Polish Energy Market
Jarek Astramowicz
10 March 2003
Polish Power Sector - Overview

Generation
 total installed capacity - 34 200 MW
 peak demand – 23,000 MW, minimum demand - 15,000 MW
 annual demestic production – 155 TWh
 annual domestic consumption – 137 TWh
 net power exports – 7 TWh
 96% of the total power output is generated by the coal fired plants and
CHPs (hard coal and lignite)

Transmission
 Polish Power Grid Company (PSE SA) - owns, operates and maintains
the high voltage grid (220 kV, 400 kV and 750 kV)

Distribution
 33 local distribution companies
 they own and operate the medium- and low-voltage transmission and
distribution grids (110 kV and below)
Regulation

Energy law of 10 April 1997 (last amendments
introduced on 1 January 2003)

The President of Energy Regulatory Authority
(URE)
issuing licences
approval and control of energy tariffs
control of customer service quality standards
Polish Power Grid
500kV submerged line
to Sweden,
under construction
Żarnowiec P.S.
Russia
Planned line
to Lithuania
Lithuania
Baltic Sea
Żydowo P.S.
Gdańsk
Olsztyn
Dolna Odra
Bydgoszcz
2 x 410 MW
Ostrołęka
230 MW
Szczecin
Włocławek
Płock
Poznań
Belarus
Warszawa
Germany
Pątnów
Dychów P.S.
Siekierki
Konin
Adamów
Bełchatów
Kozienice
2 x 310 MW
Wrocław
1400 MW
Turów
Opole
Połaniec
Stalowa Wola
Łagisza
750 kV Power Transmission Lines
2 x 110 kV
Łaziska KatowiceSiersza
Total Length: 114 km
Kraków
110 kV
400 kV Power Transmission Lines
Kraków Łęg
Rybnik
Total Length: 4 677 km
Skawina
Czech
Republic
220 kV Power Transmission Lines
Jaworzno III
2 x 875 MW
Total Length: 8 127 km
Porąbka-Żar P.S.
Rożnów
110 kV Cross-border Power Transmission Lines
2 x 290 MW
Thermal Power Plants over 1000 MW
Thermal Power Plants from 250 to 1000 MW
Hydro Power Plants
Slovakia
Cities
CHP Nowa Sarzyna340 MW
Rzeszów
1,300 MW
Solina
Ukraine
2,000 MW
Privatisation.
Distribution company groupings
ZE Słupsk
ZE Koszalin
ENERGA
Gdańska
Kompania Elbląskie ZE
Energetyczna
ZE Szczecin
ZE Olsztyn
ZE Białystok
ZE Bydgoszcz
ZE Toruń





