Capacity Market Implementation in Poland: Analysis of a Survey on Consequences for the Electricity Market and for Energy Management
Abstract
:1. Introduction
- Adequate quality of network infrastructure, whose development is determined by appropriate regulatory mechanisms;
- An appropriate amount of production capacity, developed through competition mechanisms, which significantly depends not only on the volume of installed capacity, but also on other factors such as availability, location, technology;
- Energy storage facilities, for which the point of development is the need to stabilize the network, for which increasing the share of unstable RES sources in the energy sector will also be an increasing challenge [23];
- Sector coupling, which can be an enabling solution for energy efficiency improvement [24].
- The so-called “Modernization” scenario, assuming a wide modernization of existing generation sources with a view to increasing the efficiency of production and reducing emissivity;
- The so-called “Withdrawals” scenario, assuming the obsolescence of generating sources that do not meet emission standards or production efficiency below a reasonable level.
2. Methodology
- General (the purpose of the questions contained in this section was to identify the area with the largest impact of the implemented regulations);
- Scenario (the purpose of the questions from this section was to develop the most likely scenario of the development of the Polish power industry, referring both to European regulations and domestic strategies redefined by the market power);
- Area (the purpose of the questions contained in this part of the survey was to examine the probability of occurrence of particular legal, economic, economic, or social effects that could be taken into account when preparing a long-term perspective for the power sector).
3. Results
- The regulatory area (A1) covers all types of legal acts, both national and European, influencing the shaping of the electricity market, as well as implementing acts and European Commission regulations regarding state aid.
- Technique and technology (A2) covers all electricity generation technologies, including increases in the efficiency of production and techniques that reduce the level of demand for electric energy (DSR with internal generation and without generation) as well as changes in demand in the daily cycle (e.g., energy storage).
- The economy (A3) covers the broadly defined financial liquidity of energy enterprises as well as the profitability of investments in modernization or the construction of new generation sources.
- The social area (A4) covers all final consumers (individual and industrial). Power security, which is key for the power market, is mainly addressed in this area. Society acts as the final payer for readiness and the most important beneficiary.
- The infrastructure area (A5) covers all kinds of activities related to network infrastructure—the construction or reconstruction of overhead or cable lines and additional infrastructure (e.g., switching stations).
- A conservative scenario covering the modernization and construction of new conventional sources, with small fluctuations in the volume of installed capacity in RES sources;
- An innovative scenario including increased interest in providing demand reduction services, construction of energy storage, and growing imports of electricity;
- An EU scenario covering the dynamic development of renewable energy and stable gas sources, mainly for the needs of the balancing market;
- A nuclear scenario, replacing coal-fired generating units with the construction of a nuclear power plant with a capacity corresponding to discontinued sources.
- 0%: no influence;
- 1–10%: insignificant effect;
- 11–20%: low impact;
- 21–30%: noticeable impact;
- 31–50%: significant impact;
- 51–100%: critical impact.
4. Conclusions
- There are a number of mechanisms to maintain energy security. Taking into account the specific conditions of the Polish power sector, the choice of a centralized power market seems to be the right choice, as it allows for a rational, competitive participation of all electricity generation technologies and DSR entities in the power auction. Rationalization manifests itself primarily through the conduct of the auction in the Dutch formula, with a declining price.
- The developed model of the Polish power market admits entities from the manufacturing sector and recipients to the auction, taking into account the actual restrictions. The inclusion of these aspects is manifested through the introduction of a correction coefficient of availability (KWD) for each technology.
- In each of the areas of the power sector predefined in the study, experts point to the effect of introducing a power market that strongly affects the direction of future changes. It is worth noting that the level of energy security and the construction and modernization of conventional generation sources deserve special attention. Both factors, according to the survey results, are characterized by a high probability of occurrence.
- The capacity market allows for the creation of a strong foundation for the development of renewable energy sources, despite the fact that the new regulations will not support these technologies.
- The share in the power market somehow forces innovations in the energy sector. The development of smart metering or energy storage technology is included in the requirements for power suppliers.
- There is no forecast of a rapid technological change in the manufacturing sector. Economic signals for investments in the generation sector will go mainly to conventional power plants, to gas-fired power plants, and to the demand side and result in their modernization. The role of DSR on the electricity market will increase significantly.
