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OUR STRATEGYImplementation of the business strategy for 2020-2030

Selected strategic directions

Building a competence centre capable of implementing innovations

Research and development activities (hereinafter: R&D) are aimed at creating new technical solutions, unique knowledge, services and processes to ensure that our organisation is adapted in the areas of technology and market to dynamic changes in the environment. In 2022, activities were carried out to further improve the management of the R&D area, particularly in the planning, execution and monitoring of research and development (R&D) works – so that it is comprehensive, consistent and can ensure effective response to the company's needs and the implementation of appropriate innovations in the future.
Activities carried out in 2022 were focused on building relationships with both domestic and foreign partners, with the aim of taking part in future international research and development projects that will be carried out as part of announced research grant competitions, including Horizon Europe. We pay great attention to increasing the involvement of the PSE CG in international R&D projects in new market services and power technologies (2017 – EU-SysFlex, 2020 – OneNet).
We were also involved in streamlining the process of settling and monitoring completed R&D projects, and in implementing a system for supervising the implementation of deliverables of these works, in order to maximise the benefits and achieve the intended effects of the intentions made.

Implementation of mechanisms for coupling Day-Ahead and Intraday markets – Market Coupling

PSE is involved in the process of building a European electricity market under the Market Coupling Project involving:

  • coupled Day-Ahead market – Single Day-Ahead Coupling (SDAC),
  • coupled Intraday market – Single Intraday Coupling (SIDC).

From the perspective of the Polish market area, the implementation of SDAC and SIDC takes place using a model that allows multiple NEMOs (Nominated Electricity Market Operators) implemented under the Multi NEMO Arrangements (MNA) project.

SDAC

SDAC is a central segment of the European electricity market model. This is a mechanism whereby prices for each market area in Europe are determined in a coordinated manner, in a common process, and with a single calculation point. Transmission capacity allocation is based on the price differential between market areas. It is therefore an implicit auction model, i.e. combining trading of transmission rights and electricity. Market participants do not book transmission capacities to execute their cross-border transactions, but only to buy/sell energy in the market to which they are geographically assigned. The transmission capacity allocation by the MC mechanism takes place automatically when energy is traded, in a way that maximises the total market surplus.

SDAC implementation began in February 2014 with the participation of the following countries: Belgium, Denmark, Estonia, Finland, France, Spain, the Netherlands, Lithuania, Luxembourg, Latvia, Germany/Austria, Norway, Poland (via SwePol Link), Portugal, Sweden and Great Britain. The coupling between the NWE and SWE regions – the so-called MRC (Multi Regional Coupling) – was launched in May 2014. In subsequent years, SDAC's coverage was gradually expanded. From Poland's perspective, the most important SDAC development activities occurred on:

  • 17 June 2021 – a launch of the Interim Market Coupling (ICP) connecting the Day-Ahead Capacity Markets in Poland and 4MMC countries (Czech Republic, Slovakia, Hungary, Romania) with Europe's largest MRC market by introducing implicit capacity allocations on six borders (PL-DE, PL-CZ, PL-SK, CZ-DE, CZ-AT, HU-AT). The Interim MC project did not introduce any changes to the manner of determining cross-zonal transmission capacities, which were still determined using the NTC (Net Transfer Capacity) method, but changed their allocation method. The implementation of the ICP project has led to the implementation of SDAC almost all over Europe, through the introduction of a single common auction on the power exchanges for market participants in all countries covered by the MRC and 4M MC areas. Thanks to the ICP project, Poland was fully integrated in the European mechanism of the day-ahead market coupling.
  • 8 June 2022 – launch of the target mechanism for a single day-ahead market coupling in the Core Region on the basis of Flow-Based Allocation (FBA). FBA is a capacity determination method based on physical flows throughout the region. It allows consideration of grid technical constraints in the process of determining and allocating capacity for trade. With this method, the interdependencies between trade transactions at each market area boundary and power flows in the interconnected power system are taken into account.

Fig. 1 SDAC coverage area
Source: Market Coupling Project

SIDC

SIDC is a mechanism for a single intraday coupling with European coverage, under which market participants carry out transactions of purchase and sale of electricity up to 1 hour before the period of its physical delivery. The SIDC mechanism is based on the principle of continuous trading and implicit allocation. Bids from all market areas covered by the mechanism are matched in a simultaneous iterative process, within available capacity. The transmission capacity is made available for commercial transactions in the background of the concluded transactions. The ability to adjust a trading position at short notice is particularly important for those managing portfolios characterised by high volatility of demand and generation, such as RES.

SIDC, implemented using the XBID platform, was launched on 12 June 2018. The Polish market area has been operating under SIDC since 19 November 2019. The SIDC mechanism initially covered four Polish borders (CZ–PL, DE–PL, LT–PL, PL–SE). On 2 November 2022 the Slovak market area was added to the SIDC, allowing the PL-SK border to be included in the mechanism as well, and allowing the expiration of the temporary solution for the intraday market based on the explicit auction mechanism used for this border. The evolution of coupling individual market areas to the SIDC mechanism is shown in Figure 2 below.

