to accelerate the implementation of the electricity market, particularly through the establishment, under the Third Package, of the Agency for the Cooperation of Energy Regulators (ACER) and the European Network of Transmission System Operators (ENTSO-E).
The Third Package also introduced the concept of Network Codes as European legislation at the level of regulation ¬ i.e. legislation directly applicable in the Member States with no need to be implemented in the national law. They set out the rules for the operation of interconnected European power systems in a competitive environment.
In the course of further work, which involved all key industry organisations of the power sector, including ENSTO-E, EURELECTRIC (generators), EFET (traders), ERGEG (regulators) and the European Commission, the Target Model for Europe concept was developed. The concept introduced solutions based on the Market Coupling mechanism and the Flow-Based methodology as arrangements recommended in the capacity allocation process.
The structure of the European electricity market was also defined, which covered the following segments:
Cross-Border Balancing Market
The pillars of the target model of the European electricity market are as follows:
of power system representation;
Flow Based Market Coupling (FBMC) method
as the basis for capacity calculation and allocation.
What is particularly noteworthy is the separation of the FBMC functions of capacity calculation and allocation between system operators – with regard to transmission capacity calculation, and energy exchanges – with regard to transmission capacity allocation.
In the process of discussions held on various forums concerning possible directions towards detailed solutions, PSE has often shared its views on the organisation of the electricity market.
Capacity allocation method
Due to the meshed network structure in continental Europe and the resulting complex power flows, the Flow-Based method should be used in this area for capacity allocation. For Nordic countries, whose networks have a radial structure and, therefore, less complex power flows, the use of the Available Transmission Capacity (ATC) method has been authorized.
The Flow-Based method maps physical power flows across the network. It allows their acceptable values to be controlled and maintained for each network element. The method is currently used for capacity allocation only in the CWE (Central West Europe) region, i.e. in Germany, France, Belgium, the Netherlands and Austria. In the CEE region, to which Poland has belonged until recently, the ATC method is still being used. According to the provisions of the network codes, the Flow-Based method is to be used in the CEE region, now as part of a larger CORE region created by the merger of the CEE and CWE regions due to begin in 2019.
Implementation of the Flow-Based method will be a technically complex process, and difficult in terms of obtaining acceptance from all market participants. In spite of the indisputable case for its application – both from the point of view of efficiency of capacity allocation and system operation security – significant controversies over its application are expected. This is primarily due to the considerable complication of the method and therefore rather non-intuitive results, as well as concerns about the extent of the changes it will cause to the rules currently in use.
The implementation of the Flow-Based method itself will not ensure correct results in terms of capacity allocation. It is only a necessary condition for the achievement of this goal. To achieve satisfactory results, capacity allocation based on this method must involve correctly configured bidding zones. These zones should be small enough to ensure that the impact of commercial transactions made within them on other zones is negligible. Otherwise, the results of the Flow-Based method will not be correct and will lead to controversy over its use.
Representation of network resources in market processes
The European electricity market concept is based on a zonal model. The model provides that the European power network is divided into zones grouping together dedicated system areas (bidding zones). The assumption is that there are no transmission constraints within zones (the zone is a “copper plate”) and consequently the same electricity price applies within the zone. Hence, transactions within a zone can be concluded freely with no need to allocate transmission capacity for their execution. However, capacity allocation applies to connections between zones whose capacity may be insufficient to meet the needs of market participants.
Currently, the European market structure is based on a division corresponding to country borders, with the following deviations from this rule:
- Germany, Luxembourg and Austria form a single zone;
- Sweden, Norway and Italy are divided into several smaller zones.
Bidding zone structure of the European electricity market
Fig. 1. Bidding zone structure of the European electricity market.
The European energy market model introduces a zone verification procedure (bidding zone study) under which the existing zones will be cyclically (every 3 years) evaluated for validity and redefined where required. In March 2018, the first iteration of the process was completed. The study covered the Central Europe area (CORE+ region) and proved to be a great challenge for the TSOs participating in the study. Consequently, the study did not provide sufficient arguments to recommend the retention or modification of the present configuration of bidding zones.
