Integrated annual report 2017 edition

6 Active participation in the development of the electricity market

We are the electricity market maker and reformer.
We represent the Polish power system in the international arena.
We actively participate in the European law-making process.
We build the independence and security of the Polish power system.

National electricity market

The energy market in Poland started to emerge upon the entry into force of the Energy Law in April 1997. The market creation process consisted of a number of interrelated activities, such as:

  • liberalisation of the market in order to open it up to cooperation on commercial terms for generation, transmission, distribution and energy trading companies,
  • abolishment of monopolies in the power sector by unbundling the above sub-sectors,
  • privatisation aimed to transform state-owned enterprises into companies wholly-owned by the State Treasury.

Those measures were necessary to establish appropriate competition mechanisms in the energy market and ensure its correct pricing. However, it was not the only objective for which market mechanisms were launched. Apart from a correct pricing mechanism, it became necessary to simultaneously guarantee the security of electricity supply while ensuring its high quality.

The basic assumption behind the implementation of the electricity market is that electricity as a product has to be separated from other commodities for which it is a carrier. This makes it possible to separate the pricing of electricity as a product from other services (involving, among other things, ensuring the secure operation of the power system) and to introduce competitive trading rules in the segment. Under conditions of market economy, electricity gradually ceases to be treated as an essential "good", which a public utility enterprise is obliged to supply, and it becomes an ordinary traded "commodity".

In addition to a correct new definition of electricity as a commodity, for a competitive energy market to exist there must also be its relevant participants. They are categorised according to the significant roles they play in the national power market, i.e. generators (power plants, CHP plans, RES), traders (companies trading in energy), transmission companies (transmission system operators, TSOs) – in Poland, Polskie Sieci Elektroenergetyczne) and electricity distributors (distribution system operators, DSOs), and final consumers (households and all non-household customers who buy electricity for business purposes).

Electricity trade takes place at various levels:

 in the contract market

in the contract market

under bilateral contracts between the generator and the trader or final consumer.

 in the power exchange market

in the power exchange market

where trading takes place on an organised trading platform both in the long-term timeframe and in the day-ahead market and the intra-day market.

 in the balancing market

in the balancing market

where the TSO balances the differences between transactions made with market participants and real electricity demand.

In the energy market introduced in Poland, competition takes place not only between its actors but also between its different segments – and in different timeframes. Starting competition in the contract market many months or even years ahead of the trading day, continuous flow of information on the technical and commercial/technical (contracting status) balancing of the system, as well as interactive impact of markets and entities, support the ongoing optimisation of the market position of each entity, Rationalisation of their commercial risk is conducive to active participation in competition. Such a model best supports market optimisation of the way consumer demand for electricity is covered. Importantly, a practical opportunity to implement a liberalised and decentralised energy market has emerged relatively recently, owing to a significant progress in the development of technology, in particular ICT.

Description of European regulations and their impact on the operation of the Polish electricity market and PSE's activities

On 30 November 2016, the European Commission published a package of documents, including legislative proposals, concerning the electricity sector, under the title Clean Energy for All Europeans. The publication was a continuation of the European Commission's measures announced in 2015 in its communication on the establishment of the Energy Union. The package published contains a number of regulatory proposals concerning the shape of the electricity market, security of electricity supply, energy efficiency and RES, and presents the rules for the management of the Energy Union.

Presented below are legislative proposals forming part of the package, which are most relevant to the TSO

Amendment to Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009

concerning common rules for the internal market in electricity (COM(2016) 864 final).

Amendment to Regulation (EC) No 714/2009 of the European Parliament and of the Council of 13 July 2009

on conditions for access to the network for cross-border exchanges in electricity (COM(2016) 861 final).

Amendment to Regulation (EC) No 713/2009 of the European Parliament and of the Council of 13 July 2009

establishing an Agency for the Cooperation of Energy Regulators (COM(2016) 863 final).

Proposal for a Regulation

of the European Parliament and of the Council on risk-preparedness in the electricity sector and repealing Directive 2005/89/EC (COM92016) 862 final).

Proposal for a Regulation of the European Parliament and of the Council

on the Governance of the Energy Union (COM(2016) 759 final).

Amendment to Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009

on the promotion of the use of energy from renewable sources (COM(2016) 767 final).

