ELECTRICITY SUPPLY SECURITY Challenges for Poland

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ELECTRICITY SUPPLY SECURITYChallenges for
Poland
Hanna Trojanowska International Affairs and New
Technologies Department PSE SA Vilnius, 26-27
January 2006.
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AGENDA

• Challenges for the Polish Power Sector
• Development of the Polish Transmission System
  (PTS) including interconnections up to 2012
• Restructuring of the Polish Power Sector

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POWER SECTOR IN POLAND
TRANSMISSION PSE-Operator SA Transmission System
Operator - balancing market

• GENERATION
• over 30 PP including
• two large groups of
• producers BOT, PKE
• - 34 673 MW
• installed capacity,
• - 156,023 TWh
• annual production
• - 144,8 TWh
• annual consumption
• - 23 477 MW
• Peak load
• on 21 Dec. 2005
• 11,184 TWh
• net export of electricity

• DISTRIBUTION
• 9 distributing
• companies
• providing
• services
• for 15 million
• customers

POLISH Electricity Markets
TRADE suppliers, traders,
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Challenges for the Polish Power Sector

• 95 of electricity is generated from coal (hard
  and brown)
• Implications for environmental standards
  necessary investments
• Geographical location of the Polish Transmission
  System specific conditions for co-operation
  with neighbouring countries
• Electricity demand forecasts
• RD focus on new technology in generation
• Nuclear option is on the table

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SYSTEM ADEQUACY

• Long term security of electricity supply
  according to UCTE requirements
• Investments in the new infrastructure -
  generation transmission
• Forecasts of UCTE System Adequacy
• Competitiveness of electricity markets vs
  security of electricity supply

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Benefits of nuclear energy in Poland

• Meeting the increased electricity demand
• Low costs of power generation
• No CO2 emissions
• Diversification of fuel sources supply
• Increase of independence and readiness in case of
  energy crisis

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AGENDA

• Challenges for the Polish Power Sector
• Developments of the Polish Transmission System
  (PTS) including interconnections
• Restructuring of the Polish Power Sector

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PTS - CONGESTED AREAS
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PTS - INTERCONNECTIONS
PTS-NORDEL INTERCONNECTIONDC cable link the
transfer capacities reach 600 MW in both
directions and are determined by the cable
parameters
PTS-UPS/IPS INTERCONNECTIONthe transfer
capacities reach 400 MW (only imports of power
possible) and are determined by the current
operation
KSP-UCTE INTERCONNECTIONthe export capacities
are 2000 MW
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PTS IN 2008
2007
2006
2007
2006
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PTS IN 2012
2012
2010
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SCOPE OF GRID INVESTMENTS REQUIRED FOR POLAND AND
LITHUANIA TO PARTICIPATE IN THE IEM

• Grid investments in Lithuania
• 400 kV Alytus Polish border double-circuit line
• back-to-back substation 2?500 MW in Alytus
• 330 kV Alytus Kruonis double-circuit line

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SCOPE OF GRID INVESTMENTS REQUIRED FOR POLAND AND
LITHUANIA TO PARTICIPATE IN THE IEM

• Grid investments in Poland
• 400 kV Elk Lithuanian border double-circuit
  line
• 400 kV Narew-Elk line
• 400 kV Elk Olsztyn Matki line
• upgrade of substation Elk to 400 kV
• 400 kV Patnów Sochaczew Milosna
  double-circuit link
• 400 kV Plewiska German border double-circuit
  line (third Poland-Germany line)

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SCOPE OF GRID INVESTMENTS REQUIRED FOR POLAND AND
LITHUANIA TO PARTICIPATE IN THE IEM

• Grid investments in Germany
• 400 kV double-circuit line to Poland (third
  Poland Germany line)
• voltage level switch over from 220 to 400 kV
  Krajnik Vierraden
• 380 kV Vierraden Neuenhagen double-circut line

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SCOPE OF GRID INVESTMENTS REQUIRED FOR POLAND AND
LITHUANIA TO PARTICIPATE IN THE IEM

• All the investment projects mentioned have been
  submitted under the TENs project

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REQUIRED CONDITION OF GRID IN 2012
Kaliningrad(back-to-back)
Alytus(back-to-back)
Elblag
Elk
Olsztyn Matki
BIA
Ross(back-to-back)
Narew
Plewiska
Patnow
Milosna
Sochaczew
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CONCLUSIONS FROM THE STUDIES

• Reliability analyses of the interconnected
  systems, which take into account the needs of the
  IEM, define the necessary scope of system
  expansion in the Baltic countries, Poland and
  Germany for the purposes of the Lithuania-Poland
  interconnections
• All analyses have shown that the project is not
  cost-effective
• The results have been unacceptable to the TSOs,
  mainly to the Polish TSO due to effects on
  transmission tariff
• The outstanding funds required to achieve
  financial closing for the project exceeded 60 of
  the planned expenditure

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SINCE OUR NEGOTIATIONS ARE STILL ONGOING, A
SATISFACTORY SOLUTIONMAY STILL BE FOUND
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AGENDA

• Challenges for the Polish Power Sector
• Developments of the Polish Transmission System
  (PTS) including interconnections
• Restructuring of the Polish Power Sector

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CONSOLIDATION OF THE POLISH POWER SECTOR

• Opportunities and advantages on the electricity
  market in the context of economic power balance
  on the market
• Optimization of number of players capable of
  competing on electricity market
• Restructuring of LTC
• Electricity market concentration
• effectiveness versus competitions barriers

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Advantages of Power Sector Restructuring

• Fulfilling Energy law requirements regarding
  the TSOs activity
• Establishment of fully independent TSO with
  transmission asset
• Creation of a strong integrated company
  capable of competition on the domestic and
  European electricity market and able to invest
  in the development of infrastructure

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Thank you for your attention !