In parallel with the above zone validation process, as a result of numerous interventions of the President of the Energy Regulatory Office and our company, supported by ACER, work has been in progress on the division of the Austrian-German zone into two zones: Austria and Germany. A decision establishing transmission capacity calculation regions, issued by ACER on 17 November 2016, introduced the obligation to allocate transmission capacity at the Austrian-German border. Capacity allocation on that border is to start in Q4 2018.
In Europe, there are extreme views on the optimal structure of the zones. Some of the European market participants are in favour of large areas in the belief that they increase the freedom of electricity trading. From the point of view of market efficiency, however, fair conditions of competition and system security, it is reasonable to use as small zones as possible, preferably corresponding to the power system nodes. The smaller the zone size:
- the better conditions for representing correct electricity prices – which provides correct price signals for market participants, supporting the increase in the efficiency of the use of generating sources and the so-called active demand side. Correct price signals also support investment decisions concerning the location of new generating sources and development of the transmission system;
- the greater capacity available to market participants on competitive terms – which supports the increase in the efficiency of network use.
More accurate representation of the network in market processes, achieved owing to smaller zones, a better fulfilment of the security of electricity supply in the context of commercial transactions. This limits the scope and cost of the remedial actions taken by system operators to meet safety criteria. As a result, electricity prices more accurately reflect the actual cost of electricity supply, thus reducing the cost of energy supply for the purposes of remedial actions, covered by transmission tariffs. Consequently, the costs of electricity borne by consumers can be subjected to competitive pressure to a greater extent.
The pricing mechanism, including scarcity pricing
Price signals are responsible for coordinating the relationship between supply and demand. If supply is too low relative to demand, rising prices stimulate supply growth while simultaneously reducing demand. In in the case of surplus supply over demand, decreasing prices limit supply while increasing demand. This is how the market is balanced, resulting in commercial transactions. In practice, this means providing production volumes that are adequate to consumers’ demand, in system locations and using generation methods that are relevant to the consumption centres and the variability of demand over time.
In the electricity market, the incentives that support the ability of generating sources to meet the above requirements are mainly created by two prices:
- electricity price,
- reserve power price.
The first one determines payment for the generating capacity used to generate electricity. The other one determines the payment for capacity representing surplus power necessary to ensure the security of energy supply. Due to the volume of generation capacity to which these prices apply, the electricity price is of fundamental importance in terms of the impact on the level of generation capacity. Payments for generated energy are the main source of financing the maintenance and operation costs of generating sources. From the point of view of the effectiveness and quality of price signals, the price of reserve power plays a leading role owing to the fact that shortages in available generating capacity become first visible in a lack of reserve power. This is despite the fact that it serves to account for only a small volume of generating capacity.
Price formation in a way that creates such incentives is especially important in the balancing market, i.e. during electricity supply. Thanks to this, market participants – through energy prices – receive information about the real and full costs of electricity supply. As such formation of prices may be highly volatile as they reflect the dynamic situation in the system, the prices provide incentives for voluntary trading to hedge the value of these prices in the medium and long term. Thanks to such transactions, on the one hand, values of electricity prices for consumers are stabilised and, on the other hand, the development of generation resources is supported.
In the price formation process, consumers with the capability to flexibly respond with their electricity consumption play a key role. Their bids should be treated according to the same rules as those applicable to generating sources, but those bids have a wider role to play. They carry information on the price level at which energy supply is no longer justified in terms of benefits for the consumer resulting from consumption. Therefore, access to those offers makes it possible to rationalise electricity prices having regard to its utility to consumers, and thus to rationalise the current level of electricity supply and the development of generating resources.
Integrated approach to electrical energy and reserve power
Electrical energy and reserve power are interrelated products, as they can be delivered from a single source. They are also interrelated owing to their simultaneous use in supply to consumers. Electrical energy is supplied to consumers, whereas reserve power secures the continuity and dependability of the supply.