All the documents forming part of the Clean Energy for All Europeans package will be dealt with by the European Parliament and the Council, and will then proceed to the trilateral negotiation stage between the above-mentioned institutions and the European Commission with the participation of Member States.

As a transmission system operator, we support the objectives of the proposed regulations, i.e. effective integration of RES, improving demand and supply-side flexibility, integrating the wholesale and retail markets, price formation in a manner that reflects competitive relations between supply and demand, developing long-term markets to provide protection against price volatility, and increasing the security of electricity supply.

As a result of an analysis of the proposed solutions, we notice a number of regulatory risks correlated with solutions that do not support the achievement of the objectives identified.

Listed below are the risks that have a direct impact on the operation of our company

  • maintaining a simplified zonal representation of power systems in market processes, as a result of which it is not possible for those processes to correctly reflect economic aspects and conditions for the secure operation of power systems,
  • preventing the differentiation of real electricity prices (prices in the balancing market) within a single zone resulting in the inability to individually coordinate the operation of electricity production and loads in a given zone according to the condition prevailing in the zone,
  • imposition of the requirement to procure electricity and reserve power within separate market processes, resulting in an inefficient use of system resources designed to supply electricity to consumers.

What also poses a significant regulatory risk is the proposal to set up Regional Operating Centres that would be authorised to issue binding orders to national transmission system operators regarding issues of key significance to operational security of their systems. This represents a far-going interference with the existing process of managing the interconnected European systems – it limits the scope of activities and decisions that can be taken by TSOs to fulfil the obligation of ensuring system operation security in a given area. Separation of decisions affecting system operation security from responsibility for the security may lead to competence conflicts and to non-optimal operational decisions that directly affect the operation of the Polish power system as part of interconnected systems.

PSE's position on the short-term and long-term prospect of market development to the year 2030

GRI 103 The implementation of the electricity market in Europe began in 1996 when the First Energy Package was published. It 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 regulatory acts at the level of regulation directly implemented in 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

Forward Market

Day-Ahead Market

Intra-Day Market

Cross-Border Balancing Market

The pillars of the target model of the European electricity market are as follows

Zonal model

of power system representation.

Flow Based Market Coupling

(FBMC) method as the basis for capacity calculation and allocation.

It is important to separate 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.

We have shared our position on the organisation of the electricity market many times in the course of the work. We have spoken in various forums on the possible directions of further detailed solutions.

Created with Sketch.

Capacity allocation method

Due to the meshed network structure in Continental Europe and the resulting complex power flows in this network, the Flow-Based method should be used to allocate the capacity of continental Europe. 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 authorised.

The Flow-Based method represents physical power flows across the network and allows their acceptable values to be controlled and maintained for each network element. It 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, the ATC method continues to be used. However, according to the provisions of the Network Codes, from 2019 on, the Flow-Based method is to be used in the CEE region – together with CWE it will form a single larger region called CORE.

Representation of network resources in market processes

The European electricity market concept is based on a zonal model. It 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 those zones (the zone is a “copper plate”) – and consequently the same electricity price applies. 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 is insufficient to meet the needs of market participants.

Currently, the bidding zone structure of the European market is based on a division corresponding to national borders, with the following deviations from this rule:

  • German and Austria form a single zone,
  • Sweden is divided into 4 zones,
  • Norway is divided into 5 zones.

Bidding zone structure of the European electricity market

The European energy market model introduces a zone verification procedure (so-called bidding zone study) which evaluates the validity of the existing zones and redefines them where required. The first iteration of the study is currently being implemented. It concerns the Core CCR and faces many challenges in implementation. In parallel, due to numerous interventions of the President of the Energy Regulatory Office and PSE, supported by ACER, work is in progress on the division of the Austrian-German zone into two zones: Austria and Germany. The work is supervised by the German regulator. A decision establishing transmission capacity calculation regions, issued on 17 November 2016 by ACER, introduced the obligation to allocate the capacity at the Austrian-German border.

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. Conversely, 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: the price of electricity and the price of reserve power.

Created with Sketch.

Integrated approach to electricity and balancing reserves

Electricity and balancing reserves are interrelated products, as they can be delivered from a single source. At the same time, they are interrelated by their simultaneous use in supply to consumers. Electricity is supplied to consumers, whereas reserves secures the continuity and dependability of the supply.

