PSE S.A. views on the “Clean energy for all Europeans”

PSE S.A. views on the “Clean energy for all Europeans”

Regarding the proposed model of electricity market set forth in the package “Clean energy for all Europeans”, PSE is of the opinion that in order to maintain security and reliability of electricity supplies as well as to ensure effectiveness of electricity market, it is necessary to introduce in particular the following changes:

  1. The present zonal market model should be replaced with a nodal market model. If a simplified zonal model of the system is maintained for the purpose of market processes, it will not be possible for such processes to correctly reflect economic aspects and conditions specified for safe operation of electric power systems.
  2. Developing a mechanism of procuring electricity and capacity reserves within an integrated process. If electricity and capacity reserves are procured within separate market processes, system resources designed for supplying electricity to consumers are used in an inefficient way. Full text (PDF)

Main points regarding the proposed new rules for applying capacity mechanisms.

In the PSE’s opinion, the propositions set forth in the European Commission’s “Clean Energy for All Europeans” package are biased towards the model of pan-European energy-only market. However, prices of electricity have ceased to effectively stimulate investments in generation capacity or decisions to withdraw them. This is so because development of RES (renewable sources of energy) is supported with mechanisms that reduce fixed costs (and consequently, long-term fall of prices and their increasing volatility are observed), regulatory decisions are taken where maximum prices are taken into account, as well as due to instability of regulations and uncertainties of the market environment, which has led to the problem with ensuring adequate generation. A solution that may be adopted to reduce the risk of shortage of generation capacity are capacity mechanisms, and in particular a capacity market. Therefore, EU regulations should not pose barriers to its creation and development. Full text (PDF)

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