Schedule for Integration of the Polish Balancing Market with European balancing platforms. 

Polish Balancing Market reforms.

The scheduled integration of the Polish balancing market with European balancing markets is as follows:

Polish Plan for the Implementation of Balancing Market Reforms was divided into two stages:

Stage I - 2021
The goal of this stage is to the greatest extent possible meet all relevant legal and regulatory requirements, taking into account current external constraints, including but not limited to:

• Enabling active participation of the demand side (DSR) in the balancing market; 
• Allowing non centrally dispached generation units to actively participate in the balancing market (so-called units of nCDGUs); 
• Enabling active participation of energy storage in the balancing market; 
• Enabling to update offers placed in Integrated Planning Process to the maximum extent possible untill the cross-zonal intraday market gate gets closed, with the assumption of monitoring market participants for potential abuses on market (use of dominant marekt position); 
• Termination of the following services: 

• Intervention Cold Reserve - IRZ; 
• Operational Power Reserve - ORM; 
• Guaranteed DSR Intervention Program;
• Guaranteed IP DSR; 
• Intervention Work - PI; 

• Change of balancing market sign nomenclature, adapting the Polish sign nomenclature to the requirements of the regulation 2017/2195 (EBGL);
• Change to pricing of imbalances and settlements to improve incentives to be balanced by limiting the possibility of arbitrage between the wholesale energy market and the balancing market; 
• Improvement of the principles of valuation and settlement in case of curtailment (redispatching).

Stage II - 2022
The goal of this stage is to fulfill all remaining legal and regulatory requirements, introduction of changes to support enforcement of these requirements and improving the efficiency of the balancing market mechanism, according to requirements set in the balancing market reforms plan, including, inter alia:

• Implementation of the capacity shortage pricing mechanism to provide incentives for short-term flexibility and providing appropriate pricing signals for balancing energy providers; 
• Implementation of the procurement of balancing capacity separately for up and down regulation, as required by the regulation 2019/943 and EBGL; 
• Implementation of changes to balancing market policies and processes to facilitate implementation of European platforms for balancing;
• Implementation of updated rules for planning and billing for balancing service providers to increase effectiveness of the new rules of the balancing market.

Eventually, the implementation of the reforms of the Balancing Market will enable the following balancing capacity services:

The Polish balancing market is based on a central dispatch model, that means TSO is responsible for selection and dispatch of centrally dispached generation units (CDGUs). As prescribed in the Polish Implementation Plan of May 14, 2020 (pages 14 - 16) the TSO dispaches generaiton units in a manner to ensure balance between generation and demand, taking into account limitations of generation units, transmission lines and reserve requirements. This is performed using a selection optimization algorithm (called Integrated Scheduling Process), that ensures grid stability and economy.

It is implemented in the Integrated Scheduling Process as an optimization process selection of generating units and economic distribution of loads z taking into account the system operation security criteria. TSO's allocation constrains are related to the fact that the responsibility of the Polish TSO for the equilibrium in the system is extended for two market planning horizons: current day and next day market. Therefore, TSO is responsible for the job which in self-dispatch market model is transferred to the entities responsible for balancing. Therefore, PSE must ensure an appropriate level of reserves for the whole Polish power system.

Polish TSO applies allocation limits to ensure operational security of the Polish power system considering the required generating power for up or down regulation of power and residual demand (residual demand is part of end-user needs not covered by commercial agreements, i.e. production graphics resulting from commercial contracts). The reforms of the balancing market that are currently taking place in Poland include implementation of a new mechanism for securing the required level of reserves, i.e. implementing a separate purchase process balancing reserves before opening the gate under the mechanism single day-ahead coupling (SDAC) - measure proposed by ACER in the CORE CCM Methodology (Decision 02/2019 of the Agency for the Cooperation of of the Energy Regulation of February 21, 2019 on the proposal of the TSO region Core for the regional shape of common capacity calculation methodologies for the day-ahead and intraday markets, pages 20-22) as one of the possible solutions to reduce the level of restrictions applied to allocation.  

The implementation of the new mechanism for securing of balancing reserves, according to the plan dated May 14, 2020, shall reduce the role the allocation limits play on the market performance. It is expected, that:

• market forces will provide sufficient incentive for market participants in Poland to be fully balanced;
• allocation limits will act as the measure of last resort to ensure the secure operation of the Polish system and will only become active if market forces fail to provide appropriate signals; 
• market price signals will get strengthened in such a way that only an emergency situation of serious problems with power adequacy in the region may lead to seeing the effect allocation limits (these constraints will be introduced in the market coupling algorithm, but it will not affect the market outcome unless the market fails to deliver adequate availability of generation sources and generation reserves in Poland).