In spite of this situation, the concept of the European electricity market implies separate treatment of these products in market processes. Electricity is sold and purchased by market participants on exchange markets and through bilateral transactions. The acquisition of reserves  remains the domain of system operators. Separation of these products results from the approach forced through for many years in Europe, based on the assumption that technical issues, including in particular the provision of required levels of reserves, 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.

Day-ahead Market

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.

Its basic tasks are presented below

  • creating electricity prices for contracts concluded in the wholesale electricity market in Poland,
  • providing the capability for balancing contract positions,
  • allowing the valuation of enterprises that deal mainly with electricity generation,
  • generation of investment signals for building new generating units.

Quotations are made in the DAM every day, including holidays. Trading is carried out two days and 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.

It can be noticed that 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 a growing interest in the DAM is the fact that the market responds dynamically to the customer's needs. In addition, transaction made in that market yield higher financial benefits than transactions made in forward markets. Another advantage of the DAM is the opportunity to purchase electrical energy through different trading platforms, i.e. telephone trade, the Polish Power Exchange, the balancing market, POEE web platform, and the electronic electricity trading system Kantor Energii.

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. Therefore, 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 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 type, i.e. one that combines 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 or 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.

Graphical illustration of Market Coupling

Uncoupled markets

Created with Sketch.

Coupled markets

Created with Sketch.

Coupled markets
Cross-border exchange constraint

Created with Sketch.

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 four projects are being developed:

MRC (Multi Regional Coupling) – the basic Market Coupling initiative in Europe, developed until 13 May 2014 under the name of NWE (North-Western Europe). It is the largest and most advanced project, which started operation on 4 February 2014 through market coupling of the Central Western Europe (CWE) region and the Nordic countries including Lithuania, Latvia and Estonia based on the PCR market coupling mechanism recognised as the target solution for the whole of Europe, and the NTC allocation mechanism. As of 13 May 2014, the NWE project was joined by the South-Western Europe (SWE) countries – Spain and Portugal.

The pan-European MRC energy market (Multi Regional Coupling) covers most of EU territory, except the Central and South-Eastern Europe countries. Poland has been participating directly in MRC since 2016, as allocation of transmission capacity takes place within that market on the Swe-Pol and Lit-Pol interconnections. In May 2017, we became a full member of MRC.

CWE FB – initiative of the CWE region consisting in a change of the method of capacity calculation from ATC to coordinated FBA. The project was launched in May 2015. Since then, some of the borders subject to the MRC mechanism are allocated according to the Flow-Based Market Coupling methodology, while the rest as ATC (in technical terms, it is absolutely feasible).

CORE FB MC – a project of the Central-Eastern Europe region (Germany, Poland, Czech Republic, Slovakia, Hungary, Austria and Slovenia) which provides for the implementation of the market coupling mechanism based on PCR and the FBA allocation mechanism and joining the MRC region. The project started operation as CEE FB MC. Currently, after the coupling of the CWE and CEE regions, the CEE FBMC project is implemented as a joint project of the CORE FBMC region. The planned completion, including the covering of the Polish-German, Polish-Czech and Polish Slovakian borders, will take place in late 2019/early 2020.

4M (lub 4MC) - NTC MC operating in the Czech Republic, Slovakia and Romania. The process is performed on the basis of the MRC (PCR) methodologies and tools but it is independent of it (two separate data centres, a different trading gate, i.e. 11:00). The project was launched owing to delays in the CEE FBMC project as a transitional solution, and has been trying to join MRC from its start. MRC members from Continental Europe have so far been strongly against NTC-based coupling between 4M and MRC – the reason was a lack of coordination in capacity calculation, which, combined with the highly efficient MRC mechanism could pose a threat to network operation security of Continental Europe. Planned coupling of 4M with MRC is to take place together with CORE FB MC, i.e. in late 2019/early 2020.

Market Coupling initiatives in Europe

Flow-Based Market Coupling

Currently, all Market Coupling couplings, except the CWE region, are based on the bilateral capacity calculation methodology NTC, in which interdependences of energy 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 be economically and technically efficient, the European electricity market 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 Regulation 1222/2015 (CACM Regulation) establishing a legal framework for the European electricity market.

Created with Sketch.

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.