Despite those common features, the concept of the European electricity market implies separate treatment of these products in market processes. Electrical energy is sold and purchased by market participants on exchange markets and through bilateral transactions. The acquisition of reserve power remains the domain of system operators. Separation of these products results from the approach forced through in Europe for many years, based on the assumption that technical issues, including in particular the provision of required levels of reserve power, should be separated from electricity trading. This view was driven by the simplicity of electricity trading, desired by market participants, analogous to other market commodities.
An alternative to the current organisation of market processes is the integrated acquisition of electricity and reserve power within a single market process. In order to eliminate – or at least significantly reduce – the need for redispatching, market processes should be performed based on an accurate representation of network resources. With this approach, the potential of sources can be effectively allocated to the supply of electrical energy or reserve power, depending on where it brings more value, and thus contributes to a greater extent to reducing the cost of electricity delivery to consumers. On the other hand, a detailed representation of the network ensures the technical feasibility of commercial transactions while allowing optimal allocation of transmission capacity for the performance of commercial transactions.
As a result, the requirements of security of energy supply are reflected in energy prices, which is the basis for its correct pricing. Such a model meets the cost effectiveness criteria mentioned before, including pricing accuracy and security criteria.
The day-ahead market (DAM) has been operating in Poland since 30 June 2000, and it is also the physical spot market for electrical energy.
The role of the DAM is to:
- create electricity prices for contracts concluded in the wholesale electricity market in Poland;
- provide the capability for balancing contract positions;
- allow the valuation of enterprises that deal mainly with electricity generation;
- generate investment signals for building new generation units.
Quotations are made in the DAM every day, including holidays. Trading is carried out one day ahead of the day on which physical delivery of energy is planned. The minimum order volume is 1 MWh.
The day-ahead market consists of 24-hour markets and block contracts of three types.
provides for the delivery of 1 MWh of electrical energy
in each hour of the day;
provides for the delivery of 1 MWh of electrical energy
between 8:00 and 22:00 hours;
provides for the delivery of 1 MWh of electrical energy
between 23:00 and 7:00 hours.
The price exchange clearing price for a given hour is taken to be a price at which a balance is achieved between demand and supply, i.e. the point where the demand and supply curves intersect.
Participants of the competitive electricity market increasingly often opt for transactions in the day-ahead market, choosing current transactions instead of long-term contracts. The reason for market participants’ growing interest in current transactions is the fact that the market responds dynamically to the customer's needs. In addition, transaction made on the DAM yield higher financial benefits than transactions made in forward markets.
Development of Market Coupling
In the context of the planned integration of the national electricity markets, the main implementation measures are centred around the implementation of the common market encompassing the day-ahead and intraday markets. We actively participate in all processes related to the implementation of Flow-Based Market Coupling on all cross-border interconnections from Poland, with a special focus on synchronous connections.
The central segment of the European electricity market model is to be the day-ahead market based on the Market Coupling (MC) process, with trading gate closure time at 12:00 hours. It is a mechanism within which exchange prices for each bidding zone in Europe can be calculated in a coordinated manner, in a common process, with a single computational point. Capacity allocation is to be based on the price difference between bidding zones. Thus it is an implicit auction model, i.e. auctions that combine transmission rights trading with electricity trading. Market participants do not reserve transmission capacity for the purposes of their cross-border transactions, and they only make purchase/sale transactions in the market to which they are geographically assigned (to put it simply). Capacity allocation through the MC mechanism takes place automatically, in the course of energy trading in a manner that maximises the total market surplus. A graphical illustration of Market Coupling is shown below.
Graphical illustration of Market Coupling
Coupled markets Cross-border exchange constraint
Fig. 2. Graphical illustration of Market Coupling
Implementation of the European Market Coupling is to take place under regional projects which are then to merge into a pan-European project. Currently, the following projects are being developed:
MRC (Multi-Regional Coupling) – the basic Market Coupling initiative in Europe;
CORE FB MC – a project of the Central-East Europe region;
4M MC – operating in the Czech Republic, Slovakia, Hungary and Romania.