Fig. 2 Evolution of coupling individual market areas to the SIDC mechanism.
Source: Market Coupling Project

Development activities regarding SDAC and SIDC

Activities currently underway in the SDAC and SIDC areas are intended to ensure proper operational performance and proper development. Our company is involved in European-wide and local initiatives through participation in steering committees and SIDC expert groups. Major development initiatives include:

  • in the SDAC area – implementation of 15-minute market products (Day-Ahead 15min MTU);
  • in the SIDC area:
    • introduction of an Intraday Auctions (IDA) mode, whereby prices will be set for individual market areas as the basis for determining the congestion rent for each border,
    • implementation of 15-minute market products (Intraday 15min MTU).
    • implementation of the FBA method as the target solution for the SIDC.

The implementation of the FBA in the SIDC will be preceded by several phases of Intraday Capacity Calculation (IDCC) implementation, whereby NTC capacity for each border will be extracted from the Flow-Based domain designated for the Intraday market.

MNA

The MNA mechanism which allows more than one energy market operator – NEMO – to operate in the Polish market area, was implemented on 9 February 2021. The intention for the activities of multiple NEMOs is to increase the competitiveness of services in the energy market. Currently, MNA operation is coordinated under the PL OPSCOM operating committee in which PSE has a leading role.

Implementation of a new market model

The Polish balancing market (BM) is currently being reformed. According to the Polish Implementation Plan document published on 20 May 2020 on the website of the Ministry of Climate, it was divided into two stages.

As of 1 January 2021, stage I of the BM reform was implemented. Comprehensive implementation of these changes in the balancing market rules required adjustment of implementing acts to the Energy Law, i.e. Regulation on detailed conditions for the operation of the power system, balancing conditions, the Transmission Grid Code and adjustment of contracts between PSE and system users. Operationalisation of the changes of stage I of the reform required adjustment of PSE's IT systems and, to a lesser extent, IT systems owned by balancing market participants. As part of stage I of the BM reform, the following events occurred:

  • Allowing active participation of the Demand Side (DSR) in the balancing market;
  • Allowing active participation of non-centrally dispatched generating units (so-called nJWCD units) in the balancing market, including wind and PV farms;
  • Allowing active participation of energy storage facilities in the balancing market;
  • Allowing the Integrated Planning Process to update offers to the maximum extent possible until the gate closure for the cross-zonal intraday market, with the assumption of monitoring of market participants for potential market abuse (use of market power);
  • Cancellation of the following system services:
    • Contingency Cold Reserve – IRZ;
    • Operational Capacity Reserve – ORM;
    • Guaranteed DSR Contingency Programme – Guaranteed IP DSR;
    • Contingency Operation – PI;
  • Changing the sign convention in the balancing market, bringing the Polish sign convention in line with the requirements of Regulation 2017/2195 (EBGL);
  • Improving valuation and settlement rules for constraint management (redispatching);
  • Revising imbalance pricing and settlement rules to improve incentives to be balanced by reducing arbitrage opportunities between wholesale and balancing markets. The revision of rules regarding arrangements to reduce arbitrage between the wholesale market and the balancing market took effect on 1 January 2022.

Along with changes to operational processes and their supporting IT systems, security requirements were implemented for newly built systems to reduce the possibility of a successful cyberattack on PSE's digital assets. There was a division of IT architecture into security zones to ensure an adequate security level of particular systems and applications used for accomplishing the TSO's tasks. New runtime environments were created for building and testing TSO's IT tools.

Works are currently underway to implement stage II of the BM reform. The goal of this stage is to meet all remaining adequate legal and regulatory requirements, make changes to support these requirements and improve the quality of the balancing market mechanism, including, but not limited to:

  • Implementing a power shortage pricing mechanism to provide incentives for short-term flexibility and send appropriate price signals to balancing energy suppliers;
  • Implementing the ability to purchase balancing capacity separately for upward and downward control, in line with EU Regulation 2019/943 and the EBGL;
  • Implementing changes in balancing market rules and processes to begin the implementation of European balancing energy platforms;
  • Implementing updated planning and settlement rules for balancing service providers to increase the efficiency of the new market rules.


The implementation of stage II of the BM reform is a challenging and difficult process. The implemented changes represent a significant interference with the existing rules of the balancing market in Poland. The scope of works in stage II of the BM reform is much broader than that of stage I of the market reform. An in-depth revision of applicable law and material changes in technical regulations are needed. The implementation of stage II of the balancing market reform will require adaptation of the business processes and IT systems in the area of commercial and technical data reporting, acquisition of balancing capacity, co-ordination planning and operation of the power system, acquisition and processing of metering and settlement data, balancing capacity and energy settlements and the conclusion and handling of contracts with market participants.

Given the experience from the implementation of stage I of the BM reform and the need to build and test appropriate IT tools both at PSE and at balancing market participants, the implementation date for stage II of the BM reform was revised compared to the date indicated in the Implementation Plan. According to the updated work plan for stage II of the BM reform, the deadline for implementing stage II of the changes is from 1 January 2023 to 31 December 2023. 

In parallel to the balancing market reform works, preparatory activities are underway for the connection to European balancing platforms: MARI, PICASSO and TERRE. Internationally speaking, PSE as the TSO, continues to cooperate with other TSOs in developing these platforms. At a national level, we are preparing the necessary IT infrastructure. Poland's connection to European balancing platforms is planned for the time after the completion of stage II of the BM reform.

Inclusion of the FNM in market mechanisms and implementation of innovations resulting from research works

For demand balancing purposes, the operator plans the operation of the national power system (NPS) and operates the balancing market (BM) in such a manner as to minimise the total costs of procurement of energy, additional start-up of generating units and procurement of balancing capacity.