Initially, the initiative of Energy Exchanges involved the day-ahead electricity markets in Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, the United Kingdom, as well as Italy, Latvia and Lithuania.

The project started in 2009 and the PCR parties signed the cooperation agreement in June 2012. The initiative is open to other European Power Exchanges wishing to join. In 2016, PCR was joined by the Polish Power Exchange TGE.

The PCR initiative is based on three main principles

Principle 1

One single algorithm: the algorithm gives a fair and transparent determination of day-ahead electricity prices across Europe and allocates cross-border capacity. It was developed respecting the specific features of the various power markets across Europe. It optimises the overall welfare and increases transparency.

Principle 2

Robust operation: the PCR process is based on decentralised sharing of data, providing a robust and resilient operation.

Principle 3

Individual accountability: the PCR Broker and Matcher (PMB) allows the exchange of anonymised order books and cross-border transmission capacities among the Power Exchanges to calculate reference prices and transmission flow volumes between all bidding zones.

Intra-day market

We are engaged in activities aimed at implementing pan-European solutions for the intra-day market through participation in the Cross-Border Intraday Market (XBID) project recognised by the EC as the target solution for the European intra-day market. The solution scheduled for implementation under XBID will make it possible – to enter into transactions on a continuous basis across Europe within the limits of available capacity. The target intra-day market model in Europe is to be based on continuous implicit trading.

Basic principles of the model

Continuous trading

is performed with the use of an organised trading platform for electricity, e.g. in the form of a bulletin board where market participants continuously post bids to buy or sell electricity, stating the volume and price at which they are willing to make a transaction. This means that the first market participant who accepts a bid enters into a transaction.

Cross-border trade

capabilities are determined by available capacity. It is the capacity that has been made available by the TSO after a new capacity calculation round. Each market participant can see only physical bids which are feasible, i.e. those for which sufficient cross-border capacity is available, necessary for a particular transaction between bidding zones to be executed.

The essential elements of the XBID project comprise two solutions

Central solution

a pan-European IT system within which the process of matching bids and offers will be performed taking into account available capacities.

Local Implementation Projects (LIPs)

representing XBID implementation on individual cross-border interconnections or interconnection groups.

We have initiated measures aimed to implement the first local XBID solution in the Polish bidding zone. It includes the interconnection between Poland and Sweden and Lithuania. At a later stage, steps will be taken to connect synchronous borders (within the CORE CCR).


Nowadays, when the EU policy exerts a strong influence on the shape of the power sector, cross-border interconnections play a significant role in the formation of a national power system. At the end of 2015, a new Poland-Lithuania cross-border DC interconnection was commissioned, increasing Poland's import and export capacity by 500 MW. The Poland-Lithuania power link is a strategic project designed to close the Baltic Ring.

In addition, as a result of arrangements with Swedish operator SvK, a so-called virtual market zone has been operating since July 2017, which allows total constraints on the SwePol and LitPol links to be defined. This will ensure a better market-based use of both interconnections (e.g. for the purposes of electricity transit from Sweden to Lithuania via the Polish system in case it is not possible consume it in the Polish Power System).

Regional, inter-TSO and European cooperation

Inter-TSO cooperation within the European Network of Transmission System Operators for Electricity (ENTSO-E)

We are a member of the European Network of Transmission System Operators for Electricity - (ENTSO-E). ENTSO-E groups together 43 transmission system operators from 36 countries.

The objective of ENTSO-E 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 energy market.

Regional cooperation with neighbouring TSOs

As transmission system operator who operates within the interconnected systems of Continental Europe, we manage exchange capacities on Poland's cross-border interconnections with the neighbouring countries. The capacities are calculated and allocated in coordination with the TSOs of neighbouring systems in the annual, monthly and daily timeframes (day-ahead and intra-day market). Within the framework of regional cooperation with neighbouring operators, we update on a current basis inter-TSO agreements and agreements for emergency electricity supply.

Regional cooperation under the TSO Security Cooperation (TSC) initiative

We actively cooperate with other European operators under the TSO Security Cooperation (TSC) initiative. The members of TSC are 13 operators, and 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.

PSE's representatives also work in the TSC working groups.