Enea
G-8
L-4
K-4
Other
ZE Płock
ZE Gorzów
Energetyka
Poznańska
Zielonogórskie
ZE
STOEN
(Warszawa)
Energetyka
Kaliska
ZE Legnica
ZE
Łódź
ZE Łódź Teren
ZE Lublin
LUBZEL
ZE Wrocław
ZE Jelenia Góra
ZE Częstochowa
ZE Wałbrzych
ZE Warszawa
Teren
ZEORK
SkarżyskoKamienna
Zamojska
Korporacja
Energetyczna
ZE Opole
Będziński
ZE
Górnośląski
ZE
Beskidzka
Energetyka
Rzeszowski ZE
ZE Tarnów
ZE Kraków
Balancing Market
effective introduction in September 2001 and its
continuous functioning and improvement
by its effective introduction Poland has removed the last
remaining structural obstacle in creating a competitive
wholesale electricity market
current high volumes will get lower as the other market
segments (PX, OTC) develop and when pricing
mechanism gets adjusted
Balancing Market till 30th June 2002
loss
Contract price
CRO
250
200
price
150
100
50
profit
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
day
undercontracted
450
Contract volume
Real demand
overcontracted
400
overcontracted
volume
350
300
250
200
150
100
50
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Balancing Market from 1st July 2002
250
200
Contract price
CROs
CROz
CRO
price
150
100
50
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
day
undercontracted
450
Contract volume
Real demand
overcontracted
400
overcontracted
volume
350
300
250
200
150
100
50
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
9/
3/
20
01
9/
17
/2
00
1
10
/1
/2
00
1
10
/1
5/
20
01
10
/2
9/
20
01
11
/1
2/
20
01
11
/2
6/
20
01
12
/1
0/
20
01
12
/2
4/
20
01
1/
7/
20
02
1/
21
/2
00
2
2/
4/
20
02
2/
18
/2
00
2
3/
4/
20
02
3/
18
/2
00
2
4/
1/
20
02
4/
15
/2
00
2
4/
29
/2
00
2
5/
13
/2
00
2
5/
27
/2
00
2
6/
10
/2
00
2
6/
24
/2
00
2
price (PLN/MWh)
Balancing Market prices from
1st September 2001 till 30th June 2002
300
250
200
150
100
50
0
date
CRO min
CRO max
CRO ave
Power Exchange
over-invested in systems and structure
high transaction costs
faulty PX participation agreements (all risks shifted onto
participants)
attempts sophisticated products without first fully
developing & mastering the basics
major failure - it has not created a reliable index
20
02
-0
20 6-1
02
7
-0
20 6-1
02
8
-0
20 6-1
02
9
20 062
02
0
-0
20 6-2
02
1
-0
20 6-2
02
2
-0
20 6-2
02
3
-0
20 6-2
02
4
-0
20 6-2
02
5
-0
20 6-2
02
6
-0
20 6-2
02
7
20 0602 28
-0
20 6-2
02
9
-0
20 6-3
02
0
-0
20 7-0
02
1
-0
20 7-0
02
2
-0
20 7-0
02
3
-0
20 7-0
02
4
20 0702 05
-0
20 7-0
02
6
-0
20 7-0
02
7
-0
20 7-0
02
8
-0
20 7-0
02
9
-0
20 7-1
02
0
-0
20 7-1
02
1
-0
20 7-1
02
2
20 0702 13
-0
20 7-1
02
4
-0
20 7-1
02
5
-0
20 7-1
02
6
-0
717
Wolumen (MWh)
1
data
18000
16000
14000
12000
10000
8000
6000
4000
2000
0
408
397
386
375
364
353
342
331
320
309
298
287
276
265
254
243
232
221
210
199
188
177
166
155
144
133
122
111
100
89
78
67
56
45
34
23
12
price (PLN/MWh)
Balancing Market prices from 1st July 2002 till 17th July 2002
CROs
CROz
CRO
800,00
700,00
600,00
500,00
400,00
300,00
200,00
100,00
0,00
Balancing Market and Power Exchange volume from 17th June till 17th
Wolumen GE
July 2002
20000
Wolumen RB
OTC Market
relatively high volumes available for trading
large number of „active” participants both current &
potential
objective price index can be created
most of the action will take place in the near future
„Long-term contracts”
they cover only 60% of the market with 30% or more
available for trading (10% - is the forced generation)
30% of the Polish wholesale market exeeds 35 TWh of
electricity worth almost USD $1 bln
„lets learn how to trade the 35 TWh before we attempt to
trade the remaining 70 TWh”
Company
 JAC EnTra was established in August 1998 (originally as
Enron Poland) and changed its name in February 2002 as a
result of an MBO
 Since MBO additional investors were attracted, resulting in
equity capital increase up to a total of almost 17 mln pln
 10 year power trading license received in April 1999
 10 years domestic gas trading license received in March
2001 and gas import license received in May 2001
Commercial achievements to date

Commercial efforts for 2002/2003
 Over 1 TWh of electricity for sale contracted for 2003
 Three EFET type Master Trading Agreements signed
 Several EFET Masters under active negotiations
 5 year, 50 MW„call” option concluded (valid through September 2005) with the
largest Polish power generation group
 2003 physical forward power deliveries for 340 000 MWh confirmed with
confirmations to be signed next week

Brokerage deals concluded and/or delivered on to date
 August, September and October 2002 – total deliveries of 150,000 MWh
 6 month call option for power import through SwePol link cable concluded with
PSE SA
 0,3 TWh of power exports concluded during 1999–2000

Launching electricity trading through its newly
established Kantor Energii
 The first trading session took place on 29 January 2003
What is Kantor Energii ?
 Day ahead and two days ahead, real time, hourly electric
energy continuous trading program
 Internet connection allows for fast and safe (SSL protocole)
„click’n trade” activity
 All transactions are concluded with JAC EnTra at the fixed,
listed prices for the same transaction unit (number of MW in
one hour)
 Our bids and offers are continously changed („active market
making”) reflecting real-time demand and supply changes
Kantor Energii
at the Polish power market
Power Exchange
OTC market
Demand
Balancing Market
Supply
KANTOR
ENERGII
Trade sessions
Morning session – day ahead contracts concluded
Afternoon session – two days ahead contracts
concluded
Confirmations of the concluded contracts –
after each session
7:15
08:45
09:00
12:00
13:00
13:15
Transaction example for one hour
BM sells
250 PLN/MWh
BM buys
50 PLN/MWh
KE sells
KE buys
KE profit/loss
250
0
230250
80
170
230
100 90 80
150150280440410560
Thank you for your attention