• Polish Power Exchange introduces two new monthly indices for the RES sector (TGeONSHOREm i TGePVm), basing on standard electricity production profiles from onshore wind and PV in Poland.
  • At the same time, TGE will publish monthly indices: TGeBASEm, corresponding to the arithmetic mean of trading volume-weighted average hourly Day-Ahead Market prices; and TGeBASE_WAvg, corresponding to the trading volume-weighted monthly Day-Ahead Market price.
  • The newly defined indices will enable TGE both to extend the scope of information published in line with the market participants’ expectations and to formalise monthly price indices basing on the Day-Ahead Market.

Introduction of the new indices was one of the recommendations specified in the last year’s report by Instytut Jagielloński entitled “The development of the exchange market for the RES sector”. The publication presents a number of solutions being implemented by the RES Sector Exchange Offer Development Team, established in July 2021, comprising representatives of TGE Capital Group, financial institutions, energy sector and public administration. The experts were responsible for the development of the new tools.

“The Day-Ahead Market indices currently published by TGE hold their information value; nonetheless, in the context of the undergoing energy transition, therefore increasing share of renewable sources, in particular wind and PV, we should seek solutions matching the needs of market participants. Therefore, we are introducing a tool enabling the data to be compared over time, with regard to the nature of the RES market. As TGE, we are trying to face market expectations, turning towards the green industry,” explained Piotr Listwoń, TGE Vice-President of the Board.

The most important issue related to implementation of the new indices was the development, in cooperation with the Polish Wind Energy Association and the Polish PV Association, of solutions based on the establishment of standard profiles by specifying the expected hourly production for an average day in a given month, which would enable the development of a corresponding price index.

“In the face of substantial changes occurring in the energy market, price indices for electricity from wind and PV sources will play a key role. This will be the first step, relatively simple, because it is based on known exchange mechanisms. In subsequent stages TGE will work on an attempt to standardise cPPAs to enable exchange trading thereof. Such measures will enable the launch and standardisation of mechanisms contributing to the development of the RES market in Poland, crucial for dynamic growth of renewable sources that enable us to obtain inexpensive and clean electricity,” said Janusz Gajowiecki, PWEA President.

The indices will be prepared for particular months of supply or trade (depending on the index) together with historic data starting from January 2021. Each index for the previous month will be published at www.tge.pl no later than on the third business day of the next month.

“PV and onshore wind decrease wholesale electricity prices. Along with the increase in renewable capacity, their impact on the energy market will grow in significance. Therefore, we support Towarowa Giełda Energii’s actions aimed at introduction of mechanisms dedicated to the RES industry. Price indices for electricity from wind and PV are the first, crucial step towards development of solutions that will streamline the conclusion of cPPAs between RES producers and electricity customers,” stressed Irena Gajewska, Director, Polish PV Association.

 

Below we present a brief description of the new indices:

  • TGeONSHOREm — weighted average price for 24 hours of supply of electricity in a given month, calculated using weights specifying the share of electricity production efficiency from onshore wind in Poland in particular hours of the day as seen from the point of view of the entire day of the supply and considering only transactions concluded on hourly Day-Ahead Market instruments.
  • TGePVm — weighted average price for 24 hours of supply of electricity in a given month, calculated using weights specifying the share of electricity production efficiency from PV in Poland in particular hours of the day as seen from the point of view of the entire day of the supply and considering only transactions concluded on hourly Day-Ahead Market instruments.
  • TGeBASEm — benchmark for TGeONSHOREm and TGePVm. TGeBASEm presents the price of electricity for the month of supply calculated as a simple arithmetic mean of trading volume-weighted hourly prices, considering only transactions concluded on hourly Day-Ahead Market instruments.
  • TGeBASE_WAvg — answers the need to formalise key price value. It corresponds to the average monthly price on the Day-Ahead Market weighted by trading volume and reflects the average price of electricity contracted on that market in a given month, therefore is used to calculate the total value thereof. Owing to the establishment of TGeBASE_WAvg, the value will be precisely defined and receive a short name, translating into easier reference.

Irrespective of the transition of the Polish energy sector and the importance of RES indices, we would like to stress the possibility to use the TGeBASEm and TGeBASE_WAvg indices in operations of a broad range of current market participants and trading companies involved in spot electricity markets.