As part of the implementation of stage II of the BM reform, our organisation plans to develop rules for the creation of NPS operation plans using a task that allows the optimum selection and distribution of loads among generating units, taking into account the requirements for the safety of system operation and taking into account the Full Network Model (FNM). In English-language references, this task is referred to as security-constrained unit commitment (SCUC). The design and implementation of a solution based on SCUC tools integrated with the NMMS (a module for managing the full network model) is being carried out as part of research work conducted in cooperation with PSE Innowacje (a subsidiary of PSE) and the National Centre for Nuclear Research (NCBJ);

As part of its research works to date, the NCBJ has prepared a prototype SCUC optimiser that uses the world-leading GURUBI optimiser as part of its optimisation processes, with input data (network model, shutdowns, etc.) are provided in configuration files. The target model, based on the full network model (FNM), will be integrated with the NMMS and PLANKTON (a programme for preparing coordination plans), and optimisation processes will use the GURUBI optimiser or another leading programme for solving optimisation tasks.

Acting as the energy market information operator

According to the Energy Law, PSE, as the TSO, has been entrusted with the function of energy market information operator (OIRE) since 3 July 2021. The OIRE's main tasks include managing and administering the Central System for Information of the Energy Market (CSIRE), supporting the implementation of energy market processes, obtaining energy market information and other information from users of the power system and processing information collected in the CSIRE system as well as other information to which the OIRE is entitled. The above activities will be fully performed by the OIRE from 1 July 2025, i.e. once the CSIRE system is built and launched.

The CSIRE system will be the primary tool used by the OIRE to carry out the tasks required to carry out. The system is to process energy market information and support the implementation of energy market processes by entities operating in the retail electricity market – primarily sellers and distribution system operators. The list of energy market processes covered by CSIRE support is specified in the Regulation on energy market processes issued under the Energy Law.

Building OIRE

The project to create the OIRE function and implement the CSIRE system, as carried out within PSE, aims at achieving the objectives of the retail market stakeholders and meeting the obligations indicated in the legislation. Its main objective is to ensure an efficient and secure exchange of information in the area of the retail electricity market, covering the acquisition, storage and sharing of energy market information, including metering data.

The operation of the OIRE and the functioning of the CSIRE system will additionally support the implementation of statutory rights and obligations of the individual entities operating in the retail electricity market. CSIRE will process, among other things, information on contracts functioning in the retail market and metering data from electricity meters. The processed information will be used to support processes of the energy market such as changing the electricity seller and making settlements for electricity supply to power system users. A detailed list of energy market processes covered by CSIRE support is specified in the Regulation on energy market processes issued under the Energy Law. With the launch of the system, energy market processes, including the switching of electricity sellers, will be simplified and their implementation time will be shortened.

Expected benefits of OIRE and CSIRE:

Benefits to end users, including prosumers:

  • provision of free access to their data (including metering data) related to energy delivery points,
  • facilitation and streamlining of electricity consumption processes, including switching energy retailers,
  • the ability to verify individual consumption data and electricity input to the grid,
  • ability to obtain detailed, reliable and user-friendly information concerning the use of electricity, optimisation of consumption and reduction of the cost of electricity use,
  • ability to make own energy market information, including metering data, available to selected entities, e.g. in order to receive more favourable, individually tailored commercial offers, including those concerning additional services.

Benefits to electricity market participants:

  • reducing the cost of operation for entities in the retail electricity market and lowering the barrier to entry by reducing the number of interfaces and creating a single point of access to energy market information,
  • the ability to exercise statutory rights and obligations through the efficient and secure exchange of information in the retail energy market through CSIRE,
  • unification of rules for execution of electricity market processes concerning the retail energy market within the framework of legally defined division of roles and responsibilities,
  • streamlining of reserve sales activities;
  • guarantee of data processing efficiency and sustainability in the CSIRE solution,
  • enabling the creation and development of new services by facilitating access to energy market information, including metering profiles for electricity consumption and generation,
  • transparency of retail energy market processes supported by CSIRE,
  • the possibility of obtaining energy market information on potential customers (only upon the customer's consent), e.g. for the purpose of preparing personalised offers.

Benefits to the National Power System and Power System Operators:

  • improving the efficiency of NPS resources use, among others through better matching of energy consumption to its generation, in particular from RES,
  • the ability to perform integration of retail and system market processes using metering data available in CSIRE,
  • improvement of metering data quality through the use of uniform standards and quality benchmarks,
  • the ability to use a uniform standard of aggregated metering data to meet statutory obligations.

In order to implement the provisions of the Act, our company is implementing a project for the development, implementation and deployment of the CSIRE system and is pursuing the next stages of OIRE building.

