TGE adopts a Plan on Joint Performance of MCO Functions
• On 24 June, upon an application of Towarowa Giełda Energii (TGE), the President of the Energy Regulatory Office approved a document concerning the joint performance of MCO functions by NEMO operators, known as MCO Plan.
• The MCO Plan is a result of the efforts of 16 exchanges having the status of a Nominated Electricity Market Operator (NEMO). The plan implementation period must not exceed 12 months.
• The formal approval of the MCO Plan was made at the level of national regulatory authorities which reached an agreement as to the final shape of the document. The approved MCO plan fulfils the requirements set out in the CACM Regulation.
• Towarowa Giełda Energii has had the NEMO status since 2 December 2015.
The Commission Regulation (EU) No. 2015/1222 of 24 July 2015 concerning capacity allocation and congestion management (“CACM Regulation”) imposed an obligation on all the Nominated Electricity Market Operators (NEMOs) to prepare and submit for approval by all the national regulatory authorities a plan that sets out how to jointly set up and perform the MCO functions, i.e. the MCO Plan.
The MCO Plan sets out in detail the principles of governance and cooperation among the NEMO and specifically defines the relations with other parties. It also discusses the transition from the current market coupling initiatives for Day-Ahead Market and Intraday Market markets to a single market coupling mechanism being the foundation of the target European model for electricity.
“TGE has been consistently pursuing its objectives concerning the activity on international markets. However, a major challenge is still ahead of us as among the CEE countries Poland has been the only one to adopt the so-called competitive NEMO model, even though it was possible to maintain the monopoly of the incumbent exchange on the spot market until December 2019. This means that two other European NEMOs will start operating on the Polish market next to TGE. TGE is well prepared for a competitive market game but expects that Polish regulations will be adopted to the new circumstances so as to provide for equal treatment of NEMOs in terms of their rights and obligations as well as regulatory supervision, which will ensure fair competition” – said Dr Paweł Ostrowski, President of the Management Board of TGE.
TGE is a part the common European market for electricity. As far as the spot market, TGE is about to start operating under the Price Coupling of Region mode, which will put the Company at par with other Nominated Electricity Market Operators (NEMOs), the co-owners of the PCR Project. In the coming weeks, TGE will start acting as a rightful coordinating exchange on the European MRC (Multi-Regional Coupling) market.
The principal task of TGE as a NEMO is to ensure undisturbed development and effective functioning of the EU’s internal market for electricity. NEMO is the entity that will accept, match and execute offers/bids for electricity made on international day-ahead market and intraday markets operated under the market coupling model. This involves the provision of transaction information to TSOs in connection with transmission capacity to be made available. A NEMO is required to play the role of a Market Coupling Operator (MCO) in transboundary electricity trade.
The MCO Plan establishes a legal framework for the drafting of further documents on the electricity spot market by NEMOs, including the principles for the cooperation of multiple NEMOs on one market (so-called Multi-NEMO Arrangements), multilateral operational agreements, regulations, etc.
The approved MCO Plan has been prepared 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, the President of ERO also approved a Multi-NEMO Arrangements (MNA) document developed by PSE, which defines the assumptions for operation model of multiple NEMOs (exchanges) on the Polish electricity market. In this context, all the three NEMOs and PSE are about to enter into negotiations on operational agreements, Network Code provisions and other regulations which will enable the secure operation of the market. According to the common view of the concerned parties, the process will take approx. 12 months, i.e. the multi-NEMO model will start operating on the Polish spot market in mid-2018.
According to Article 9(14) of the CACM Regulation, each NEMO is required to publish the MCO Plan on the internet. The full content of the MCO Plan is available on TGE’s website at: https://www.tge.pl/plan-mco-i-inne-dokumenty