Business strategy
PSE’s strategy is a response to the challenges facing the company, resulting from a rapidly changing environment of PSE, including mainly changes of a technological and regulatory nature, as well as building a common Internal Energy Market.

Regulations have set a new framework for the activities of transmission system operators. Technologies, in particular the digitalisation of the power sector and changing consumer behaviour, will influence the operators’ current and shape new areas of activity.

Implementation of strategic objectives

Many actions testify to the success of the process. We are monitoring on a current basis the implementation of strategic initiatives and regularly report them, which allows the company to maintain its line for action and business values at the highest level.
Strategic objectives are cascaded to the executive staff, and then to managers and their teams. This is conducive to strengthening the sense of participation and has a real impact on the effective implementation of the PSE strategy.
The degree of achievement of strategic objectives is communicated in all internal structures of the company, which translates into a greater sense of responsibility for strategy implementation among employees.

Key initiatives executed under the strategy


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PSE CG Cybersecurity Programme

In 2017, we developed and have since been implementing the ICT (Information and Communications Technology) Strategy of the PSE Capital Group.The strategy highlights the unavoidable and mutual dependence of cybersecurity of our company, its market partners at home and abroad, and entities of the Capital Group, and subcontractors. It also describes the overall impact of cybersecurity on the PPS
operational stability. The first pillar of the strategy is ICT security – business continuity as availability and resilience of systems as well as data integrity and confidentiality in IT solutions.
The ICT strategy defines the following areas as priorities:
  • Network Segmentation – in this area, projects are implemented which are aimed to ensure adequate separation of resources with different sensitivity levels; both through actions at infrastructure level and through appropriate design of business projects.
  • Workstation – covers projects providing secure work tools, allowing performance and functionality to be maintained according to business needs, while ensuring protection from malicious software, and rights and data flow control.
  • Internet Interface – our outer perimeter providing – taking into account guidelines resulting from the rules of separation and management of rights – functional and unified access to the Internet (including through a secure Wo-Fi network deployed in 2017 at the company’s head office in Konstancin-Jeziorna) for employees and our guests, and secure remote access adequate to needs.
  • Detection and response – in order to ensure current ICT security, the dedicated Security Operations Centre (SOC) team performs the monitoring of threats on a 24-hour basis. In the case of incidents involving IT or OT networks, it takes relevant actions and remedial measures. The Computer Emergency Response Team (CERT) forms another line of support. CERT was set up in 2016, and in 2017 it became an accredited member of the Trusted Introducer organisation. It is engaged in enhancing employees’ awareness through the publication of threat alerts and warnings, publication of ICT security bulletins and reporting information on incidents, as well as cooperation with external entities in incident handling coordination and exchange of information on threats with external entities (e.g. CERT NASK, Government Security Centre, cert.gov.pl).
Cooperation as a key to cybersecurity
In 2018, we organised, for the first time, the PolEx conference, modelled on the American GridEx. It is a series of workshops intended for cybersecurity experts in the energy sector. PolEx was the first such major training event for the whole sector in Poland, providing an opportunity for the exchange of experience and best practices in OT and IT systems protection.
As a continuation of PolEx, the Cybersecurity Conference for Energy Sector was held by PSE in June 2019 in Krakow. During the debates, presentations and interactive training sessions, the latest power sector cybersecurity solutions were presented and cooperation of the entire sector was discussed. Our cyclic training events and conferences are aimed to build mutual trust among companies and institutions, and create the “cybersecurity culture” across the industry.
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Conducting anti-terrorist security training events and exercises