As part of the OIRE Project in 2022:

  • The public procurement procedure for “Development, implementation and deployment of the Central Energy Market Information System (CSIRE) with supporting services” was conducted. As a result of the procedure, a contract was signed with the Contractor on 27 January 2023. Under this contract, stage I – Detailed Analysis and Preparation of Project Documentation – was commenced. The planned completion date for stage I is 6 months from the signing of the contract.
  • The TSO, in performing the OIRE functions, developed, subjected to public consultation and submitted to the ERO President for approval a draft of a separate part of the Transmission Grid Code concerning the detailed manner of CSIRE operation and cooperation of the TSO, acting as the OIRE, with power system users and other entities obliged or entitled to use the CSIRE system (TGC-OIRE). In the course of the administrative procedure, PSE amended the draft TGC-OIRE and supplemented the Code with provisions on the Initial Migration of Energy Market Information. The President of ERO closed the evidence procedure on 31 March 2023, and approved the TGC-OIRE on 6 April 2023, setting its effective date as 7 April 2023.
  • Intensive works were carried out on the development of successive versions of the CSIRE Standards for Information Exchange (SWI), attached as an appendix to the TGC-OIRE, and the Technical Standards for Business Communication (TSKB). The SWI was the subject of an administrative procedure to approve the TGC-OIRE. TSKBs, developed in accordance with the requirements of the TGC-OIRE, were subject to consultation with CSIRE stakeholders and expanded to include a number of provisions that had been originally included in SWI. Subsequent versions of the draft TSKB and consultation reports were published in 2022. TSKB in line with the approved SWI were published on 4 April 2023.
  • The tender process for “Provision of services of data migration to the CSIRE system” was completed and a contract with the selected Contractor was signed on 24 June 2022. In addition, the following elements of the Data Migration to CSIRE Service were implemented:
    • a detailed concept for the initial data migration to the CSIRE system was developed,
    • the CSIRE Migration Data Scope and CSIRE Initial Data Migration File Specification were developed and made available,
    • in April 2023, the Data Migration Tool was made available to support entities required to provide CSIRE initial data to the OIRE and to build the CSIRE initial batch;
  • OIRE's internal processes, i.e., processes implemented within the organisational structures of the Energy Market Information Operator, were prepared. They do not include the energy market processes specified in the SWI as their implementation is performed automatically using the CSIRE system. Within the framework of internal processes, activities are carried out to supervise and monitor the correct operation of the energy market processes.
  • the concept of implementing new organisational and IT solutions in the form of the OIRE Support System was created to ensure an effective implementation of the tasks. The system is designed to support the OIRE in the implementation of internal processes and tasks arising from statutory provisions and implementing regulations, including the handling of various inquiries and requests from Energy Market Stakeholders regarding the operation of the CSIRE system, as well as other tasks carried out by the OIRE. SWOIRE will achieve high quality in meeting eligible stakeholders’ needs.

Implementation of the outage planning system

In 2022, our organisation completed another stage of works including the design and implementation of the Outage Management System (OMS-W), to the extent that it enables:

  • registering and managing groups of needs associated with outage needs, outage groups associated with outages, and outage cards associated with outages or outage groups,
  • the use of registered facilities to create other facilities based on them, including the creation of outages based on outage needs, outage groups based on groups of needs, and outage cards based on outages or outage groups.

The system for managing the unavailability of elements of the OMS-W power system will be implemented on a modern IT platform. It will use the NPS element data contained in the RBES database. Entities to directly report the needed outages of NPS elements will be: OU in the Operations Department, the Central Investment Unit, and business partners (e.g., DSOs). At the PSE level, the OMS-W will be the next step towards future integration of the corporation's outage planning processes (with the AM system). Ultimately, the system will be equipped with a support module for the Shift Management sub-process (integrated with the OMS-R and OMS-OS system) and will have an additional module allowing for the creation of operating systems assigned to individual outage requests in the NPS.

The OMS-W system is intended to replace the “SEW Rejestr” system currently used for outage planning, developed more than 25 years ago, as well as to partially replace the DYSTAN system in scope of registering emergency and operative outages, topological changes in the NPS, and electricity consumer constraints resulting from outages of transmission grid elements and weather events in the MV network.

The next phase of works has also begun, with the goal of implementing the outage planning process in the OMS-W system (considering the roles assigned in the process), streamlining the registering procedure and improving facility management in the system.

Definition of OPC process with specification of resources, parallel execution in PSE

In 2022, PSE was further developing IT tools towards the target functionality to enable Regional Security Coordinators (RSCs) and Transmission System Operators to carry out Outage Planning Coordination (OPC) on a weekly basis and Short-Term Adequacy (STA) assessment in a weekly horizon.

The Outage Planning Coordination (OPC) and Short-Term Adequacy (STA) are two of the five mandatory services provided by Regional Security Coordinators (RSCs) and Transmission System Operators for electricity under the European Commission regulation establishing guidelines for the operation of the electricity transmission system. The services are intended to increase the operational security of Europe's power system.

Definition of CC process with specification of resources, parallel execution in PSE

In accordance with Commission Regulation (EU) 2015/1222 of 24 July 2015 establishing a guideline on capacity allocation and congestion management and Regulation (EC) 714/2009, a new methodology (FB) has been adopted for the designation of parallel exchange capacity in the Day Ahead horizon.

In 2022, by 7 June, testing of the new capacity calculation methodology was underway, as well as work to develop the tools needed for the production deployment of the methodology on both the PSE and RSC sides. As of 8 June 2022, there was production deployment of day-ahead capacity calculation process in the Core region. In 2022, development of IT tools to support the precoupling process and Capacity Calculation Analysis tools to support the Day-ahead Flow-based Capacity Calculation process in the CORE region continued.

