Polish Power Exchange starts trading energy
Despite recent uncertain interest, the Polish Power Exchange (GE) will open for business today with a stack of participation agreements.
"We have (11) signed agreements on the table," said Agnieszka Szostek, the exchange's spokeswoman. The list of registered participants includes power plants and distributors, she said. But she added that the names of those companies were being withheld until a press conference scheduled for today. That was up from five signed agreements a day earlier, Javier Alonso, the exchange's president, announced at an energy trading conference in Warsaw.
Alonso mentioned as participants Rybnik, Poland's sixth-largest power plant and Gornoslaski Zaklad Energetyczny (GZE), a Silesia distributor. Rybnik was the first to sign a participation agreement on June 1.
Although a Rybnik spokesperson was unavailable for comment, Szostek said Rybnik President Tadeusz Sopicki told the Power Exchange that its price-setting contract with the Polish Power Grid (PSE) only covered 13% of its output and would expire in 2001. That leaves a considerable portion of energy output up for trade on the competitive exchange, Szostek said.
Alonso told attendees of the "Energy Trading: Central & Eastern Europe" conference that today's start-up of the exchange would be a pre-index period in which trades will be cleared but not settled. Full-speed trading will begin on July 1. Cross-border trading, as well as futures and forwards trading, will also be available in the future over the Power Exchange, Alonso said. But in the near term, the market will function on a "day-ahead" system.
Traded energy will be delivered the day after a trade is completed. Such markets consist of 24 hourly energy-price adjustments, for which prices are determined on a supply vs. demand equation. Those currently eligible to trade on the Power Exchange include 36 electricity generators, 33 distributors, 180 major consumers of electricity and brokers with licenses to trade energy. Minimum order sizes have been set at 100 Kilowatt hours (KWh) and orders will be handled electronically, mostly over the internet.
Wladyslaw Mielczarski, Poland's energy adviser, told conference-goers that energy exchanges set up in the last decade in various regions of the world have usually led to lower prices. In Australia, one of the most competitive countries, consumers pay 15% less than they did in pre-exchange days, he said.
Treasury Minister Emil Wasacz told attendees his ministry is committed to preparing Poland for European Union (EU) entry by 2003. Accession requirements include cross-border energy trading and privatization of the energy sector.
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