Market Coupling initiatives in Europe
Fig. 3. Market Coupling initiatives in Europe
Flow-Based Market Coupling
Currently, all MC projects, except the CWE region, are based on the bilateral capacity calculation methodology NTC, in which interdependences of electricity flows across each border are not taken into account. However, such a mechanism is not appropriate for large, interconnected bidding zones with strongly meshed transmission networks (such as Continental Europe). In order to ensure the economic and technical efficiency of the European electricity market, it should operate on the basis of the principles of coordinated capacity calculation and allocation. Flow-Based Allocation (FBA) is such a mechanism. It makes it possible to take into account interdependencies between commercial exchange transactions on individual borders of bidding zones and power flows in an interconnected power system.
FBA will allow optimal use to be made of available network and generating resources, in addition to equal treatment of users in all bidding zones, as well as increased available capacity and reduced unscheduled flows. The obligation to use the FBA mechanism in the Continental Europe zone is provided for in Commission Regulation (EU) 1222/2015 (CACM) establishing a legal framework for the European electricity market.
Several FBA implementation projects are currently in progress, which arises from the provisions of the CACM (the Regulation adopted the FBA as the basic methodology, conditionally allowing ATC to be used in zones where the FBA does not provide an added value). The proposal for the FBA-based capacity calculation method for the CORE CCR was submitted by TSOs to NRAs in September 2017. However, the regulators demanded the TSOs to make adjustments to the proposed methodology, and therefore a new version was submitted to NRAs in June 2018. This has caused the postponement of the implementation of the FBA methodology in the Core region to the first half of 2020. Introduction of the FBA is also being analysed e.g. in the NORDIC and BALTIC regions, as well as in the region covering the northern border of Italy (Central-South CCR).
Price Coupling of Regions initiative
Price Coupling of Regions (PCR) is the initiative of seven European Power Exchanges (APX, Belpex, EPEX SPOT, GME, Nord Pool Spot, OMIE and OTE) to develop a single price coupling solution to be used to calculate electricity prices across Europe and allocate cross-border capacity on a day-ahead basis. The integrated European electricity market is expected to increase liquidity, efficiency and social welfare.
The initiative of energy exchanges originally involved the day-ahead electricity markets in Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom. The initiative emerged in 2009 and the PCR parties signed the cooperation agreement in June 2012. It is open to other European Power Exchanges wishing to join. In 2016, PCR was joined by the Polish Power Exchange TGE.
PCR is based on three main principles:
One single algorithm.
The single algorithm gives a fair and transparent determination of day-ahead electricity prices across Europe and allocates cross-border capacity. The algorithm was developed respecting the specific features of the various power markets across Europe. It optimises the overall welfare and increases transparency.
Robust operation of the algorithm.
The PCR process is based on decentralised sharing of data, providing a robust and resilient operation.
Individual responsibility of energy exchanges.
The PCR Matcher Broker (PMB) allows the exchange of anonymised order books and cross-border transmission capacities among the exchanges to calculate reference prices and electricity transmission volumes between all bidding zones.
Commission Regulation (EU) 2015/1222 of 24 July 2015 establishing a guideline on capacity allocation and congestion management (“CACM Regulation”) introduces the obligation to implement a pan-European solution for single intraday coupling. In February 2017, the European regulatory bodies, MCO Plan (Market Coupling Operation Plan), declared the solution implemented by the energy exchanges on a voluntary basis under the XBID (Cross-Border Intra Day) project to be the target solution for the European Intra-Day Market.
The significance of the Intra-Day Market will be growing with the increase of the share of intermittent generation (RES) in the European generation mix. The solution implemented under XBID will make it possible to enter into transactions on a continuous basis across Europe within the limits of available capacity.
The basic elements of the XBID solution are as follows:
the central IT system containing the following modules:
Capacity Management Module (CMM), Shipping Module (SM) and Shared Order Book (SOB).