PSE actively participates in anti-terrorist training events and exercises organised by public administration, the academic community and international institutions. In 2018, we conducted and participated in 30 editions of training, which included:
  • “Personal security in the face of contemporary challenges and threats” and “Evacuation of personnel in the event of terrorist threat”. 800 persons participated in the training events.
  • “Parcels with Hazardous Material – Recognition of Threats and Rules of Procedure” conducted by the Central Investigation Bureau of Police and Rescue and Fire Unit No 6 in Warsaw
  • 1st Polish Workshop “Management of Security – including Anti-terrorist Security – in Buildings of Key Significance for National Security”.
  • Anti-terrorist exercises in dealing with potentially hazardous parcels. The exercises were performed with the participation of Rescue and Fire Unit No 6 in Warsaw with specialist equipment.
  • Anti-terrorist training “Behaviour in Hostage Situations – Good Practices and Recommendations”.
  • “Physical Combating of Terrorism, Forced Resolution of a Hostage Situation” – anti-terrorist training combined with presentation of specialist weapons and equipment of anti-terrorist squads.
  • “KDM Survival” – training and exercises in evacuation, sealing procedures and anti-terrorist issues. The training, which dealt with issues such as how to live in confinement and how to manage food rations and water, was intended for the personnel of the National Dispatch Centre (KDM).
In November 2018, PSE co-hosted the 2nd Polish Scientific Conference – the 1st Polish Congress “Anti-terrorist Security of Public Utility Buildings. Threats and Recommendations”. Participants of the company participated in discussions during expert panels and workshops.
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Management of the regulatory risk arising from provisions of the “Clean Energy for All Europeans” package

On 30 November 2016, the European Commission published the “Clean Energy for All Europeans” package which included legislative proposals, concerning the electricity sector, including the activities of transmission system operators. Representatives of PSE actively participated in work concerning the package, in particular with regard to areas directly related to the activities of transmission system operators, closely cooperating with the national administration. PSE’s position was presented on ENTSO-E forum, at conferences, and during other events dedicated to the package, as well as in Polish and European media.
In 2018, following the elaboration of positions on all legislative proposals of the package by the EP and the EU Council, the trilogue procedure was conducted between the a/m institutions, with the participation of the EC . The purpose of the trilogue was to arrive at a compromise and agree the final version of legislation. The procedure ended in December 2018 with reaching an agreement on the last two legislative proposals comprising the package, i.e. the proposal for a resolution on the internal market for electricity and a directive concerning the common rules of the internal market in electricity. The trilogue process was also completed for the proposal for a regulation on risk-preparedness in the electricity sector and the proposal for a regulation establishing the Agency for the Cooperation of Energy Regulators. All the above legislation was published in the EU Official Journal and entered into force on 4 July 2019.

Participation in the SIDC international project leading to the implementation of single intraday coupling at EU level

