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Energy 13 July, 2017 9:00 am   
Editorial staff

TGE will compete for contracts with other exchanges in Europe 

Commission Regulation (EU) 2015/1222 establishing a guideline on capacity allocation and congestion management (CACM Regulation) requires from all nominated electricity market operators (NEMO) to prepare and present for approval by all national energy regulation institutions a plan detailing how NEMOs will be established and function as market coupling operators, aka the MCO (market coupling operator) plans. 

The MCO plan determines in detail the rules of management and cooperation between NEMOs and precisely defines relations with other entities. It also discusses the change from the current market coupling initiatives for the day-ahead and intra-day market to a single market coupling mechanism for those markets, which constitutes the foundation of the target European model for power.

“TGE (Towarowa Giełda Energii S.A.) is consistent in performing tasks related to its activities on international markets. However, we are about to face a huge challenge – out of all Central and Eastern European countries only Poland adopted the so-called competitive NEMO model, even though it was possible to keep the monopoly of the national exchange on the spot market until December 2019. Apart from TGE, two European NEMOs will enter the Polish market. TGE is ready to compete on the market, but it expects that Polish regulations will be adjusted to the new conditions to ensure all NEMO operators are treated equally with regard to permissions, duties, as well as regulatory supervision, which will ensure fair competition,” said Paweł Orłowski, PhD, TGE’s President of the Management Board.

TGE is part of the common EU energy market. When it comes to the spot market, TGE is currently at the stage of operational entry into the Price Coupling of Regions model, which will make the company equal to the other NEMOs, co-owners of the PCR Project. Within the next few weeks TGE will start its operation as a fully-fledged coordinator exchange on the European Multi-Regional Coupling (MCR) market.

TGE’s basic task as a NEMO is to ensure an uninterrupted establisment and efficient operation of a common European power market. NEMO is an entity, which will accept, link and implement offers of sale/purchase of electricity, that will be concluded on day-ahead and intra-day markets on the international level as part of the market coupling model. This entails providing grid operators with information on concluded transactions regarding capacities that were made available. The NEMO is obliged to provide the Market Coupling Operator function for international electricity trade.

The MCO plan provides a legal framework for NEMOs to prepare further documents for the electricity spot market, including rules of cooperation of many NEMO operators on one market (so-called Multi-NEMO Arrangements), multi-lateral operation agreements, rulebooks, etc.

The approved MCO plan was designed by: BSP Reglonal Energy Exchange LLC, Croatian Power Exchange Ltd., EirGrid pic, EPEX SPOT SE, EPEX SPOT Belgium SA, EXAA Abwicklungsstelle fi.ir Energieprodukte AG, Gestore del Mercati Energetici S.p.A., HUPX Hungarian Power Exchange Company Limited by Shares, Independent Bulgarian Energy Exchange EAD, Operator of Electricity Market S.A., Nord Pool AS, OKTE a.s., OMI – Polo Espaiiol S.A. (OMIE), Operatorul Pletel de Energie Electrica si de Gaze Naturale „OPCOM” SA, OTE A.S., SONI Limited and Towarowa Giełda Energii S.A.

In June 2016, the President of the Energy Regulatory Office approved the Multi-NEMO Arrangements (MNA) document as well. It was authored by PSE (Polish transmission system operator) and detailed the assumptions for the operation of many NEMOs (exchanges) on the Polish power market. Within this scope, all three NEMOs and PSE will soon start negotiations on operational agreements, Transmission Network Code instructions and other regulations that will ensure a safe operation of the market. All parties estimate that the process will take about 12 months, which means the multi-NEMO model will enter the Polish spot market in mid-2018.