OUR STRATEGYPSE's strategy (2-year horizon) ─ Supplement

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

In an organisation as significant as ours, business continuity, meaning a secure and uninterrupted supply of electricity to all consumers now and in the future, is a priority. The COVID-19 pandemic and its consequences have led our organisation to reformulate its priorities for the coming years. This resulted in a supplement to the PSE Strategy for 2020–2022 with 6 challenges and 8 strategic objectives.

Strategic directions

Adequate integration with RSCs / RCCs

The deepening regional integration of electricity systems is prompting PSE to intensify its efforts to model mutual interactions with its partners accordingly. PSE's activities are geared towards regionalisation of key operator processes and transferring selected ones to Regional Coordination Centres (RCCs), which will start operating on 1 July, 2022, replacing the Regional Safety Coordinators that have been in place up to now. TSCNET Services GmbH will assume the function of the Regional Coordination Centre to which PSE will belong. The company has been adapted organisationally to fulfil its new function. PSE will seek to systematically strengthen RCCs while developing tools to verify actions taken at regional level.

Digitalisation and virtualisation of the office

The pandemic caused by corona virus (COVID-19) has helped to accelerate the digitisation 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 The conventional signature has been replaced by electronic approval or e-signature, and the records are distributed through electronic channels.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 digitisation of processes to date has caused significant reduction in paper and purchase of consumables. During the pandemic period, the amount of printer paper used was reduced by as much as around 70%. Saving paper, using less printer toner and ink, and reducing the use of multifunctional devices (printers, faxes, copiers) not only add to the financial benefits for PSE (energy savings, reduced waste generation), but also has a beneficial effect on the surrounding environment.

Adaptation of the balancing market security system to new conditions

In terms of adapting the balancing market hedging system to the new conditions, the IT tool currently implemented in the SAP system needs to be adapted. The new tool, to be adapted to regulatory changes, will be developed and implemented as part of the project entitled “Total SAP replacement – i.e. SAP transformation to SAP 4Hana".

Maximising the scope implementation of European market regulations (CEP, Network Codes)

European legal regulations impose a number of obligations on the Transmission System Operators (TSOs) and Market Operators (NEMOs) to implement electricity market mechanisms and power system management. Regulations concerning the energy market and system management are contained both in the legal acts that form part of the Clean Energy Package (CEP) – Regulation 2019/943 on the internal market in electricity and Directive 2019/944 on common rules for the internal market for electricity – and in the subordinate acts, the so-called Network Codes, developed on the basis of Regulation 714/2009 on conditions for access to the network for cross-border exchanges in energy.

The aforementioned legal regulations set out the general requirements for the mechanisms to be implemented, which are then further specified in detailed methodologies developed by TSOs or NEMOs. Implementation of regulations and methodologies takes place through dedicated international implementation projects led by TSOs or NEMOs. PSE staff are actively involved in implementation projects that are important to our organisation, to ensure that they are carried out in line with regulatory requirements and the energy market needs. PSE also carries out internal implementation projects to ensure alignment with the requirements of the European market regulations.

Correct implementation of the new market mechanisms will increase the efficiency of energy exchange, resulting in lower energy costs on a European scale and providing benefits to consumers. Properly designed and implemented market mechanisms will also enhance security of energy supply by allowing access to a wider pool of resources and increasing the reliability of market mechanisms. A properly implemented European market should also reduce the need for TSOs to use contingency measures, as by properly coordinating the transmission capacity allocation process, the results of the energy market should better reflect the physical conditions of the transmission system.

Conducting the procedure and conclusion of the contract for the SCADA system

On 29 September 2022, a contract was signed for an upgrade of the application software of the SCADA and EMS subsystems of the currently used DYSTER system, including the transfer of the so-called extensions. The subject of the contract will be carried out on PSE's hardware and software infrastructure. The project involves carrying out the system upgrade within 24 months. The scope of the contract includes the provision of a post-warranty service for a period of 5 years. SCADA is the primary IT system used to conduct electricity transmission activities, perform TSO tasks and manage the operation of the NPS in real time. IT supports the dispatching services of PSE by enabling effective performance of tasks in the area of the NPS operation, including monitoring of the system operation status, identification of threats to the NPS operation, remote control of network facilities, exchange of real-time data with other transmission and distribution system operators.

The modernisation of our company's SCADA system is due, among other things, to the need to implement IT security requirements, to meet legal obligations under European regulations for the electricity sector, and due to the physical depletion of the hardware and system infrastructure currently used by the system.

The new system will be equipped with advanced EMS computational tools, performing tasks related to the execution of NPS safety analyses in real time and in the study mode based on the received telemetric measurements. The new SCADA/EMS system will meet high ICT security requirements and its architecture will be in line with the segmentation project underway at PSE.