Commission Regulation (EU) 2015/1222 of 24 July 2015 establishing a guideline on capacity allocation and congestion management (“ CACM Regulation”) introduced the obligation to implement a pan-European solution for single intraday coupling. In February 2017, the European regulatory bodies, approving the MCO Plan (Market Coupling Operation Plan), declared the SIDC (Single IntraDay Coupling) solution implemented with the use of the (Cross-Border Intraday) platform to be the target solution for the European Intraday Market.
SIDC was launched on 12 June 2018, coupling 14 bidding zones through the European single intraday market coupling mechanism (the so-called first wave of SIDIC covering Austria, Belgium, Denmark, Estonia, Finland, France, Germany, Latvia, Lithuania, Norway, the Netherlands, Portugal, Spain and Sweden). The operational launch of SIDIC in a further seven bidding zones (second SIDIC wave covering Bulgaria, the Czech Republic, Croatia, Poland, Hungary and Slovenia) took place on 19 November 2019. Preparations for the implementation of SIDC in Poland took two years of intensive work with the involvement of PSE, nominated electricity market operators (NEMOs) authorised to operate in Poland, and the Energy Regulatory Office. In parallel with SIDC, solutions were launched to enable multiple NEMOs to operate in the Polish bidding zone. As at the SIDC launch date, access to 21 countries covered by the mechanism was provided by Towarowa Giełda Energii SA.
For PSE, Poland’s joining the SIDC was a challenge that required, among other things, thorough conversion or replacement of some of the IT systems used for the management of market processes. The project was given top priority and management of the process, from the operational launch of the mechanism, is ensured on a 24 hour basis by the National Dispatch Centre dispatch services.
The SIDC mechanism is based on continuous trading and implicit allocation. Market participants perform electricity purchase and sales transactions until 1 hour before the period of its physical delivery, using both bids available in the country and outside the Polish system.The ability to adjust a trading position at a short notice is of particular importance for entities managing portfolios characterised by high variation of demand and generation, e.g. RES. The use of cross-border bids is possible owing to interconnection capacity made available by TSOs, the allocation of which for trading purposes is performed in the background of transactions concluded.
The SIDC launch opens up new opportunities for national market participants. The mechanism provides access to energy bids and offers from outside the country, which will translate into increased liquidity of the national intraday market. From the point of view of energy security, providing access to intraday allocation will ensure better utilisation of cross-border interconnections, in particular when new transmission capabilities emerge after the closure of the day-ahead market or operating conditions of power systems change in respective countries.
Fig. Bidding zones covered and planned to be covered by the SIDC mechanism
In the next step of its development, the European Intraday Market is to be expanded by adding single-price auctions taking place several times a day. Such auctions will allow reference prices to be calculated, providing a basis for the calculation of (congestion rent) for individual borders.
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Supporting the government administration in the notification of the Polish capacity market mechanism to the European Commission

The capacity market mechanism – due to the type of payment – was subject to notification to the European Commission. PSE demonstrated irregularities in the current operation of the electricity market and – based on a detailed probabilistic assessment – confirmed that Poland could expect reaching critical levels of generation adequacy. The European Commission took those arguments into account and on 7 February 2018 issued a decision approving the Polish capacity market mechanism.
The Capacity Market Act
The capacity market in Poland was established by the Act (hereinafter: CM Act) of 8 December 2017, which entered into force on 18 January 2018. PSE, acting as operator within the meaning of the Act, is responsible for the management of capacity market processes. Within the framework of those processes, the general certification, certification for main auctions and main auctions were performed for delivery periods falling in the years 2021, 2022 and 2023.
PSE manages capacity market processes with the use of the capacity market register (register) referred to in Article 55 of the CM Act. In 2018, PSE established the register for functionalities supporting general certification and certification for the main auction, and established a dedicated ICT system supporting main auctions.
Performing the first capacity market processes, including main auctions for the delivery years 2021–2023
General certification
PSE performed the first general certification of the capacity market between 3 April and 29 May 2018. Under general certification, the applications submitted 1,196 applications for entry in the register. P1,167 units were successfully verified and entered in the register, including 1,004 physical generating units and 163 demand side response units.
Participation in general certification is obligatory for all existing physical generating units with a gross maximum capacity of not less than 2 MW, and the fulfilment of this obligation is monitored by the President of ERO . A physical unit that has successfully completed the certification process is entered in the register. The participation of planned physical generating units, demand side response physical units and planned demand side response units is not obligatory, but it is prerequisite for subsequent participation in main certifications.
Tab. Number and net maximum capacity of units entered in the register as a result of general certification in 2018.
  Number of units entered in the register Total net maximum capacity of units entered in the register
(in MW)
Existing generating physical units 885 36,327.659
Planned generating physical units 119 8,898.206
Demand side response physical units 110 844.994
Planned demand side response units 53 1,040.500
Total 1,167 47,111.359
Certification for main auctions
PSE performed certification for ain auctions for 2021, 2022 and 2023 by 5 September and 31 October 2018.
In the main certification process for the delivery periods:
  • 2021 – capacity providers submitted 229 applications for certification, of which 193 concerned generating capacity market units and 36 concerned demand side response capacity market units,
  • 2022 – capacity providers submitted 228 applications for certification, of which 189 concerned generating capacity market units and 39 concerned demand side response capacity market units,
  • 2023 – capacity providers submitted 228 applications for certification, of which 186 concerned generating capacity market units and 42 concerned demand side response capacity market units.
As a result of the certification, our company issued certificates authorising capacity market units to participate in capacity auctions or the secondary market.
Tab. Number of established capacity market units certified for the respective delivery years
  Number of established capacity market units
Delivery year 2021 2022 2023
Existing generating capacity market units 101 158 152
Refurbishing generating capacity market units 76 16 17
New generating capacity market units 16 15 17
Demand side response capacity market units 36 39 42
Total 229 228 228
On 8 November 2018, a test auction was carried out, preceded by test general certification and test main certification. Its purpose was to acquaint the users with the operation and available functionalities of the dedicated ICT system which is used for the management of capacity auctions.
Main auctions