Local Implementation Projects (LIPs)
representing XBID implementation on individual cross-border interconnectors or interconnector groups.
The launch of the XBID solution, which included the simultaneous launch of 10 LIPs (first LIP wave) took place on 12 June 2018 and covered the following countries: Austria, Belgium, Denmark, Estonia, Finland, France, Germany, Latvia, Lithuania, Norway, Netherlands, Portugal, Spain and Sweden. The second LIP wave is scheduled for summer 2019.
PSE participates in intensive activities aimed at the implementation of the XBID solution on cross- border interconnections with neighbouring countries which are members of the XBID Project. The activities are pursued under two local implementation initiatives: LIP15 – covering cross-border connections with Germany and the Czech Republic, and LIP16 – covering connections with Lithuania and Sweden. The expected time of operational launch of XBID on the borders covered by the LIP15 and LIP16 initiatives is mid-2019 (second LIP wave). The regional coverage and the list of entities engaged in LIP15 and LIP 16 are shown in Fig. 4. The figure also shows which areas belong to the first and the second LIP wave. The areas marked as operational have borders for which the XBID solution was launched as part of the first wave.
Fig. 4. Regional coverage of the local XBID implementation initiatives (LIP15 and LIP16)
PSE and the Polish Power System
Transmission network development plan
The transmission network development plan (PRSP) is based on the provisions of the Energy Law. The document takes into account the National Spatial Development Concept and the assumptions of the Energy Policy of Poland. It is created for 10 years and updated every 3 years. The document is coordinated with the President of ERO. It is also subject to consultations with the parties concerned, including opinions of regional government bodies – Marshal's Offices.
The plan sets forth the transmission network development projects which, when completed, are expected to meet national power and energy demand. The main factors affecting the direction of its development include: growth of electricity demand, development of generating sources and the need to expand cross-border interconnections.
The draft PRSP 2018-2027 currently in the pipeline continues the transmission network development directions set out in PRSP 2016-2025. PSE’s strategic objective is to build a power backbone network based on 400 kV voltage, which will be capable of adapting the planned PPS development scenario, including in particular the development of the generating sector.
The domestic generating sector is undergoing transformation and a future energy mix for Poland has not been defined by the time this document is prepared. The current experience shows that under the existing legal and regulatory framework generating undertakings find it difficult to find an economic justification for the construction of new generating capacities. For this reason, in December 2017, the capacity market mechanism was introduced in Poland, which will enable investors to take decisions on the construction of new generating capacities in Poland. However, it must be emphasised that in 2016-2017 new combined cycle gas turbine (CCGT) units in Włocławek and Gorzów, as well as a coal-fire unit at Kozienice Power Plant, which improved the resources of the Polish generating sector by approx. 1700 MW.
Facts worth knowing
The implementation of planned development projects included in the plan for 2018-2027, together with the expected development of the generating sector will significantly change the network structure and power distribution in the PPS.
Compared with 2017, in 2027 we are planning:
- 220 kV line circuit length increase by 1,455 km (decommissioning 1,310 km, new builds 76 km);
- increase of transformation capacity between voltage levels:
- 400/220 kV - increase by 2,000 MVA);
- 400/110 kV - increase by 7,920 MVA (decommissioning 330 MVA, new builds 8.250 MVA);
- 220/110 kV - increase by 7,335 MVA (decommissioning 3,270 MVA, new builds 10,605 MVA);
- increase of reactive power regulation capacity.
Challenges to the development of the power system (e.g. RES, new technologies)
We expect that the operation of energy clusters, energy storage (both large-scale and at end users), as well as conscious community energy initiatives are the factors that will contribute to changes in the PPS operation management in the future.
What will be of major significance is a further development of the Smart Grid technology and smart metering, which will allow smart solutions to be implemented for DSM and DSR (Demand Side Management, Demand Side Response) application. In addition, e-mobility, with a special focus on vehicle charging considerations and the use of the Vehicle to Grid technology, will lead to a change in the PPS operating conditions.