Regional cooperation with Capacity Calculation Regions

Until November 2016, we carried on work on the implementation of Flow-Based Single Market Coupling on parallel interconnections under the NWE CEE Flow-Based Market Coupling project involving representatives of the TSOs and Energy Exchanges from CEE CCR.

In their proposal for the establishment of capacity calculation regions (commitment under Article 15(1) of the CACM Regulation), the TSOs maintained the CEE and CWE CCRs as separate regions, while declaring to merge them into a single region. To this end, the CEE-CWE Day Ahead Flow-Based Capacity Calculation project was set up, which also involved representatives of our company. The proposal for the establishment of capacity calculation regions was rejected by the Austrian regulatory authority, E-Control, owing to unambiguous introduction of capacity allocation on the DE/LU-AT border. In view of E-Control's objection, the decision to establish capacity calculation regions was taken by ACER, upholding the introduction of capacity allocation on the DE/LU-AT and merging the CEE and CWE regions to form a single CORE CCR. As a result, regional projects from the CEE and CWE regions were closed, and tasks were transferred to structures connected with the CORE region.

Poland belongs to three capacity calculation regions: CCR CORE, Baltic and Hansa, which were established in November 2016 by ACER's decision within market zones on the proposal of all transmission system operators.

Engagement in XBID

We are engaged in work on the Accession Stream – a group aimed to align the knowledge level with the XBID mainstream (countries of North-Western Europe and Italy, Spain, Portugal, Austria) and eventually to implement XBID solutions in non-mainstream countries. We also take measures in areas which are not mandatory for members of the Accession Stream, in which solutions are developed that influence the conditions of future operation of the European intraday market (e.g. participating in the preparation of the Intra-Day Operation Agreement).

Engagement in MNA

We have prepared and presented for approval by the ERO President the rules governing the coexistence of multiple NEMOs (Nominated Electricity Market Operators) in the Polish bidding zone (MNA – Multi NEMO Arrangements). The rules in question were approved by the President of ERO on 5 June 2017. In July 2017, we started working towards MNA implementation, which requires changes both in the national balancing market and in the organisation of the market coupling process on the LitPol and SwePol links.

European regulations – inter-TSO cooperation

We cooperate in the processes of developing or giving opinions on European regulations and related documents on the operation security and stability of the power system, carried on within ENTSO-E, the TSC initiative and individual CCRs.

Presented below are the key issues of our cooperation.

  • improvement of the quality of the cross-border capacity calculation and allocation process,
  • improvement of the system operation planning process (Day-Ahead Congestion Forecast and Intra-Day Congestion Forecast),
  • introduction of fair rules for the allocation of inter-TSO remedial actions, assigning the obligation to cover such costs to the parties responsible for their generation (polluter pays principle),
  • implementation of the European electricity market solutions consistent with the requirements of the European network codes, in particular with regard to implemented guidelines on capacity allocation and congestion management (CACM) and system operation guidelines (SOGL) pending implementation, as well as a network code network code on electricity emergency and restoration (NCER),
  • improvement of cohesion between the market model and physical laws, by starting flow-based allocation for the intra-day and day-ahead markets, and for the cross-border balancing market.

We actively participate in the process of preparing ENTSO-E's comments on documents published by the European Commission as part of the Winter Package – in particular, with regard to the regional operating centres (ROCs), calculation of cross-border exchange capacity, issues concerning elements of the new market model and capacity mechanisms.

Cyber threats management

GRI 103 Due to its significant impact on the security of the Polish power system, cyber security plays a key role in PSE's business strategy. In 2017, the PSE CG ICT Strategy for 2017-2019 was developed and launched. 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 and sets directions of activity for those areas

 Network segmentation

Network segmentation

separation of resources with different sensitivity levels



a functional and secure work tool

 Internet interface

Internet interface

our outer perimeter

 Detection and response

Detection and response

prepared for attack

The ICT strategy highlights the unavoidable and mutual dependence of cyber security of our company, its market partners at home and abroad, and entities of the Capital Group, and it describes the overall impact of cyber security on the operational stability of the PPS.

In collaboration with our shareholders (the a/m entities), we carry on activities aimed to ensure an appropriate level of ICT security and strategic harmonisation of the efforts made. We also closely cooperate with entities responsible for cyber security of the country and the power sector.

To enhance the cooperation, build awareness of threats to cyber security and approach to counteracting such threats, we actively participate in numerous conferences, seminars, as well as national and international industry cooperation forums.