In 2018, PSE performed three main auctions for the delivery periods:
  • on 15 November for 2021,
  • on 5 December for 2022,
  • on 21 December for 2023.
A capacity market auction is performed in the form of Dutch auction, with a uniform clearing price for all capacity market units that have won the auction. It consists of a defined number of rounds during which the participants must submit an exit bid. Non-submission of an exit bid declaration is treated as acceptance of the starting price for the next round. The capacity market units that have won a given auction conclude capacity agreements. The term of the capacity agreement depends on the type of capacity market unit and the duration of the capacity obligation offered by it. Existing generating capacity market units may offer a capacity obligation for only one delivery period., Refurbishing generating capacity market units and demand side response capacity market units that will demonstrate having achieved the capital expenditure levels specified in the regulation may offer the capacity obligation for not more than 5 delivery periods. New generating capacity market units, having demonstrated the achievement of the unit capital expenditure levels specified in the regulation may offer the capacity obligation for not more than 15 delivery years. In addition, the term of the capacity agreement may be extended by an additional two years for low-emission generating capacity market units (“green bonus”).
Tab. Summary of main auctions conducted in 2018
Delivery year Auction closing price, PLN/kW/year Number of capacity agreements concluded Capacity obligation volume resulting from capacity agreements concluded, MW Auction closing round
2021 240.32 160 22,427.066 5.
2022 198.00 120 10,580.056 7.
2023 202.99 94 10,631.191 8.
In the main auctions, 374 capacity agreements were concluded for: 1, 5, 7, 15 and 17 delivery years.
The number of capacity agreements concluded under each auction, by duration of the capacity obligation, is shown in Table 4.
Tab. Number of capacity agreements concluded under main auctions held in 2018
Learn more
Duration of the capacity obligation in years Main auction for delivery year
2021 2022 2023
1 100 118 93
5 37 2 -
7 15 - -
15 6 - 1
17 2 - -
Total number of capacity agreements concluded 160 120 94
As a result of the capacity agreements concluded, capacity obligations were contracted for the years 2021 – 2037.
Between 3 January and 8 March 2019, PSE carried out another general certification..In total, in the course of certification, the applicants submitted 1,103 applications for entry in the register. Following verification, 1,092 units were entered in the register, including 985 physical generating units and 107 demand side response units.
Tab. Number and net maximum capacity of units entered in the register as a result of general certification in 2019.
Learn more
  Number of units entered in the register Total net maximum capacity of units entered in the register,
MW
Existing generating physical units 900 37,267.446
Planned generating physical units 85 14,587.115
Demand side response physical units 36 413.190
Planned demand side response units 71 2,120.000
Total 1,092 54,387.751
Having carried out the general certification, PSE prepared a proposal for the main auction parameters for the delivery period 2024 and the additional auction parameters for each quarter of 2021. The parameter proposal was submitted to the President of ERO and the Minister of Energy.
Certification for the main auction for the delivery year 2024 took place between 30 Auction and 8 November 2019.
Under this certification, capacity providers submitted 219 applications for certification, of which 154 concerned generating capacity market units and 65 concerned demand side response capacity market units.
As a result of the certification, our company issued certificates authorising capacity market units to participate in capacity auctions or the secondary market.
Tab. Number of established capacity market units certified for the respective delivery years
Learn more
Type of capacity market unit Number of established capacity market units
Existing generating capacity market units 93
Refurbishing generating capacity market units 43
New generating capacity market units 8
Demand side response capacity market units 64
Total 208
In the following years, the Act provides for holding one main auction per year, which will be held between 1 and 22 December in the fifth year before the delivery period. The next main auction, covering the delivery year 2024, will be held on 6 December 2019. As part of preparation for the auction, PSE held another test auction, which took place on 21 November 2019.
Challenges for the years ahead
The coming years will see a number of challenges for PSE in the context of the capacity market. These include, inter alia:
  • monitoring the capacity agreements concluded,
  • organisation of secondary trading,
  • replacement of planned demand side response units,
  • performing tests of demand side response units,
  • implementation of mechanisms supporting the participation of cross-border capacity in the capacity market,
  • collection of the capacity fee,
  • integration with metering/billing data acquisition systems,
  • implementation of the capacity market settlement model.

