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DISTRIBUTION AND TRANSMISSION OF ELECTRICITY
IN NEW PTPiREE REPORT

 

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In 2019, the electricity consumption amounted to 169.3 TWh. In that year, Polish operators spent on investment expenditures over PLN 8 billion. Energy distributors reported a record increase in the share of cable lines in MV lines, as their level reached 27.6%. Last year was also special for prosumers, because during the 12 month, the power engineers connected to the network more than 100,000 micro-systems, which is almost twice as much as in previous years.

This information and many other data are presented in "Energy sector.  Distribution and Transmission in 2019" report, published by the Polish Power Transmission and Distribution Association (PTPiREE) and associated companies. This extensive and comprehensive report contains more than 120 pages with plenty of data, indicators and charts, but it focuses mainly on presenting analyses and expert opinions, which form a comprehensive picture of the energy transmission and distribution sector in Poland. It's an interesting read for those interested in the Polish energy sector and the economy. The report contains not only the data from last year. It also comprehensively presents the prospects of the industry.

 

 

ELECTRICAL POWER 2019

Polish electricity system consists of 3 key areas: generation, transmission and distribution of energy. Hundreds of thousands of stations and thousands of kilometres of power lines ensure energy security of the country and reliability of electricity supply to consumers. In addition to the essential technical aspects of the equipment used for the production or transmission of electricity, the role of power system operators is also important, particularly in the light of new EU regulations.

 

ENERGY PRODUCTION AND CONSUMPTION

Energy production in 2019 totalled to 158.8 TWh. The vast majority of energy produced (75.4%) is based on a conventional fuel, i.e. hard coal and brown coal.

In 2019, electricity consumption amounted to 169.3 TWh, which is 0.9% decrease, compared to the previous year, despite the forecasts that indicated a steady increase in demand for electricity. Even more visible drop (by 3.9%) was noticed in the production of electricity. This resulted in a record level of electricity imports, equal to 10.6 TWh, which is 6.3% of energy consumption (an increase of 85% compared to 2018).

In 2019, the largest share in the electricity production had coal-fired power plants. Their share in the total production amounted to 49.2% (78.2 TWh), while the share of lignite-fired power plants was 26.1% (41.5 TWh). Compared to 2018, the share of lignite-fired power plants in energy production decreased by 15%, while the share of coal-fired plants by 5%. Once again, there was a clear increase in the production of gas-fired power plants. They generated 26.2% more energy (12.1 TWh) than in 2018.

The installed capacity of Polish power plants increased in 2019 by 1.9%, reaching 46 798 MW. The share of individual types of power plants in the total installed capacity is similar as for energy production. The largest capacity increase (by 19.6%) was observed for gas power plants. Also, the power capacity of wind power plants and other renewable plants increased by 13.1%. This was also the largest power increase in absolute values (869 MW). The power drop by 4.2% was recorded for lignite-fired power plants, while for hard coal-fired plants it was 0.3% and for industrial power plants by 1.7 %

 

RENEWABLE ENERGY SOURCES (RES)

At the end of 2019, the group of RES installations noticed an increase in installed capacity by 512 MW to reach 9106 MW. The biggest share (344 MW) in this growth had photovoltaic solutions (almost 70% increase of RES power). The production leader in the RES segment was still wind power generation.

 

To provide the full picture of the RES, we should add 1 000 MW of installed power from micro-systems. 2019 was unique for this segment of renewable energy, because more than 100,000 micro-systems were connected to the grid, which almost twice as much as in previous years together. At the end of 2019, Poland had 155 626 micro-systems connected to the grid and their main energy source (almost 100%) were solar panels with a total installed power of 990.5 MW. The vast majority of micro-systems are prosumers, whose number has increased to 149 308. They introduced 324.3 GWh of electricity to the grid.

As mentioned above, 2019 was a time for dynamic growth of new micro-systems, primarily of prosumer type. At the end of 2019, the total installed capacity reached 1 000 MW. For the national power system it is not a significant value, but for distributors it means the need to adapt the network to bidirectional flow of energy.

 

INFRASTRUCTURE INVESTMENTS

2019 was another year in which the Polish power system operators implemented large investment programs. Projects started in previous years were continued and new initiatives have been started. Company financed the investments from their own budgets, as well as from external sources, mainly from the EU funds. In total, a sum of PLN 8 035.2 million was spent on investments.

