One of the company's primary responsibilities as a Transmission System Operator (TSO) is to ensure the operational security of the power system. This objective is supported by the implementation of a capacity mechanism, i.e. a capacity market, which should guarantee generation adequacy in the medium and long term. The capacity market should also provide available capacity for further development of renewable energy sources (RES) without adversely affecting the security of electricity supplies to end users.

It should also allow the implementation of an effective and competitive mechanism to coordinate the construction and decommissioning of generating units and the development of demand side response services, while ensuring that the costs to end users are minimised. .

Since the beginning of 2021, a number of processes have been carried out to enable the conclusion of further capacity agreements, as well as the implementation of the current agreements. 

In 2021, the implementation of the capacity market processes began with the general certification, conducted between January 5 and March 12. Participation in the general certification is mandatory for all existing physical generating units with a gross generating capacity of not less than 2 MW, and compliance with this obligation is monitored by the President of ERO. Participation of scheduled physical generating units, physical demand side response units and scheduled demand side response units is optional, but is a prerequisite for subsequent participation in auction. A unit which has successfully completed the general certification process is entered into the register

For the 2021 general certification, applicants submitted 1254 applications for entry into the register. A total of 1,223 units were successfully verified and entered into the register, including 1,020 physical generating units and 203 demand side response units. The summary of the 2021 general certification is presented in Tab. 1.

The following charts show information on the number of physical generating units entered into the register in the 2021 general certification year, by primary energy source used. 

Within 14 days of completion of the general certification, PSE submitted a detailed report summarising the general certification to the Minister responsible for energy and to the President of ERO. Furthermore, within 28 days of the completion of the general certification, PSE prepared a proposal for the parameters of the main auction for the delivery year 2026 and the parameters of supplementary auctions for individual quarters of the delivery year 2023, and also submitted the proposal to the President of ERO and the Minister responsible for energy.
The final values of the parameters were published in the Regulation of the Minister of Climate of 12 August 2021 on the parameters of the main auction for the delivery year 2026 and the parameters of supplementary auctions for the delivery year 2023.


On February 16, 2021, certification for supplemental auctions ended for individual quarters of the delivery year 2022 that began back in 2020 (November 24, 2020). As part of the certification for supplementary auctions for individual quarters of the delivery year 2022, power suppliers submitted 94 requests for certification, of which 52 were for the existing generating capacity market units and 42 for unconfirmed demand side response capacity market units. As a result of verifying the requests, PSE issued 83 certificates allowing capacity market units to participate in the capacity auction or the secondary market. Tab. 2 includes detailed information on the number of certificates issued.

Immediately after the announcement of the preliminary results of the supplementary auctions for individual quarters of the delivery year 2022, PSE launched the possibility of reporting in the register of secondary trading transactions concerning the delivery year 2022 (implementation of the provisions of Article 48(1)(1) of the Act). Each secondary trading transaction must be reported to the PSE for verification for compliance with the requirements of Article 48(2) of the Act. The minimum volume of the transferred capacity obligation covered by a single transaction is 0.001 MW and the minimum duration is one hour from 7:00 a.m. to 10:00 p.m. on business days. A transaction conducted in secondary trading must be reported no later than 24 hours before the start of the period to which it relates.

In parallel to the certification processes, PSE continued the process of replacing scheduled demand side response units. This process is conducted in cooperation with the DSO and is intended to obtain information on physical demand side response units replacing scheduled demand side response unit and to enter these units into the register. Capacity suppliers may submit replacement requests no later than 3 months prior to the start of the delivery period for which the capacity agreement was concluded, or 3 months prior to the start of the last quarter of the delivery year specified in the certificate – this applies to units not covered by the capacity agreement. Ultimately, 17 scheduled demand side response units were replaced in 2021.

After the scheduled demand side response units replacement process was completed, PSE proceeded with demand side response testing for unconfirmed demand side response capacity market units. For unconfirmed demand side response units of the capacity market that do not receive a confirmed demand side response capacity test before the start of the delivery period specified in the capacity agreement, the capacity agreement is terminated. Demand side response tests are conducted at the request of the capacity supplier submitted through the registry. Capacity delivered at the level of at least 80% of the product of the net available capacity and the corrective availability factor is considered a positive test result. In 2021, 17 units received a positive result and changed their status to a confirmed demand side response unit.