Upgrading the methods and tools supporting the zonal balancing market

Since October 2017, we have been running the Market Management System (MMS) project. Its objective is to improve the quality of the PPS operation planning and management while meeting the security criteria and minimising the costs of energy supply to consumers by implementing planning tools and operational management of the PPS based on the full network model (FNM) and locational marginal pricing of electricity.

Energy Market Information Operator

The objective of the project is to build a centralised system for the acquisition, collection, processing and provision of electricity measurement information through the deployment of the Central Electricity Market Information System (CSIRE) and establishment of the Energy Market Information Operator (OIRE) within the PSE organisation.
The establishment of OIRE and deployment of CSIRE will allow objectives to be implemented which are important from the point of view of the participants of the electricity market in Poland. The implementation of OIRE will make it possible, in particular, to:
  • effectively and securely exchange information in the electricity market, enabling the participants of that market to perform their statutory rights and obligations,
  • facilitate the electricity seller change process to reduce the risk of unequal treatment of market participants,
  • streamline processes as part of integration of the retail market and the balancing market, relating to measurement data, including for the purposes of network analyses and development of market signals.
The implementation of information exchange via CSIRE will contribute to better utilisation of the PPS resources, e.g. by facilitating the use of legislative and market tools. It will also allow peak power demand to be reduced to competition in the electricity market to be improved, e.g. by facilitating rational choices of consumers buying electricity. In addition, standardised information exchange via CSCIRE will reduce the risk of unequal treatment of market participants with regard to information access.
The deployment of a centralised system for the acquisition, collection, processing and provision of electricity metering information is one of the elements of a project of the Ministry of Energy which responds to the ground-breaking development of market mechanisms assumed in the European legislation. The development takes into account factors including full integration of distribution and transmission networks and the expected support to the efficient and secure operation of the PPS under conditions of internal and external competition.
In 2018, a concept of the Central Energy Market Information System was developed. The Team for the introduction of smart metering in Poland was established, attached to the Minister of Energy, in which PSE representatives actively participate.
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Development of DSR IP services and contracting reduction capacity