In addition, the following implementation works have begun on the intraday capacity calculation process:

  • the basis phase for the implementation of an IT solution supporting the precoupling phase in the intraday Flow Based Market Coupling task has been completed,
  • an evolutionary development phase was initiated for the implementation of an IT solution supporting the intraday precoupling phase (phase 1) for the Flow Based Market Coupling task,
  • an evolutionary development phase was initiated in the creation and implementation of the core functionality of the Capacity Calculation Analysis tool supporting the Intraday Flow-based Capacity Calculation process in the CORE region.

Definition of CSA process with specification of resources, parallel execution in PSE

According to the following Commission Regulations (EU):

  • 2017/1485 Article 75 and Article 76(1) of 2 August 2017 establishing guidelines for coordinated security analyses;
  • 2015/1222 Article 35(1) and Article 74 of 24 July 2015 establishing guidelines for capacity allocation and congestion management;

new methodologies were adopted for conducting security analyses and cost-sharing for activating remedial actions: ROSC and CS RDCT. They are intended to increase the operational security of Europe's power system.

In 2022, works were carried out to prepare IT projects for the implementation of the tools needed for the productive deployment of the methodology on both the PSE and RSC sides. As a result of the EU tendering procedure, contractors were selected for the task of developing a central tool for the CSA process in the CORE region. The IT project works will be carried out within the framework of the CorNet project (RSC TSCNET and RSC Coreso) with the support of TSOs from the CORE region.

As part of the preparation for the implementation of the CSA process, a business task has been completed by PSE to develop a vision to support the security analyses processes and cost-sharing for activating countermeasures with a feasibility study.

Implementation of investment tasks resulting from PRSP

PSE’s capital expenditures for investment tasks in 2022 amounted to around PLN 1.3 billion. The most important tasks completed in that year were:

  • Construction of 400 kV Krajnik – Baczyna line excluding cable entry to Baczyna substation (the line temporarily operates at 220 kV between Krajnik and Gorzów);
  • Cable entry of 220 kV Miłosna – Mory line to 220/110 kV Praga (Żerań) substation;
  • Modernisation of the Rogowiec – Pabianice 220 kV line;
  • Modernisation of the 220 kV Morzyczyn – Recław line purchased from ENEA Operator Sp. z o.o.;
  • Replacement of the OPGW lightning protection wire on the Połaniec – Rzeszów 400 kV line;
  • Replacement of the OPGW lightning protection wire on the following 220 kV lines: Kozienice – Puławy, Pątnów – Konin, Adamów – Pabianice and Podolszyce – Pątnów;
  • Replacement of ConTune type active reactors including associated instrumentation with passive filters in the Słupsk DC substation;
  • Modernisation of transformer unit equipment at the 400/220/110 kV Plewiska substation.

Implementation of a tool for probabilistic analysis in the process of planning NPS development

The fundamental objective of transmission grid development planning is to develop such a schedule for the implementation of investment activities that, when completed, will allow the NPS to continue to operate in a reliable and economically justified manner. The direct effect of development activities is to ensure a balanced development of the transmission infrastructure which, on the one hand, will increase the efficiency of the market by reducing the impact of technical constraints in the transmission grid and, on the other hand, will not lead to an overinvestment in the transmission infrastructure and the creation of unjustified financial burdens for system users.

The extent of investment in transmission infrastructure depends on a number of external factors, among which are the demand side, the supply side, as well as economic and socio-political conditions. Some of these factors are random by their nature. In the current realities of power system operation, there is an increasing demand to include probabilistic elements in the grid development planning process as a good representation of the environment. Probabilistic analyses (i.e. those that take into account elements of uncertainty in the occurrence of events) on the one hand better reflect reality, but on the other hand are characterised by greater complexity and time-consuming calculations. For this reason, PSE saw the need to develop a dedicated tool to effectively incorporate probabilistic elements into the transmission grid development planning process. This led to the development of a functional concept and the subsequent development of the aPRSP IT tool. That tool is designed to assist planners in selecting cost-effective schedules for implementing grid investments while taking into account random factors affecting power system operation.

The aPRSP tool works in two stages. The first stage automatically identifies so-called candidates, i.e. potential investments involving the construction of new or the modernisation of existing grid infrastructure elements. At this stage, the capital expenditure and potential market returns from the construction of a grid element are compared in a simplified manner. At the second stage, the resulting list of candidates is the input to the actual optimisation process. The process is intended to determine the time and task schedule for the implementation of investment activities that minimise the total investment costs and the costs of market operations, while ensuring that the criteria for the safety of system operation are met.

Construction of the electricity quality management system in the NPS

The purpose of this course of action is to implement solutions that will serve to ensure that PSE can provide the required electricity quality (JEE) parameters and, if necessary, provide the information necessary to determine the source of JEE disturbances and implement corrective measures.

The main objective of the course of action, i.e. the construction of a electricity quality management system in the NPS, will be achieved through the implementation of the following specific tasks:

  • providing electricity quality monitoring systems (SMJEE) for all points of electricity delivery to consumers and all substations of the TSO – so that monitoring covers each voltage level in at least one measuring point;
  • implementation of the master electricity quality measurement and billing system (SPRJEE), which integrates measurement data from SMJEE systems and is used to process, report and make available JEE indicators and information on JEE parameters to the CSIRE system.

The SMJEE system currently in place consists of 169 metering devices (analysers) and covers about 39 percent of the required metering points. Implementation of the investment task entitled Extension of the electricity quality monitoring system will enable electricity quality monitoring to be carried out at all transmission grid facilities.