Representatives of the ICT Department are also engaged internationally in projects aimed to ensure energy security in Europe. One of such areas is the activity in the European Network of Transmission System Operators for Electricity (ENTSO-E).

PSE's representatives develop new solutions or concepts and principles concerning critical infrastructure in different ENTSO-E working and project groups. We present some of them below

Critical System Protection (CSP)

The group deals with the protection of critical infrastructure, also in terms of cyber security.

Cyber Security Special Interest Group

The organisation deals with ICT security issues. Its task is to monitor information on global threats, cooperate under other projects where care of security is required, and shape the rules for secure operation of systems and operators.

ENTSO-E’s Electronic Data Interchange (EDI) Working Group

A group that has prepared electronic information standards in the European electricity market. Under an agreement with IEC TC57, standards developed by ENTSO-E are approved as international standards of electronic information exchange and then successfully implemented in IT solutions, including those serving the implementation of network codes.

PSE members also contribute to the work of other groups, supporting them with their competence, and organise an internal team for information exchange on cyber threats in the power sector. Other teams deal with the management of the inter-TSO IT network and design future ones that will be created to address growing needs of operator and market systems. In the course of that work, concepts of new connections for data exchange between transmission system operators are created and the existing connections are developed. Cooperation in the above-mentioned groups significantly contributes to the security and stability of the power systems in Europe. It also helps to improve employee skills and support partners in the process.

Critical infrastructure security

GRI 103 To ensure security of PSE critical infrastructure, we cooperate on an ongoing basis with public administration entities at the local, regional and central levels. In 2016, representatives of our company actively participated in regional and national forums on critical infrastructure (CI) protection, a major area of cooperation between public administration and critical infrastructure operators.

In the year under review, we prepare protection plans for CI sites owned by PSE S.A. In 2017, the plans were coordinated with parties including provincial Police commanders of competent territorial jurisdiction, provincial commanders of the State Fire Service, and provincial building inspectors and province governors, and then with the Minister of Energy. The last stage of work on the plans will be their submission for approval to the Director of the Government Security Centre.

PSE has closely cooperated with the government administration, in particular the Government Security Centre, the ABW Anti-Terrorist Centre, the Police, and provincial authorities during the organisation and protection of the NATO Summit in Warsaw (7-10 July 2016) and the World Youth Day in Krakow (25 July-1 August 2016).

Our company, together with the Metropolitan Police Headquarters and the Security and Crisis Management Department of the Mazowieckie Province Authority, also took part in the crisis management exercise DELTA 2016. The purpose of the exercise was to check the preparedness of public administration entities and selected CI operators to the introduction of alarm level 4 DELTA.

ICT security

In December 2016, we established the PSE Computer Emergency Response Team (CERT) at our company. The Team is a part of Security Department.

CERT performs the following tasks:

  • conduct analyses and resolve incidents in the 1st and 2nd lines of support,
  • coordinate incident management,
  • improve employee awareness, publish threat alerts and warnings,
  • issue ICT security bulletins,
  • report incident information,
  • perform forensic (legal) analyses,
  • perform analyses of security threats and problems (including malware analysis),
  • cooperate with third parties in coordination of incident management,
  • exchange threat information with third parties (e.g. CERT NASK, CERT.GOV.PL, RCB),
  • provide security advisory services,
  • create and develop security standards.

Following the establishment of the CERT, we took measures aimed to join the Trusted Introducer initiative supporting response to security incidents in Europe and neighbouring countries. The initiative was established in 2000 by TF-CSIRT – the largest European organisation promoting cooperation with CERT. On 22 June 2017, PSE CERT as the fourth Polish response team became a member of Trusted Introducer. Joining this prestigious group paved the way to broader cooperation with other European teams, and consequently to more efficient, faster and more effective response to incidents of ICT security incidents at PSE. What is more, our company has submitted the declaration of lead entity managing the Sectoral CERT for the electricity area.

The planned functions are listed below:

  • coordinating incident management within the sector,
  • conducting analyses of ICT security threats and complex incidents,
  • keeping a register of incidents in the power sector,
  • publishing threat alerts and warnings,
  • threat information exchange between sector entities,
  • improving the awareness of the sector's employees.

Go to