Factors contributing to the development of the power system
The following factors significantly contribute to the development of the power system
Conditions arising from the KPZK
The National Spatial Development Concept (KPZK) is the foremost national strategic document on spatial development of the country. KPZK provides a framework for other strategic documents and plays a coordinating role with regard to proposed national and regional strategies, plans and programmes for social and economic development.
In practice, this means that KPZK binds public administration bodies and imposes the obligation to:
- take into account in the land use studies for communes the principles laid down in KPZK,
- take the KPZK provisions into account in the Voivodeship Spatial Development Plans (PZPW).
With regard to power infrastructure, the role of KPZK is to provide conditions to ensure energy security by enabling the diversification of sources, indicating directions and corridors in which transmission and distribution networks will be developed, as well as the potential locations of new generating capacity. KPZK identifies the space necessary for the development of transmission networks and the rules for the delimitation of space necessary for the utilization of the potential of regional and local renewables, including the diversification of energy sources. The guaranteed capability of future exploitation of strategic deposits was also taken into account. The directions of investment measures were indicated in KPZK without directly prejudging any locations, expenditure structure or financial inputs.
The KPZK currently in force signals the need to develop the national and cross-border power transmission network.
Conditions arising from the PZPW
From the point of view of the national transmission network expansion process, the voivodeship spatial development plans (PZPW) are the basic planning documents prepared by regional (voivodeship) governments. The PZPWs define, in particular, the infrastructural links, including the directions of cross-border links and the geographical distribution of public utility projects of supra-local significance. PSE’s cooperation with regional governments with regard to development plan consistency with the planning documents prepared by those governments, arises directly from the provisions of the Energy Law (EL). On this basis, our company consults the development plan with the interested parties, posting the draft plan on its website page and setting a deadline for the submission of comments. Regional government bodies participate in the consultations.
PSE also keeps correspondence with regional government bodies, participating this way in the Voivodeship Spatial Development Plan preparation procedure.
Since the time the last edition of the transmission network development plan was agreed, PSE has participated in giving opinions on the draft spatial development plans for 8 voivodeships: Kujawsko-Pomorskie, Lubuskie, Małopolskie, Mazowieckie, Podkarpackie, Podlaskie, Pomorskie and Wielkopolskie.
Conditions arising from Poland’s Energy Policy 2030
According to the requirement set forth in the Energy Law, the development plan for meeting the current and future electricity demand should take into account, among other things, Poland’s Energy Policy (PEP).
One of the main objectives set in PEP 2030 for the generation and transmission of electricity and heat is to “... ensure the continuous coverage of energy demand whilst taking into account the maximum possible utilisation of domestic resources and environmentally-friendly technologies.” .
This objective is to be achieved, among other things, through:
- building of new capacities in order to balance domestic demand for electricity and maintain surplus capacity from domestic conventional and nuclear generating sources;
- expansion of the national transmission network enabling the balanced economic growth of the country and its individual regions, and ensuring the reliability of electricity supply, as well as the take-up of electricity from areas with high saturation of planned and newly built generating units, with a special focus on wind farms,
- development of cross-border interconnections coordinated with the expansion of the national transmission network and the expansion of the neighbouring countries’ systems.
In the Draft PEP 2050, the main objective is to “... create conditions for the continuous and balanced development of the power sector, contributing to the development of the national economy, ensuring energy security of the state, and satisfying the energy needs of enterprises and households.”
The energy security objective is to be implemented through:
- ensuring the appropriate level of generating capacity;
- diversification of the energy generation structure;
- maintenance and development of transmission and distribution capacity;
- critical infrastructure protection.
The PRSP takes into account the objectives contained in Poland’s Energy Policy.
The main consideration for PRSP 2016-2015 arising from PEP 2030 and PEP 2050 is network expansion that allows:
- the development of renewable energy sources,
- maintenance and expansion of generating sources operating based on domestic resources of hard coal and lignite,
- commissioning of a nuclear power plant after 2027.