- The capacity market will be a kind of guarantee for the return on investments incurred. Experts point to making decisions on the construction of an offshore wind farm or a nuclear power plant motivated by a new remuneration mechanism for readiness.
- The modern electricity grids worldwide have begun to rely more heavily on renewable energy sources, most of which are intermittent and distributed in nature. There is a concern that grid operators and power markets will struggle to cope. The subject of intense interest to power generation companies and transmission organizations across the globe are experiences from the German power market in this regard.
- It is estimated that in the near future we will observe in the EU a transition, for example, in gas engines, from an electricity market to one that is predominantly supplied by intermittent renewables balanced with flexible generation.
- In the largest EU countries, Demand Response (DR) is being prioritized in managing electricity networks, particularly in case of shortage risks in national energy systems [70].
- The introduction of a power market should affect the principles of energy management, opening more space for renewable energy sources and supporting energy efficiency on the side of consumers, contributing therefore to an increase of sustainability in the economy.
- It can be assumed that the marked change being introduced will also create an increase in energy security and bring Polish energy to a state closer to that of Germany.
Author Contributions
Funding
Conflicts of Interest
References
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A1 | Regulatory area |
P1 | Improvement of regulatory stability of the power sector |
P2 | New contracts for supplying power from abroad |
P3 | Distortion of competition between manufacturing technologies |
P4 | Increased competition between renewable energy and conventional energy |
A2 | Technique and technology area |
T1 | Construction of new conventional sources |
T2 | Development of electricity storage technologies |
T3 | Modernization of existing conventional sources |
T4 | Reduction of CO2 emissions and increase of production efficiency |
T5 | DSR development |
T6 | Construction of new renewable energy sources |
A3 | Economy area |
E1 | Improving the profitability of conventional power plants operation |
E2 | Increase in revenues of entrepreneurs participating in DSR |
E3 | Significant increase in electricity prices for households |
E4 | Significant increase in electricity prices for businesses |
A4 | Social area |
S1 | Improvement of energy security of customers |
S2 | Increase in dissatisfaction with the power charge |
S3 | DSR development |
S4 | Improvement of sentiment in mining |
A5 | Infrastructure area |
I1 | Development and modernization of power grids |
I2 | Development of cross-border connections |
I3 | Smart metering of networks |
I4 | Development of distributed generation |
Effect | Arithmetic Weight | Effect | Arithmetic Weight | Effect | Arithmetic Weight | Effect | Arithmetic Weight | Effect | Arithmetic Weight |
---|---|---|---|---|---|---|---|---|---|
P1 | 4.8 | T1 | 2.9 | E1 | 4.8 | S1 | 4.8 | I1 | 3.1 |
P2 | 1.3 | T2 | 2.0 | E2 | 2.8 | S2 | 1.9 | I2 | 2.6 |
P3 | 1.5 | T3 | 4.1 | E3 | 1.0 | S3 | 2.2 | I3 | 4.3 |
P4 | 1.5 | P4 | 1.2 | E4 | 1.3 | S4 | 0.6 | I4 | 0.6 |
T5 | 1.4 | ||||||||
T6 | 0.4 |
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Tucki, K.; Orynycz, O.; Wasiak, A.; Świć, A.; Dybaś, W. Capacity Market Implementation in Poland: Analysis of a Survey on Consequences for the Electricity Market and for Energy Management. Energies 2019, 12, 839. https://doi.org/10.3390/en12050839
Tucki K, Orynycz O, Wasiak A, Świć A, Dybaś W. Capacity Market Implementation in Poland: Analysis of a Survey on Consequences for the Electricity Market and for Energy Management. Energies. 2019; 12(5):839. https://doi.org/10.3390/en12050839
Chicago/Turabian StyleTucki, Karol, Olga Orynycz, Andrzej Wasiak, Antoni Świć, and Wojciech Dybaś. 2019. "Capacity Market Implementation in Poland: Analysis of a Survey on Consequences for the Electricity Market and for Energy Management" Energies 12, no. 5: 839. https://doi.org/10.3390/en12050839