For majority of people, reliable power supply is essential to ensure normal daily operations. Each of the power network elements, equipment or systems that perform specific functions, have certain reliability. Reliability in power systems is related with the ability to supply customers with electricity under certain conditions, time and place. To increase this reliability, modern technologies and solutions are increasingly applied. A good example may be the process of replacing overhead lines by cabling (particularly in terms of MV networks). This solution results mainly from the analyses of network failure rate, indicating that the overhead lines are mainly responsible for majority of failures. Therefore, distribution network operators plan to invest in MV network cabling, as one of their priorities.  In 2019, the share of cable lines in MV lines significantly increased (by 0.94%) to reach 27.6%.

 

NEW ROLE OF OPERATORS IN THE POWER SYSTEM

The need to maintain the EU's competitiveness, accelerate the transition to clean energy by modernizing the European economy and the observation of changes in technology trends in the electricity market, became an inspiration for the European Union's new energy package called "Clean Energy for All Europeans." The future energy market model sets tasks and roles for distribution system operators (DSO's), which are increasingly important. The operators will no longer be only neutral support for the energy market. They will soon become the leading actors in many areas - including innovation, energy storage, smart grid, energy efficiency, electromobility, cooperation with prosumers and renewable energy sources.

Climate and energy challenges of the European Union has become a major driving force in building more competitive, secure and sustainable energy system, and reducing greenhouse gas emissions by 2030. It is assumed to reduce these emissions by at least 40%, compared to the level of 1990, increasing at the same time the energy efficiency by 32.5 % and the share of energy from renewable sources to 32% of final consumption. The result will be a steady increase in installed capacity of renewable energy sources and a space for new energy market players, as well as a change in their current role. The rapid development of distributed energy resources will influence the future shape of the energy market. As a result, a new role of distribution system operators will be shaped on the market.

 

PACKAGE WITH NEW CHALLENGES

"Clean Energy for All Europeans" is the new EU energy package, which consists of four directives and four regulations on energy efficiency, promotion of energy from renewable sources, common rules for the internal electricity market, risk-preparedness in the electricity sector, managing the energy union and functioning of the EU Agency for the Cooperation of Energy Regulators. Currently, the European Union continues the implementation of new regulations. They bring many changes on the electricity market. First of all, the regulations update the legal framework for the functioning and development of the retail market, changing the existing or introducing new elements, e.g. in terms of contractual conditions, settlements, the right to switch suppliers, the right to an objective comparison of offered energy prices, single information point and vulnerable customers. They also focus on implementing solutions that activate energy market users, enabling them to participate in all its components: production, storage, reception and sale of electricity, as well as in the functioning of the market by group activities in various types of energy communities and prosumer groups. The regulations introduce also a legal framework for new activities in the energy market, such as storage, electromobility, aggregation and flexibility services.

The package maintains the existing preference to support the development of distributed generation - renewable energy sources. It also updates the legal framework for the implementation of smart meters and metering data management.

 

CHALLENGES FOR DISTRIBUTION SYSTEM OPERATORS

Many new elements of the energy market, presented in a package, refer to the activities of distribution system operators. In the process of creating new regulations, the ongoing technological change was observed and rapid development of distributed generation as well as changes in the power grid functioning.

New activities in the energy market will be implemented largely in the distribution network.

When designing new regulations, the European Commission noticed that further, effective development of the electricity market is impossible without the involvement of distribution system operators.

The package introduces many new elements into the activities of DSOs. First of all - European entity for distribution system operators (EU DSO) will be established to operate on principles similar to the association of transmission system operators (ENTSO-e). It will allow operators to actively and formally participate in creating law for the European electricity market (e.g. grid codes and guidelines).

Secondly - the primary role of distribution system operators will be to support the development of the market. Operators will become neutral entities constituting a platform for the functioning of the retail electricity market and allowing the development of new functionalities and activities.

Other key issues of the package include: cooperation of distribution and transmission system operators, development of the network towards smart grid, ability to obtain flexibility services by the DSO's, conditions for DSO's participation in new activities in the energy market, such as electromobility and electricity storage.

Directions of changes in the electricity market model outlined in the package require supplementing and redefining the existing roles of distribution system operators.

 

 

NEW FUNCTIONING MODEL FOR OPERATORS OF DISTRIBUTION SYSTEMS

In the future, distribution system operators, in addition to their existing roles, will create and support the development of the market, particularly local markets. They will also play a leading role in implementing innovations in distribution networks.