As part of this task, 2 SMJEE systems are being implemented within separate packages, each covering 130 metering points (260 metering points in total). Upon completion of the task, monitoring of the electricity quality parameters will be carried out at a total of 429 metering points. The currently implemented SMJEE systems will meet very high IT security standards and will implement a number of additional functionalities in line with the standards applicable at the TSO.
In 2021, following a tendering procedure, contracts were signed with two contractors and the works planned for the next 3 years began. As part of stage 1 of the task, contractors developed and agreed on detailed work schedules. In 2022, in stage 2, contractors developed and agreed on detailed design documentation for equipment installed at 104 substations. As part of stage 3, contractors began developing and agreeing on detailed design documentation for SMJEE IT systems, together with the pilot metering equipment system at a total of 4 substations.
The SPRJEE system will make it possible to identify predominant sources of disturbance, determine the parties' contribution to their introduction, and determine discounts, and in the future - if regulated by law - also penalties for exceeding the level of permissible individual parameters.

Works on this task are scheduled to start in 2023, once the IT part of the SMJEE system has been implemented in the production version as part of the SMJEE system extension.
Electricity quality management in the target system will be based on the following key systems:

  • SMJEE – performing data reading from the metering devices installed in the transmission grid facilities and serving for their verification,
  • SPRJEE - performing the integration of data from the SMJEE systems and responsible for processing, reporting, and sharing JEE indicators and JEE parameter information with the CSIRE system.

Implementing an electricity quality management system in the NPS will bring benefits and opportunities such as:

  • verification of compliance of power quality parameters with the requirements of the system regulation and other applicable regulations at all facilities,
  • verification of relevance of applications, claims and notifications of end users, DSO and other NPS users concerning non-compliance with electricity quality parameters, including those related to discounts and grid events,
  • identification and prevention of new sources of disturbances within the completed connections of RES generators and customers to the transmission grid,
  • issuing opinions on wind farm impact test reports on the power system in terms of electricity quality parameters,
  • identification of causes of disturbances for electricity quality parameters and identification of the entity responsible for their introduction,
  • using the collected measurement data to determine corrective measures and eliminate identified disturbances,
  • collecting information on the electricity quality status to determine appropriate requirements for future connections,
  • provision of data and recorded events for the evaluation of operation of the equipment in substations and switching operations within the scope of the work of the Commission for Investigation of Disturbances and evaluation of their impact on the plants of entities connected to the transmission system,
  • evaluation of applied control automation systems operation - analysis of problems concerning the maintenance of voltage levels and voltage imbalance in the power system.

Cybersecurity

Cybersecurity plays a key role in PSE's business strategy due to the need to ensure the security of the Polish NPS. One of the initiatives identified as strategic in the PSE Strategy was to repel external threats. Activities relating to cybersecurity are continued as part of the ongoing projects, tasks and initiatives aimed at improving security. This includes, i.a., managing the risk of losing the ability to control and manage the NPS operation associated with cyber attacks on the IT/OT systems of the TSO and DSOs, generators, trading companies, exchanges or industrial consumers.

Cybersecurity-related activities undertaken by our organisation are a response to the growing threats in this area related to the increasing use of new technologies and communication methods, as well as the increase in threats from the company's and the country's external environment. Recent years have seen an increase in threats accompanying new solutions and an increase in targeted attacks using dedicated tools to carry them out, especially on critical infrastructure.

By continuing the actions arising from the ongoing cybersecurity strategy, PSE has identified possible situation development directions, so that the portfolio of actions needed to manage the defined risks could be developed adequately. The growing number of cyber threats and specialised attack tools have confirmed the validity of the assumptions and the need to continue the efforts in this area. The security issue is an important element of our company's next strategic directions.

ICT security and cyber threat area management – approaches and projects

The ICT Department continued its efforts to ensure ICT security during the period covered by this report. The basis for all the activities was the interdependent cybersecurity of our company, our market partners in Poland and abroad, as well as capital group entities and subcontractors, and the aggregate impact of cybersecurity on the stability of NPS operation. The pillar of the activities undertaken by us was always ICT security, i.e. business continuity understood as availability and resilience of systems as well as integrity and confidentiality of data in IT solutions.

Priority areas of ongoing projects:

  • Network segmentation – projects aimed at ensuring adequate separation of resources with different levels of vulnerability, including ICT systems at the substations and central critical systems – both through actions at the level of technological standards (e.g. EAZ, SSiN), ICT architecture, high-level technical projects for rebuilding ICT network segmentation, appropriate shaping of business projects, and at the level of infrastructure itself;
  • Workstation – projects that provide secure work tools to maintain performance and functionality according to business needs, with malware protection and control of permissions and data flow;
  • Internet connection – our external perimeter providing the PSE's employees and visitors, subject to rules derived from rights separation and management, with functional and unified access to the Internet (including via a secure WiFi network, implemented at both the company's head office and at the remote organisational units) and adequate, secure remote access;
  • Detection and response – threat monitoring conducted 7x24h by a dedicated Security Operations Centre (SOC) team to ensure ongoing ICT security, including actions and remedial actions for both IT and OT network incidents. Another support line is the Computer Emergency Response Team (CERT), which has operated since 2016 and holds relevant certifications confirming that it meets the highest standards of operation. An important element of this direction is raising employees' awareness, publishing alerts and warnings about threats, reporting information about incidents and cooperation with external entities (including CERT NASK, CERT.GOV.PL, RCB) in the area of ICT security.

