TGE as a Nominated Electricity Market Operator

• In December 2015, TGE was designated as a Nominated Electricity Market Operator (NEMO) to implement the single price market coupling of the European day-ahead and intraday electricity markets for the Polish pricing area.
• According to the provisions of the CACM Regulation, each member state could decide on model for its domestic market choosing between the monopoly option, i.e. one NEMO on the market, and the competition option, i.e. at least two NEMOs on the market. Poland opted for the latter and the Energy Regulatory Office nominated three NEMOs, i.e. TGE on 2 December 2015 and EPEX SPOT and NORD POOL (now EMCO) in April 2016. Such a decision resulted in the obligation for PSE to prepare a MNA (Multi-NEMO Arrangements) document which defined the model of the Polish electricity spot market.

What is the role of NEMO?

• NEMO is the entity that ensures the matching of offers/bids for electricity made on international day-ahead market and intraday markets operated under the PCR market coupling model. These functions are described as the role of a Market Coupling Operator (MCO) in transboundary electricity trade.
• The responsibilities of a NEMO include in particular: the development and maintenance of algorithms, systems and procedures related to the transboundary market coupling mechanism together with other NEMOs, processing of collected input data regarding the available transboundary capacity and, ultimately, its efficient allocation at congestion points and electricity price setting.
• The nomination as a NEMO gives the energy exchange (TGE) the right to operate the domestic Day-Ahead and Intraday Markets and to take part in a joint transboundary market coupling mechanism (respectively, PCR and XBID).
• An exchange that has been granted NEMO’s rights for one market may conduct the same activity and offer services to participants on other domestic markets, except in countries where there is a statutory exchange monopoly.
• The nomination of a NEMO is valid for 4 years and therefore needs to be renewed for TGE before 2 December 2019, in the course of a procedure to be determined by the President of the Energy Regulatory Office.
• In accordance with the provisions of the CACM Regulation, NEMOs submitted a number of documents regulating the operation of markets and defining more precisely the cooperation model and principles for approval by the regulatory authorities. This fundamental package includes the MCO PLAN which standardises solutions at EU level.
• All approved NEMO documents are available on the TGE website in section: MCO/CACM plan for Single Day Ahead Coupling - SDAC (day-ahead market) and for Single Intra Day Coupling - SIDC (intraday market).

Multi-NEMO model on the Polish electricity spot market (status as at 1 June 2019)

• The nomination of two additional NEMO exchanges on the Polish spot market (EPEX SPOT and NORD POOL) resulted in the obligation of PSE to prepare regulations and agreements establishing the legal framework for the operation of multiple NEMOs on the Polish market by submitting a Multi-NEMO Arrangements document for ERO’s approval. PSE presented proposals for operational solutions and the implementation schedule.
• According to the PSE report of 29 May, the MNA project for the Polish energy market is divided into three phases:

Phase I: Impact assessment and model design – until 30 June 2019;

Phase II: development - until 30 September 2019 (system development, review and update of agreements and procedures, and local implementation and testing – to be specified in more detail depending on the results of the Phase I, in which the impact of the model on the systems will be assessed in detail);

Phase III: tests – from September till October 2019 , including local NEMO-TSO tests (1 to 18 October 2019), MRC tests (21 October to 1 November 2019), technical readiness of the MNA model (1 November 2019) and launch by 15 November 2019.

• European multilateral day-ahead and intraday market agreements have ensured the standardisation of NEMO services throughout the EU. These agreements will be supplemented by local regulations concerning the principles for the operation of all NEMOs and TSOs in a given pricing zone.
• The introduction of the MNA model and the emergence of additional NEMOs on the Polish market does not affect the volume of electricity supply and demand. The allocation of transmission capacity for individual NEMOs will be provided daily in the results of calculations made by the market algorithm according to the PCR model, which in turn will depend on electricity buy/sell orders placed by market participants with individual NEMOs.
• NEMOs will not generate individually differentiated clearing prices for the day-ahead market as all fixing orders for cross-border trade will be transferred to a common PCR calculation mechanism, where uniform trading conditions will be established and no NEMO nor “its market participants” will have a privileged position in this respect.