Changes taking place in the electricity sector, including an increase in the share of renewable sources in the generating structure, with the growing consumption of electricity at peak demand hours, result, among others, in the increased risk of a difficult balancing situation in the PPS. This situation requires the deployment of new tools available to the TSO, including the activation of the demand side, i.e. electricity consumers. This is ensured, among other things, by means of reduction of consumers’ demand on instructions from the TSO, i.e. the Demand Side Response (DSR) service.
Between September 2016 and July 2017, we developed and implemented new DSR service, called DSR Intervention Programmes (DSR IP). The new DSR IP service started the activation of the demand side on the electricity market based on new rules adapted to the capabilities of consumers and the needs of the PPS. The work produced outcomes in the form of contracting increased capacity volumes. The agreements for the provision of the DSR service concluded for the period from 1 July 2017 to 30 June 2018 under the Guaranteed Programme covered the aggregate reduction capacity volume of 361 MW in the summer season and 315 MW in the winter season. An additional, non-guaranteed reduction volume was acquired by concluding relevant agreements under the Current Programme. The first agreements for the provision of the DSR service, concluded under new rules, entered into force on 1 July 2017 and applied until the end of June 2018.
In 2018, PSE allotted another tender for the purchase of the DSR service under the Current Programme and the Guaranteed Programme for the period from 1 July 2018 to 30 June 2019. The total acquired guaranteed capacity, which can be reduced on instructions from the TSO is 362.5 to 534.5 MW in the summer season (with an option to obtain 609.5 MW). An additional, non-guaranteed reduction volume was acquired by concluding five agreements under the Current Programme..
In October 2018, PSE announced an additional tendering procedure for the purchase of the DSR service – Tender allotment ensure the availability of the DSR service offered by five Contractors (aggregators).
In coordination with DSO, our company included in the Transmission Network Code the obligation of power system operators concerning the certification of reduction facilities without an application. This obligation concerns facilities required to adjust loads to the degrees of restrictions in the delivery and consumption of electricity. In accordance with the applicable laws and regulations, the option was retained of certification at the request of facilities other than those subject to obligatory certification and willing to provide the DSR service. The new certification method will facilitate the process of DSR service provision by the a/m facilities. Dedicated provisions were included in the Transmission Network Code ( System Balancing and Constraint Management part) by decision of the President of ERO of 22 October 2018 and entered into force on 29 October 2018.
In order to acquire an additional available capacity announced during reduction of demand on the TSO’s instructions, in the 2nd quarter 2019 PSE announced a tendering procedure for the purchase of the DSR service under the Guaranteed Programme for the period from 1 April to 30 June 2019. As a result of the tendering procedure, an additional 23.5 MW was obtained, which increased the volume of capacity that can be reduced in April-June 2019 from 372.5 to 558 MW in individual hours (the ability to obtain a maximum of 633 MW by shifting flexible products).

Our plans

Development of the DSR service
The PSE expert team conducts work on the development of the DSR service by modifying the concept and operating rules of the DSR Intervention Programmes. Changes in the rules of the programmes – both the guaranteed one (with payment for readiness to provide the DSR service and for reduction) and the current programme and the simplified current programme (with payment for reduction) – developed on the basis of existing experience will allow us to maximise the utilisation of the consumers’ reduction capacity. The basic modifications developed in 2019 in the guaranteed and current programmes include the location parameter, i.e. the capability to use the service in defined areas.
Expansion of IT systems
Continuous development of the systems supporting the management of the DSR service under the Guaranteed and Current Programme is in progress, aimed to implement new functionalities in the service provision concept. In addition, IT systems were modified for the purposes of launching a new Simplified Current Programme. Implementation of changes to the system is performed in stages.
In order to enable distribution system operators ( DSO ) to carry out the certification process according to the rules set forth in the Transmission Network Code Revision Sheet (No CB/19/2018, “System Balancing and Constraint Management” part) the DSO portal for certification of Reduction Facilities was modified in 2018. Based on the new rules, DSOs and PSE certified approx. 11,600 consumers.
Implementation of the new Simplified Current DSR Programme
In the 1st half of 2019, PSE developed and implemented a new DSR OP Programme, i.e. the Simplified Current Programme, aimed to enable the activation of virtually all energy consumers in the electricity market. It is a voluntary programme, addressed to all consumers – in particular the consumers of contracted power from 300 kW, i.e. consumers subject to the regulation on the imposition of restrictions in electricity supply and consumption.