As part of the measures undertaken we adapt organisational and technical solutions to legal requirements (Act on the National Cybersecurity System) and current ICT security standards, as well as industry standards.

Collaboration

In cooperation with our stakeholders, we constantly work to ensure an appropriate level of collective ICT security and strategic harmonisation of efforts. We also cooperate closely with entities responsible for the cybersecurity of the power sector – both domestically and internationally. To deepen this cooperation and to spread awareness of cybersecurity threats and approaches to combat them, we actively participate (in 2022 mainly remotely) in numerous conferences and seminars as well as national and international sector cooperation forums. As part of ICT security promotion and enhancement of cooperation in the energy sector, since 2018 we have been organizing PolEx training courses and the Cybersecurities Conference for the Energy Sector (CC4ES) with the participation of national and international industry experts.

A key forum for international cooperation is the European Network of Transmission System Operators for Electricity – ENTSO-E. PSE representatives are involved there in projects aimed at ensuring energy security in Europe – developing new solutions or concepts and rules for critical infrastructure in various working and project groups. Below are some of the groups in which PSE representatives participate:

  • ICTC Information and Communication Technologies Committee - a committee that coordinates all issues associated with ICT and ICT security in ENTSO-E, with a particular focus on common ICT tools used by the electricity transmission system operator community,
  • Steering groups supporting ICTC, responsible for strategy issues, providing ICT services, and ICT security,
  • Cyber Security Working Group – an ICTC working group that deals with ICT security issues. Its task is to monitor information about threats in the world and to cooperate in projects where it is necessary to take care of safety and shape rules for safe operation of systems and operators.
  • A working group of ENTSO-E experts and a similar association of European Distribution System Operators (E-DSO) which is responsible for development and implementation of the Network Code for Cyber Security regulations,
  • Enterprise Architecture Working Group - an ICTC working group whose mission is to ensure proper coordination, consistency and decision support on architecture issues within the framework of operator community collaboration,
  • CIM (Common Information Model) Working Group – an ICTC working group that has developed and maintains standards for electronic exchange of information in the European electricity market.

PSE members also join the work of other groups, supporting them with their competence in the areas of IT interconnection management and designing future solutions that will be created to meet the growing needs of operator systems and the market. As part of these works, concepts are created for new connections for data exchange between transmission system operators and existing connections are developed. Cooperation in these groups has a significant impact on the security and stability of the power systems in Europe. It also helps to improve employee competence and support partners in this process and fosters the exchange of knowledge and experience. Thanks to this activity, our employees have an impact on the formation of global standards in the field of IT security of industrial systems, as well as significantly improve their competence in this area. It also helps to more easily adapt the ICT environment to meet growing security requirements and improve resilience to threats.

Digitalisation and virtualisation of the office

The pandemic caused by SARS-CoV-2 (COVID-19) corona virus has helped to accelerate the digitalisation of PSE processes. In the area of the strategic course of action the “digitalisation and virtualisation of the office”, activities are implemented, as a result of which the traditional workflows are replaced by electronic ones. The conventional signature has been replaced by electronic approval or e-signature, and the records are distributed through electronic channels. The digitalisation of processes to date has caused significant reduction in paper and purchase of consumables. Saving paper, using minimum necessary amount of printer toners and ink, and the use of multifunctional devices (printers, faxes, copiers) not only add to the financial benefits for PSE (energy savings, reduced waste generation), but also minimise the effect on the natural environment.

Coherent security system

The substations are equipped with Technical Protection Systems (SOT) executed in accordance with the Technical Protection System Standard in PSE facilities in force at the date of the project. Technical Protection Systems are an element of personal and property security implemented in the form of technical security. In 2022, our company carried out the day-to-day operation of SOT systems and scheduled maintenance to the extent and on the dates stipulated in the service agreements and using its own execution capabilities. Documentation was prepared as necessary to launch an investment task aimed at comprehensive implementation of the Technical Protection Systems (SOT) by 2029, and Technical Protection System submissions were completed on an ongoing basis for investment tasks carried out by other organisational units. The Technical Protection Systems are further developed in line with the PSE strategy.

Implementation of independent aviation operations

PSE owns three Robinson R66 helicopters, the parameters of which perfectly match the needs of our company, and additionally met the conditions for low purchase and operating costs. Since 5 February 2021, we have the permit PL.SPO.058-HR issued by the President of the Civil Aviation Authority to carry out commercial high-risk specialized operations. This permit allows to patrol substations, power poles and lines, gas pipelines, other pipelines, and to fly for site inspection and for strategic security patrols of the power infrastructure. We employ trained, experienced pilots and task specialists. Helicopters and crews are based in 3 locations around the country, allowing for quick access to all of the power lines. The aerial operations we have carried out have confirmed the high efficiency and speed of transmission infrastructure inspections.

Selling the infrastructure overflights

Market analysis indicates that there is demand from other concerns and companies, including energy and raw material distributors and suppliers, to use aircrafts to monitor the infrastructure condition. PSE has the organisational and infrastructural potential to provide aerial monitoring services of transmission and distribution infrastructure facilities, including critical infrastructure belonging to other entities.