On 26 August 2021, PSE conducted the second preliminary auction in the history of the power market via the Capacity Market Participant Portal. Foreign physical units located in countries where power system is directly connected to the NPS may participate in the preliminary auction. The Act allows units located in three areas to participate: in the synchronous profile zone (part of the transmission system of the Federal Republic of Germany, the transmission system of the Czech Republic and the transmission system of the Slovak Republic), in the Republic of Lithuania and in the Kingdom of Sweden. The preliminary auctions are carried out for each zone separately and the maximum volume of capacity obligations for a given zone is determined under the ordinance of the minister responsible for energy issued pursuant to Article 34 of the Act. In a preliminary auction, bids are accepted starting with those with the lowest price until the maximum volume for a given zone is reached. The bids selected in the preliminary auction are then replaced with capacity market units in the auction certification.

The preliminary auction in 2021 concerned the admission of foreign physical units located in the territory of the Kingdom of Sweden to participate in the main auction for the delivery year 2026. The auction ended with 39 bids accepted. Within 21 days from the end of the preliminary auction, PSE submitted a detailed report summarising the auction process to the Minister responsible for energy and the President of ERO.

The next capacity market process conducted in 2021 was certification for the main auction for the 2026 delivery year. Participation in the certification for the auction is not mandatory, but is necessary to set up the capacity market units and allow them to participate in the auction or in the secondary market for a given delivery period. As a result of successful verification of the applications, PSE issued certificates authorising the capacity market units to participate in the main auction and the secondary market. As part of the certification for the main auction for the 2026 delivery year, power suppliers submitted 221 certification applications, of which 157 were for generating capacity market units, including 39 foreign generating capacity market units, and 64 were for demand side response capacity market units. Following the certification, PSE submitted a detailed report summarising this certification to the minister competent for energy and the President of ERO for the auction.

As a result of the verification of the applications, PSE issued 219 certificates allowing the capacity market units to participate in the capacity auction or the secondary market. Tab. 4 includes detailed information on the number of certificates issued.

The main auction for the delivery year 2026 was also conducted in 2021. It was the sixth main auction on the Polish capacity market. It resulted in a total of 128 capacity agreements, including 17 capacity agreements for more than one year. For the first time, only capacity market units meeting the carbon dioxide emission limit of 550 g/kWh were admitted to the main auction for the 2026 delivery year. Tab. 5 presents a summary of the main auction conducted.

The rules for conducting main auctions are similar to the rules used for supplementary auctions. Unlike the supplementary auctions, however, in the main auctions, capacity market units may - depending on the type of capacity market unit and the duration of the capacity obligation offered by the unit - enter into multi-year capacity agreements. Existing generating capacity market units may offer capacity obligations for only one delivery period. Modernised generating capacity market units and demand side response capacity market units declaring to have carried out investments and to have met unit investment expenditure levels stipulated in the Regulation may offer the obligation for up to 5 delivery periods, and new generating capacity market units declaring to have met unit investment expenditure levels stipulated in the Regulation – for up to 15 delivery periods. In addition, it is possible to extend the term of the capacity agreement by an additional 2 years for low-carbon generating capacity market units (the so-called green bonus).

Tab. 6 presents a breakdown of capacity agreements by the duration of capacity obligations.

Work continued in 2021 as part of the process of monitoring the implementation of capacity agreements. According to the amendment to the Act, a power supplier which has entered into a capacity agreement for a new or modernised capacity market unit as a result of the main auction is required, no later than 24 months from the date of announcement of the final results of the main auction, to demonstrate that the unit owned has reached the so-called Financial Commitment Milestone (FCM). The FCM is achieved by demonstrating that investment expenditures of at least 10 per cent of the required investment expenditures have been incurred and investment agreements with a total value of at least 20 per cent of the required investment expenditures have been entered into (Article 52(1)(1) and (2) of the Act). As a result of the amendment to the Act, in order to comply with these requirements, power suppliers which entered into capacity agreements as a result of the main auction for the delivery year 2025 are required to provide statements through the register confirming their compliance with the FCM in 2022. Therefore, no FCM statements were submitted to the PSE for verification in 2021.

Additionally, according to the Act, a power supplier which has entered into a capacity agreement for more than one delivery year as a result of the main auction is required to demonstrate – no later than before the beginning of the first delivery period, and in the case of a new generating capacity market – no later than before the end of the third delivery year or before the end of the term of the capacity agreement if it has been entered into for less than three delivery years – that the capacity market unit owned has reached the so-called Substantial Commitment Milestone (SCM). The SCM is achieved by presenting documents confirming the realisation of the material scope of the investment and the required investment expenditures, as well as the ability of the unit to deliver power in an amount of not less than 95 per cent of the capacity obligation resulting from the capacity agreement concluded for this power market unit in the course of the main auction, with continuous operation of the unit, for a period of at least one hour (Article 52(2)(1) and (2) of the Act). In addition, an independent expert's report containing information in accordance with Article 52(2)(3) of the Act must be submitted and accompanied by information on the amount of public assistance provided and, in the case of new capacity market units, also a list of metering points. In 2021, PSE positively verified the statements on the SCMs for 2 capacity market units with capacity agreements concluded in the course of the main auction for the delivery year 2022 and for 4 capacity market units with capacity agreements concluded in the course of the main auction for the delivery year 2021 which did not meet the SCMs before the start of the first delivery year.

