Due to amendments to the Energy Law which came into force on the 9th of August 2010 and changes in the act on excise, all brokerage houses can become members of the Polish Power Exchange and represent their customers on the Day-Ahead Market (DAM) and Commodity Derivatives Market (CDM). First members of DAM and CDM are brokerage houses BOŚ and NOBLE Securities.
Amended Act absolves brokerage houses concluding transactions on the exchange from obtaining concession for electricity trading. The Energy Law has also been altered regarding the energy companies fulfilling the obligation of settlement of the certificates of origin. Since yesterday it can be performed by the final consumers of electricity (if they purchase electricity on the exchange) or they can order it through brokerage houses.
"It is the legislature's nod in the direction of the final customers. They do not have to deal with procedures related to the settlement of property rights to certificates of origin (the so-called "coloured obligations"). They can place an order with the brokerage houses. It makes an access to power exchange market significantly easier, as the entity entering orders on the exchange and clearing transactions through the brokerage house does not need to meet the requirements imposed on exchange member by the Polish Commodity Exchange Act e.g. to obtain permit for maintaining accounts and exchange commodities registries "- says Henryk Kaliś from Forum of Electric Energy and Gas Consumers.
Until the 9th of August 2010 brokerage houses could only be members of POLPX at Property Rights Market (PRM) for certificates of origin for electricity generated in RES and CHP and Emission Allowances Market.
"Last changes on the electricity market in Poland make up for a major milestone in creating a common European market opened to everyone interested via the exchange. We are facing implementation of market coupling mechanism in the Polish and Swedish connection which will connect both electricity markets"- says Grzegorz Onichimowski, The President of Polish Power Exchange.
The Excise Act also amended the definition of the final purchaser of electricity. There has been a crucial provision added excluding not only commodity exchanges but also clearing houses and brokerage houses from the group of final purchasers of electricity. Due to this provision brokerage houses buying electricity on the exchange on behalf of a customer are not charged with excise at the amount of 20 PLN/MWh.
"The changes on the Polish electricity market open new opportunities for us. We can already observe a significant interest of large final customers and energy companies, not only from Poland but also from abroad, who have been waiting for the opportunity to participate in our electricity market" - said Iwona Ustach, the Vice President of BH Noble Securities.
Apart from the aforementioned changes, amendments in the Energy Law require from the power generators to sale at least 15 percent of their output on the polish regulated market, i.e. on commodity exchanges, or via Internet trading platforms and via public auctions.
The electricity trading volume on the Day-Ahead Market and on the Commodity Derivatives Market has amounted to 1 893 473 MWh. July, despite the holiday period, has turned out to be the best month in terms of the volume, from the beginning of presence of the POLPX on the electricity market in Poland.
Development of the DAM - the oldest market on the exchange - is set (among others) on the integration with the neighbouring markets - Scandinavian, Czech and Slovakian and also with German market in the future. The Day-Ahead Market participants will gain access to cross-border transmission capacities and energy sources. By November this year the members of POLPX and Scandinavian Nord Pool Spot exchange will be able to trade in electricity on the cross-border direct-current connection with capacity of 600 MW - SwePol ("the Swedish cable"), basing on so-called "Market Coupling" mechanism through the Day-Ahead markets of both exchanges.
Futures contracts with physical delivery executed on Commodity Derivatives Market enable to specify price for electricity for longer time period (on POLPX up to three years ahead) which creates crucial price impulses for investors who plan to build new generation capacity. They enable power retailers and large consumers to foresee prices and optimize their electricity sale/purchase costs.