Implement a revenue and expense adjustment account

From 1 January, 2021, the first balancing market reform changes were implemented. 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, in 2020, principles were developed 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 obtained 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 have been 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. Subject-matter consultations with the ERO have been scheduled for 2022.

Implementing Interim Market Coupling and Core Flow-Based Market Coupling mechanism

Interim Market Coupling (Interim MC)

The aim of the Interim MC project was to couple the electricity markets of Poland and the 4MMC countries (Czech Republic, Hungary, Romania, and Slovakia) with the Europe's largest MRC market. The coupling was to take place by introduction of implicit capacity allocation based on the NTC method at six borders (PL-DE, PL-CZ, PL-SK, CZ-DE, CZ-AT, HU-AT). Thus, the completion of the project has led to the implementation of the Single Day-Ahead Coupling (SDAC) in this area.

Interim MC was launched operationally on 17 June, 2021, as an interim solution towards implementation of the Core Flow-Based Market Coupling.

Core Flow-Based Market Coupling (Core FBMC)

The aim of the DA Core FBMC project is to implement a target solution for SDAC in the Core Region, i.e. to introduce implicit transmission capacity allocation based on the Flow-Based Allocation (FBA) method. The FBA mechanism allows for market coupling in a way that is based on electricity distribution. The Core Region (CCR Core) is the Capacity Calculation Region (CCR) covering the borders of the market areas between the following EU Member States: Austria, Belgium, Croatia, Czech Republic, France, Germany, Hungary, Luxembourg, Netherlands, Poland, Romania, Slovakia and Slovenia. The operational launch of the DA Core FBMC took place on 8 June, 2022.

Implementing coordinated security analyses and a cost-sharing mechanism for countermeasures

Core Regional Operational Security Coordination (Core ROSC) and Core Cost Sharing (Core CS)

The aim of the Core ROSC and Core CS projects is to implement a process in the Core region for carrying out security analyses of network operation and activating countermeasures agreed through this process. In 2021, the Core Region TSOs, together with representatives of the CORNET project team (Coreso, TSCNET), started work on the business requirements for the implementation of the ROSC and CS processes, on the basis of which a tender procedure will be carried out in 2022 for the construction of a central tool to support these processes. The aim of the tender will be to select contractors for the construction of an IT platform (ROSC and CS) and a module for determining countermeasures in the best way (RAO). The implementation work has been divided into two stages, which include a day-ahead horizon (ROSC v1) and a intra-day horizon (ROSC v2). According to the work schedule, stage 1 will be completed by Q2 2024 and phase 2 by Q3 2025.

Implementation of the mechanism to obtain flexibility from the distribution network

Member States were required to implement a mechanism for procuring flexibility services from the distribution network and frequency-independent services under the provisions of the Directive of the European Parliament and of the Council (EU) of June 5, 2019 concerning common rules for the internal market for electricity and amending Directive 2012/27/EU (hereinafter: Directive 2019/944). The implementation of the mechanism is aimed, among other things, at reducing the risk of blackout, thanks to the increased participation of system users connected to the distribution network in the provision of system services and balancing of the NPS, system operators will have a wider range of options to ensure secure operation of the power system.

In 2021, comments were prepared on the proposal to implement Directive 2019/944 (draft amendment to Law No. UC74) proposed by the Ministry of Climate and Environment. At the same time, as part of the implementation of works related to broadly defined flexibility services, PSE participates in a research and development project, which received EU funding. The objective of the project is to formulate and execute a concept for the completion of works, with a particular focus on the Polish demonstrator, i.e. to define, test and demonstrate the procurement of services from flexibility sources that can be used in the future to support network management by system operators.

The OneNet project started on 1 October, 2020 and will run until 30 September, 2023. Our company has identified products of their interest in terms of test purchasing from entities connected to the MV and LV distribution networks. An online platform is being built to enable test purchases of services.

Implementing a full network model management module (NMMS)

The Network Model Management System (NMMS) is a CIM-compliant system that allows the creation and verification of different time variants of the network model, indicating the duration of changes, and the generation of a production model based on accepted changes. The system is equipped with mechanisms to check the correctness and consistency of the network models created.

NMMS will be the primary system for creating, maintaining and developing the network model. It will feed data into the individual coordination planning and operation processes and the basic dispatching applications

Stage I of the work, completed on 21 February, 2022, involved the technical design and installation of the base system. FAT tests were also carried out with positive results. Work is currently underway to implement extensions to the NMMS System (Stage II). A programme of training and workshops for system users is also being implemented. At the same time, work is underway to install NMMS in PSE's IT systems – scheduled for completion in May 2022.