This will be possible in the reality, in which a dynamic system replaces the traditional system based on centralized production and predictable behaviour of users.

The market will consist of the retail section (managed by the distribution system operators) and the system section (managed by the transmission system operator). The distribution network will be standardized towards smart grid. The mechanisms of local balancing of the distribution system will be extended. Distribution system operators will continue to provide impartial and transparent rules of use, production and storage of energy, as well as to manage their own energy potential. We will witness a wide use of e-services and establishing new communication channels.

 

REGULATIONS GUARANTEEING IMPLEMENTATION OF CHALLENGES

The implementation of "Clean Energy for All Europeans" will create legal and regulatory conditions for establishing a system that will ensure balancing of the interests of all market participants. The operational stability of DSO's in terms of revenues will be ensured through: covering fixed costs, the evolution of the model for determining the WACC and the return of capital, regulatory account mechanism, indexation of operating costs, a clear price of energy losses and clear mechanism for the purchase of system services.

 

LOCAL BALANCING. PURCHASE OF SYSTEM SERVICES BY DISTRIBUTION SYSTEM OPERATORS

According to the provisions of the EU energy package, the potential of distributed energy sources will be used for the operation and development of distribution system operators. The technical foundations will be created for the development of distributed generation and distributed energy resources. A new role of distributed sources will be defined as a part of balancing. Technical balancing in the distribution system will be carried out at local and regional levels. Distribution system operators will coordinate the entire distribution network and will participate in its commercial balancing. The distributors will also provide balancing services to the operator of the transmission network and cooperate with other entities within the framework of local initiatives.

 

DEVELOPMENT OF DISTRIBUTED SOURCES

"Clean energy for all Europeans" addresses also important aspects of developing distributed generation sources that will be used in the management of the distribution network. Network support will be provided for the integration of sources and use of available flexibility services.

A growing number of distributed energy sources will generate a bidirectional energy flow, which will be difficult to program, affecting the management and operation of the network. Distribution system operators will implement adequate functionalities of smart grids.

Active customers will be involved in the management of network operation and in planning its development. New IT solutions will become even more popular.

 

FLEXIBILITY IN DISTRIBUTION SYSTEMS

For the purposes of DSO's operation and development, the potential of distributed energy sources will be applied, as well as contracts for flexibility services that would support managing network restrictions in the distribution from providers distributed generation, response to reception or energy storage.

DSOs, as entity managing the retail market, will use the effects of the production decentralization and activity of users.

 

 

COOPERATION WITH ENERGY COMMUNITIES


 

The new energy package also takes into account the cooperation in balancing local areas, the development of new products and services necessary for effective network management and activation of network users. Distribution system operators, maintaining impartiality and transparency, will cooperate with energy communities, which will obtain a guarantee of energy security.

Preference will be given to initiatives having a form of micro-grids. Energy communities will be treated as separate participants of the energy market.

 

ELECTROMOBILITY CHALLENGES

Distribution system operators will continue to implement the functions, responsibilities and tasks related to the development of electromobility, also due to the fact that the binding law requires operators to build a minimum number of charging points for electric vehicles. It is planned to continue active cooperation with local governments in constructing the infrastructure for electromobility.

In determining the locations of public charging stations, the network capacity and local demand for such services will be taken into account. Distributors will explore the effects of electromobility on the network and identify potential development of new services.

 

ENERGY STORAGE

There will be an improvement of working conditions for the distribution network through identified formal and technical criteria for connection and operation of energy storage. New regulations will be defined for energy storage by distribution system operators and their roles will be defined. The cooperation is also planned between system operators and users in terms of using the energy storage not owned by the operators. Operation of the network will take into account the time shift in the exchange of stored energy.

 

DATA MANAGEMENT

A smooth flow and optimal use of data will be ensured in daily operation of the network and in planning its development, as well as for the development of the electricity market. Metering will be one of the cornerstones for building a smart grid.

New communication channels will be created, together with space for data storage and processing. Metering will provide the basis for a modern, active management of the network and for the activation of energy market participants.

The operators will install and control the meters, becoming also the operators of measurements. Mass introduction of the remote meters to end users will be the basis for their activation. It is planned to provide metering services to 80% of end users.

 

 

EDITOR

Polish Power Transmission and Distribution Association
Wołynska 22, 60-637 Poznan
tel. +48 61 846-02-00, faks +48 61 846-02-09
e-mail: ptpiree@ptpiree.pl, www.ptpiree.pl