Considerations arising from the 10-Year Development Plan (ENTSO-E TYNDP) 2016
Every other year ENTSO-E publishes a Community-wide ten-year network development plan. The last edition of the Community-wide ten-year network development plan was published in December 2016. The main aim of the projects covered by the TYNDP is to achieve European energy objectives, such as security of supply, balanced development of the power system, and creating conditions for an efficient European electricity market. The development needs in the European power system, identified in the course of analyses conducted in the TYNDP creation process arise, among other things, from a dynamic development of renewable (mainly wind) energy sources, the need to reduce CO2 emissions, and elimination of energy islands.
TYNDP 2016 provides for five clusters of projects concerning the development of the national transmission network and cross-border interconnections.
PRSP 2018-2027 includes all investment projects within the territory of Poland provided for in TYNDP 2016 during the period ending in 2027.
Considerations arising from the implementation of connection agreements and defined conditions for connection to the transmission network
As at 15 April 2017, PSE had connection agreements signed for new generating units with a total capacity of 16098.175 MW, including the connection of 10,785 MW conventional units and 5,313.175 MW RES. PSE also signed one agreement with electricity consumers for total power of 30 MW, and three agreements for total power of 220 MW are under negotiation.
Considerations arising from the fulfilment of other commitments, including arrangements with DSOs
The national transmission network (at 400 and 220 kV) together with a large part of the 110 kV distribution network operates in the multiple-feed closed network configuration. One of the key aspects in planning the development of transmission infrastructure both at the EHV network level and the 110 kV network level is to ensure the cohesive and coordinated development of the entire closed network. This approach makes it possible to ensure long-term operational security of the PPS and optimal, in technical and economic terms, dimensioning of needs for network expansion in different areas. This issue is provided for in the applicable laws and regulations, including the Energy Law (Article 9c (2) (5)) and the Transmission Grid Code (Conditions for the network use, operation, maintenance and development planning - Section 3).
Integrated planning requires multi-variant analyses of an iterative nature for the entire closed network, taking into account changing system conditions. During the period preceding the preparation of the draft PRSP 2018-2027, the system analyses listed below were commissioned in agreement between PSE and individual OSDs, concerning the future operating conditions of the meshed network in different PPS areas.
Development of e-mobility
The E-Mobility Development Plan adopted by the Council of Ministers on 16 March 2017 sets the target of 1 million electric vehicles in Poland by 2025. The achievement of this target will involve additional demand for electric power and energy, and the need to create appropriate conditions for the development of e-mobility. The development of e-mobility is also an opportunity for the development of energy storage systems.
PSE conducts and plans activities including analyses of expected electric power and energy requirements, generated by the developing e-mobility sector in Poland. The activities presented fall in line with long-term forecasting which us aimed at the dimensioning of the needs of the Polish Power System both in terms adequacy of generating sources and network requirements, in particular extra-high voltage.
The following are analysed as part of those activities:
- technical assumptions concerning the development of e-mobility technologies,
- the PPS operation conditions related to the charging of electric vehicles.
The driving factors behind the development rate of the e-mobility market will also be defined, as well as possible scenarios for the development of the market in Poland.
The aim of the analytical activities is to estimate the options for increasing the number of electric vehicles used in Poland in private and public transport and determining their impact on the power and energy balance. In the next step, the issue will be subject to a detailed analysis of network aspects. A great emphasis will be put on examining the impact of the development of electromobility on the operational security of the power network.
PSE also intends to identify possible mechanisms, the implementation of which could enable the management of increased demand for power and energy. The main purpose of these mechanisms will be to stimulate the processes of charging vehicles in such a way that, while maximizing functionality for electric car users, an optimal pattern of the demand curve for power generated by electric vehicles is ensured.