In February 2022, our company entered into an agreement with OGP GAZ-SYSTEM, under which PSE has provided visual overflight services to GAZ-SYSTEM, Poznań branch, since March 2022. By the end of March this year, PSE carried out 8 full overflights of gas pipelines in the Poznań branch, with a total flight time of over 200 hours and over 70 flying days. We are organisationally prepared to expand both the volume and scope of the provision of external aviation services.

Changing the tariffing process

In order to meet the dynamic changes in the functioning of the electricity market and the expectations of the stakeholders, our company undertakes a number of actions aimed at optimizing the process of planning and acquiring input data necessary for the development and approval of tariffs. In order to balance the interests of consumers and power companies, a revenue adjustment account mechanism has been implemented. Work is currently underway to implement a cost regulatory account mechanism.

Implement a revenue and expense adjustment account

The first balancing market reform changes were implemented on 1 January 2021. They were correlated with measures enabling protection of consumers against excessive or abrupt increases of fee rates in subsequent tariffs, while mitigating the risks associated with deviations of the actual revenues and costs from the planned ones, included in the calculation of tariffs approved by the President of ERO.

As part of the cooperation with DSOs and public administration, as early as in 2020, we developed and agreed principles for the functioning of the mechanism of the so-called revenue adjustment account, covering adjusted revenues of companies providing electricity transmission and distribution services. The mechanism consists in recovering in subsequent years the uncollected revenues or giving back the surplus of revenues from the application of tariff rates in relation to the planned values, while maintaining the specified maximum level of variability of tariff rates in subsequent years. The agreed provisions regarding the revenue adjustment account were implemented in the Regulation of the Minister of Climate and Environment of 13 November, 2020 amending the Regulation on the detailed rules for shaping and calculating tariffs and settlements in electricity trade.

As a next step, PSE developed the concept of a so-called cost adjustment account model. In 2021, our company submitted to the Energy Regulatory Office a proposed solution for the cost adjustment account for the quality charge. Works were continued in 2022, and further subject-matter consultations with ERO were scheduled for 2023.

Implementation of risk preparedness

Regardless of the ongoing activities undertaken in the company as part of the risk management, PSE is engaged in tasks aimed at proper and timely implementation of the provisions of Regulation (EU) 2019/941 of the European Parliament and of the Council of 5 June 2019 on emergency preparedness in the electricity sector and repealing Directive 2005/89/EC.

The purpose of the aforementioned regulations is to implement measures aimed at preventing electricity crises, preparing for them and managing them in a transparent, joint and several manner and with full regard to the requirements of a competitive European electricity market.

PSE supported the Ministry of Climate and Environment, acting as the competent authority, in the works on the KPG. The plan was published on 5 January 2022.

This document defines general policies and measures to prevent, prepare for and mitigate electricity crises. It refers to regional and national electricity crisis scenarios, including in particular 28 out of 31 regional electricity crisis scenarios (SRKEE) provided by ENTSO-E and considered relevant (including possible) under Polish conditions.

Improvement of the investment project life cycle and its extension to the EHV infrastructure life cycle

The initiative aims to improve and optimise an investment project life cycle and adjust to the existing investment and investment-related processes that support investment project implementation. As part of the project works, existing processes were clarified to include project management processes, i.e. scheduling, budgeting, risk management, change management, and claims management processes, among others. It was also important to include life cycle processes and investor supply management. In addition, a list of direct and indirect products created and delivered in the various phases and stages of the life cycle was also developed, with precise assignment of responsibilities for their implementation. The procedure update included also provisions for transferring fixed assets to assets, specifying the frequency of updating the estimated contract value, and updating the approach to changing the schedule and base budget.

Implementation of a financial support model for investment project real estate acquisition

The aim of the project was to identify practices used by other TSOs in acquisition of legal titles to real estate using capital instruments and to identify substitute tools, if any, with recommendations for use in the PSE. The project works included a review of best market practices aggregated by NGOs specialised in electric power issues, as well as a review of the practices of selected TSOs. The analysis did not identify an instrument to support the acquisition of legal titles to real estate with an equity component that could be a satisfactory solution for stakeholders.

Total SAP replacement

The SAP Systems Transformation program has been launched in our organization. Thanks to it, the company has initiated a project and works are underway to transform the existing solution to the SAP S/4HANA System. The aim of the programme is to optimise business processes by modernising, modifying and developing the currently operating SAP environment applications. The chosen course of action ensures the evolutionary development of SAP systems at PSE, resulting from advances in information technology and the development of the organisation's existing competences. The fundamental objective of the transformation is to simplify business processes and make the widest possible use of system (IT) solutions.

As part of the transformation programme, an upgrade and update of the SAP systems will be carried out with a view to standardise and optimise processes on a company-wide level. State-of-the-art system solutions will cover financial accounting and tax processes, so that all transactions are recorded and accounted for within a single IT solution. This will reduce the manual activities associated with duplicated data entry, as well as reduce financial risks and enhance the ability to efficiently acquire data and perform management analysis.

The SAP System Transformation is also an opportunity to implement a modern IT solution to allow further works in the area of transferring manual, paper-based processes to digital solutions. The programme provides the company with new opportunities relating to managing data analytics for management accounting and analysis.

Business strategy for 2020-2030

PSE's strategy (2-year horizon) ─ Supplement

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