Ensuring an adequate level of reactive power compensation

One of the elements associated with the operation of RES, including offshore wind farms, is the balancing of the power system under conditions of high RES generation. The reduction in the number of operating centrally dispatched generating units of the JWCDc type and the associated change in the allocation of active power generation sources simultaneously results in a reduction in reactive power resources in various parts of the National Power System (NPS). These resources cannot be compensated by the operation of reactive power sources coupled with offshore farms, as these are concentrated in a small and remote area. Both the phenomenon of a reduction in reactive power resources after the shutdown of conventional generators and the increase in reactive power losses lead to a deterioration in voltage stability under high load conditions in the NPS. Therefore, the issue of ensuring adequate reactive power control resources is very important to secure the operation of the NPS with large RES generation.

This issue was addressed in a research paper entitled. "The concept of linking the NPS with offshore wind farms in a long-term perspective". The research paper, carried out by the Institute of Electrical Power Engineering in Gdansk, will be completed in Q2 2022. The analyses were divided into three stages:

  1. Analysis for steady states (completed).
  2. Analysis for transients (completed).
  3. Development analyses for s2030+ (in progress).

Ensuring adequate European market and system methodologies

European energy regulations in many cases provide for the clarification of specific solutions by means of methodologies created by TSOs and NEMOs, and the approval of National Regulatory Authorities (NRA) or the European Agency for the Cooperation of Regulators (ACER). Since, in many cases, regulations are created at a very general level, these are the methodologies that determine the actual shape and quality of many power engineering solutions. Properly prepared methodologies are, therefore, crucial for market processes and other TSO activities; they have a direct impact on the quality of solutions, costs for individual entities and countries, and security of electricity supply. Therefore, PSE's active participation in the preparation of the methodologies and their approval process by the relevant regulatory authorities is crucial for the quality of the market and power system solutions implemented.     

PSE employees take an active part in the work of teams developing methodologies at the European and regional level to ensure the high quality of the solutions developed and, therefore, the efficient operation of the market and the power system at the national and European level.

Ensuring adequate stock levels

The main task of the Operation Department's (DE) storage management is to ensure that adequate storage reserves are available in the event of an emergency. In order to determine the quantities of each type of devices and materials, the DE has developed a normative document. This document, which is updated periodically, indicates which stocks are sensitive to PSE in the event of an emergency.

The Operation Department’s stock management is the responsibility of the Devices and Materials Reserve Operator (ORUiM), which, through its ongoing activities, fulfils its obligation to keep DE stock at an appropriate level. The stock is replenished through targeted purchases made by ORUiM, devices and materials from investment tasks (new, constituting a reserve in accordance with the provisions of the ToR), and devices and materials from dismantling as part of operational, repair and modernisation tasks.

In pursuit of the objective of ensuring adequate stock levels, ORUiM prepares tender procedures that result in contracts for the supply of devices and materials indicated in the normative document. As the Operation Department is unable to predict when a failure will occur and what devices will be affected, contracts are usually for a period of three years where possible, allowing purchases to be made based on DE's actual needs. Where such contracts are not available, one-off purchases are made to replenish stock. A timetable of procurement procedures has been developed for the period 2022–2030.

Liquidity risk management

As part of liquidity risk management, a systematic report was implemented in SAP to periodically monitor and manage the company's ongoing financial liquidity. On the basis of the implemented solution, spare funds can be efficiently allocated in secure deposits with different maturities. The solution covers both the revenue side (sales) and the expenditure side (purchases) at the company-wide level and all events recorded in SAP. PSE have put in place a permanent mechanism to verify data having a direct impact on the scope and quality of the data used in liquidity risk management.

Increase resource redundancy in critical and rare areas

As part of this course of action, as set out in the business strategy for 2020–2030, an analysis of indisposition of PSE employees was carried out in the company, in cooperation with the Human Resources Department. The aim of this exercise was to identify risks in the individual operating entities that could pose a future threat to the company's business continuity.

As part of the initiative the characteristics of the reasons for indisposition have been analysed in detail, taking into account the employment structure.

Sizing of possible investment needs in reactive power management devices in view of the likely decrease in power demand as a result of the COVID-19 pandemic. Initiation of relevant devices

As a result of the COVID-19 pandemic, reactive power management needs were sized as part of the analytical work at PSE. In connection with the planned expansion of the transmission grid, the needs concerned the installation of chokes to offset voltage spikes in load valleys and at other times of the day due to the likely drop in power demand as a result of the COVID-19 pandemic. The location and required power levels were determined as follows: Narew (150 Mvar), Olsztyn Mątki (150 Mvar), Ostrów (100 Mvar), Rzeszów (100 Mvar), Siedlce Ujrzanów (100 Mvar), Tarnów (100 Mvar), Jasiniec (or Bydgoszcz) (150 Mvar), Pelplin (100 Mvar), Gdańsk Przyjaźń (150 Mvar), Gdańsk Błonia (100 Mvar), Żydowo-Kierzkowo (150 Mvar), Dunowo (150 Mvar), Baczyna (150 Mvar), Lublin (100 Mvar).

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