Buczkowski warns Poland's fledgling power exchange may be in jeopardy

The domestic power exchange, which debuted in December of last year, now risks being wiped out unless the National Power Grid (PSE) caps electricity volumes due to be traded in its new hourly balancing system, said Jan Buczkowski, head of the bourse. The state-run PSE is seeking to kick off a new balancing market on July 1 to allow energy players to square their positions on an hourly basis. Under the current monthly system, players are often left with costly imbalances in their energy portfolios. On July 1 the price of "surplus" energy will be determined on a supply-demand basis. Rules of the new system are, however, according to Buczkowski, extremely unfavorable for trading on the bourse. For example, offers for surplus power are to be placed with the PSE only one hour after power exchange price fixing. This he says is unrealistic and could lead to some of the biggest players choosing not to trade on the exchange. Buczkowski has thus called for a volume limit for the PSE's hourly balancing market of 2.5%-3%. The power exchange so far has managed to capture a market share of just 1%-2%; in January a mere 220,000 megawatt hours (MWh) were sold on the exchange. (Reuters)