As part of the process of monitoring the implementation of power agreements, investment reports submitted within 10 working days after the end of 6 full months starting from the third calendar year after the main auction were reviewed. The reports allow us to monitor whether timely achievement of the SCMs is at risk. In July 2021, 37 investment reports were positively reviewed, and in January 2022 – 34 reports.

2021 was the first delivery year for the capacity contracted as a result of the capacity auction. In view of this, PSE started to handle subsequent power market processes, i.e. demonstration of capacity, test system stress events and capacity obligation payments. In 2021, there was no situation in which the amount of excess capacity available to the operator in the daily scheduling processes of the system operation required intervention by declaring an emergency period. For this reason, the performance of capacity obligations during the emergency period was not settled in 2021 and no bonus was calculated for the performance of a capacity obligation in excess of that required during the emergency period.

Pursuant to Article 67 of the Act, after the end of each quarter in the delivery year, the power supplier which was a party to the capacity agreement demonstrates to the operator its capacity to fulfil its capacity obligation in relation to each of the capacity market units to which the agreement relates. The demonstration of the ability to fulfil the capacity obligation consists in indicating to the operator the day and time when the capacity market unit delivered power to the system in the required volume (the so-called demonstration). Tab. 7 presents the number of capacity market units (CMUs) subject to the demonstration obligation in 2021 and their performance on a quarterly basis.

Out of a total of 105 test system stress events announced, 102 cases resulted in a positive outcome and three in a negative outcome. In view of the above, pursuant to Article 68(8), in the case of a negative result of a test system stress event, PSE charged power suppliers penalties for non-performance of the capacity obligation at a total net amount of PLN 91,835.15. In the event of a positive outcome of the test system stress event, PSE reimburses any reasonable costs associated with its execution at the request of the power supplier. Tab. 8 presents the amounts reimbursed by PSE to power suppliers following the approval of reasonable expense requests in each quarter of 2021.

2021 was the first year of settlements in the capacity market, including in particular the payment of remuneration for the performance of the capacity obligation and the calculation of penalties for non-performance of the capacity obligation and the SCMs. The table below presents the remuneration earned by power suppliers in 2021 on a monthly basis.

In early 2022, PSE began another general certification, which was conducted between 3 January and 11 March 2022. During the certification , applicants submitted 1412 applications for entry into the register. A total of 1,379 units were successfully verified and subsequently entered into the register, including 1,144 physical generating units and 235 demand side response units. A summary of the number and net generating capacity of units in the register is shown in Tab. 6. .

Within 14 days of completion of the general certification, PSE submitted a detailed report summarising the general certification in 2022 to the Minister responsible for energy and to the President of ERO. Additionally, within 28 days of the completion of the general certification, PSE prepared proposed parameters for the main auctions for the delivery year 2027 and parameters for supplementary auctions for each quarter of the delivery year 2024. The proposal of parameters was submitted to the President of ERO and the Minister responsible for energy.

At the same time, between November 23, 2021 and February 18, 2022 PSE conducted certification for supplementary auctions for individual quarters of the delivery year 2023. As in the certification for the main auction, participation in the certification was not mandatory, but was necessary in order to establish the capacity market units and allow them to participate in the supplementary auctions for each quarter of the delivery year 2023 or in the secondary market for that delivery year. As a result of successful verification of the applications, PSE issued certificates authorising the capacity market units to participate in the above mentioned processes. Following the certification, PSE submitted a detailed report summarising this process to the Minister responsible for energy and the President of ERO.

Supplementary auctions were conducted for the third time by PSE on 17 March 2022. Four supplementary auctions for each quarter of the delivery year 2023 were held simultaneously. The process resulted in a total of 159 capacity agreements. Tab. 7 presents a summary of supplementary auctions conducted.

Meeting the statutory time limit of 3 business days after the end of the capacity auction, PSE published preliminary results of the auction in the register and made them public. Subsequently, a detailed report summarising the auction process was submitted to the competent minister for energy and the President of ERO. The final results of the supplementary auctions for the delivery quarters in 2023 were announced by the President of ERO in the Public Information Bulletin on April 8, 2022.

After the announcement of the preliminary results of the supplementary auctions for the individual quarters of the delivery year 2023, implementing the provisions of Article 48 (1) (1) of the Act, PSE launched the possibility of reporting in the register of secondary trading transactions concerning the delivery year 2023.