Entity structure of the balancing market is to be changed as follows:

Balancing Market Participant is allowed to be both Entity Responsable for Balancing and Provider of Balancing Services, but in all cases has to meet the legal and technical requirements of the participation in Balancing Market. The owner of the instalations connected to the transmission network does not have to be Balancing Market Participant. Distinction of generators, consumers, trade has been abandoned for Balancing Market Participants however distinction for TSO (Polish: Operator Systemu Przesyłowego Elektroenergetycznego - URBBIL), DSO (Polish: Operator Systemu Dystrybucyjnego Elektroenergetycznego - URBOSD), Energy Exchanges (Polish: Giełdy Energii - URBGE) is to be conserved.

Objects structure of the balancing market is to be changed as follows:

Four types of generation modules are to be introduced:

1) Aggregated minimal power has be at least 1 MW net;
1a) aggregation can be made only on medium voltage within 110 kV node;
1b) aggregation is possible on the territory of the entire country (limited to zone, in case of zoning);
2) TSO can grant exemption from the requirement;
3) TSO can agree to aggregate; 

Amendments to the Balancing Conditions 1/2020 have introduced two types of activity on the balancing market (RB) identified by the Activity Marker (Polish: Znacznik Aktywności - ZAK):

• ZAK=1 - The Scheduling Unit participates actively in the Balancing Market and is subject to dispatch by the TSO in terms of changes of power/load and changes of the state of work within the full range of the dispatchable power of the Scheduling Unit, as per commercial and technical data reported for the Scheduling Unit; 
• ZAK=2 - The Schedule Unit participates actively in the Balancing Market and is subject to dsipatch by the TSO in terms of changes of power/load within the range of the offered dispatchable power of the Scheduling Unit, as per commercial and technical data reported for the Scheduling Unit.

1) True for the periods when ZWP Marker was provided. Marker ZWP=1 means there is no possibility to reduce power of a Schedulling Unit in the process of balancing due to technical characteristics of this Scheduling Unit (metering, security, technological processes, supply of heat to a city, etc);
2) Allowed in justified cases, subject to consent from TSO;
3) Tests are being performed regarding possibility of participation by a single Load Scheduling Unit in balancing for Marker ZAK=1.

Exchange of information necessary for system balancing and management of system limitations is implemented through the IT system of the TSO, which consists of:

• System for Exchange of Energy Market Information (Polish: Wymiana Informacji o Rynku Energii - WIRE); 
• System for Operational Cooperation with Powerplants (Polish: System Operatywnej Współpracy z Elektrowniami - SOWE);
• Portal for Scheduling Data Exchange (Polish: Portal Wymiany Danych Planistycznych - PWDP).

Balancing Market reforms require changes in the scope of control and regulation of generating units, such as:

• □
  Changes to Current Point of Work (Polish: Bieżący Punkt Pracy - BPP):  

• BPP as a snapshot value for the end of a 5 minute planning interval; 
• linear transition function; 
• change of planning interval - replacement of 15 minute planning interval by 5 minute; 
• change of the advance notice for work plans from 15 minutes to 2.5 minutes.

• □
  Changes to primary reserve regulation:

• establishing upward and downward primary regulation as separate service;
• replacing of fixed primary regulation ranges in daily planning by regulation that can be set for a range form 3% to 5%.

• □
  Changes to secondary reserve regulation;

• establishing upward and downward secondary regulation as separate service;
• replacing of fixed primary regulation ranges in daily and current planning by regulation that can be set for a range form 3% to 5%.

• □
  Changes of LFC Regulator to comply with the Balancing Market reforms requirements. Critical elements to be introduced into generators IT systems are:

• 2.5 minutes notfication advance; 
• BPP as a snapshot value for the end of a 5 minute planning interval;
• enabling net power request setting.

Year 2023 
Regulation of the Minister of Climate and Environment of March 22, 2023 on detailed conditions for the operation of the power system, implementing the instructions of Commission Regulation (EU) 2017/2195 of November 23, 217 establishing guidelines for balancing (Official Journal EU L 312 of 28.11 2017, p. 6, Official Journal of the EU L 62 of 23.02.2021, p. 24 and Official Journal of the EU L 147 of 30.05.2022, p. 27) defines the scope, conditions and manner of balancing the power system and establishing charging system for costs of imbalances.

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