Involvement in international organisations
The beginnings of PSE’s cooperation with ENTSO-E date back to 2008, when ENTSO-E incorporated pre-existing organisations such as: ETSO (European Transmission System Operators), UCTE (Union for the Coordination of the Transmission of Electricity) and regional TSO associations: the Nordic countries, the Baltic countries, the United Kingdom and Ireland. As a member of the European Network of Transmission System Operators for Electricity (ENTSO-E) , PSE is one of the 43 electricity transmission system operators (TSOs) from 36 countries in Europe, members of the organisation. Adopting a common position, ENTSO-E is the only organisation to represent the operators in relations with stakeholders, including institutions and bodies of the European Union and the Agency for the Cooperation of Energy Regulators (ACER).
Fig. 5. Member States associated in ENTSO-E
ENTSO-E operates under Regulation (EC) No 714/2009 of the European Parliament and of the Council of 13 July 2009. The objective of the organisation is to promote reliable operation, optimal management and sustainable development of the pan-European electric power transmission system to ensure the security of supply and satisfy the needs of the internal electricity market.
ENTSO-E is governed by the General Meeting of Members, and the activities of the organisation are managed by the Board. The working structure of ENTSO-E consists of the committees: Market Committee, System Development Committee, System Operation Committee, Research, Development & Innovation Committee, Digital Committee, and Legal and Regulatory Group acting on a committee basis.
The committees are composed of working groups implementing tasks of a pan-European nature and regional groups responsible mainly for tasks specific to individual regions, including the operation of interconnected power systems. ENTSO-E also fulfils a number of obligations resulting from the third legislative package: it develops network codes, approves a 10-year plan for the development of a pan-European power network together with the European generation adequacy forecast, and implements recommendations on the coordination of technical cooperation between EU operators and operators from third countries.
Poland belongs to three capacity calculation regions (CCRs): CORE, Baltic and Hansa, which were established in November 2016 by ACER's decision within bidding zones on the proposal of all TSOs. In the working structures of the above-mentioned regions, representatives of the individual TSOs carry on work aimed to implement market mechanisms whose design will ensure the capability for efficient, unconstrained and secure cross-border commercial exchange. These activities cover all market sectors, from long-term markets, to the day-ahead market in the form of the market coupling mechanism, to the intra-day market. The activities mentioned above concern, among other things, the implementation of a coordinated process of capacity calculation, including the allocation of costs of remedial actions used in the process and implementation of the Market Coupling mechanism on the PPS interconnections. PSE's representatives also work in regional structures.
We actively cooperate with other European operators under the TSO Security Cooperation (TSC)initiative. The members of the TSC are 13 operators. In addition, on 1 September 2014, the dedicated company TSCNET was established which support operators by performing tasks involved in day-ahead and intra-day operational planning, mid-term coordination of integration of network elements, and coordination of remedial actions between operators. These tasks fall within the remit of the Regional Security Coordination Initiatives (RSCIs), i.e. regional coordination and supervision centres.
The TSC initiative includes measures aimed to optimise the use of remedial actions during operational planning at the regional level, introduce a system of early warning against critical situations in the system and implement five required services provided by TSCNET (as RSC) to operators in the TSC region.
The key issues concerning the TSC initiative, including the strategy and directions of development, are decided upon by the RSC Cooperation Board whose Vice-Chairman is the President of the Management Board of PSE. Technical operational matters are the responsibility of the TSC Operational Board, of which an adviser to the Management Board of PSE is a representative. More than a dozen representatives of our company have also been appointed to working bodies of TSC.
PSE is also an active participant of the Central Eastern European Forum for Electricity Market Integration – CEE Forum, the objective of which is to provide political support in the electricity market integration process, CIGRE (promoting innovations and new solutions in the power sector through cooperation between business and academic communities), as well as Central Europe Energy Partners (CEEP) – an international non-profit association representing the Central European energy sector, whose objective is to support the integration of the Central European energy sector through the EU common energy and security policy in the area.
International cooperation includes not only work within ENTSO-E, TSC, CCR and other organisations, but also cooperation in other structures, such as XBID Accession Stream, Local Implementation Project, Multi-Regional Coupling (MRC), and international projects under which the provisions of the network code on electricity balancing (electricity balancing guideline, EB GL) are being implemented.