Warsaw, 4 August 2015
Polish Power Exchange (TGE) Becomes a Member of the
European Multi-Regional Coupling (MRC) Market
Press Release

In July, the Steering Committee of the Multi-Regional Coupling confirmed full membership
of TGE in the MRC market
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TGE signed an Agreement on the Accession to the Multi-Regional Market Coupling Day
Ahead Operations Agreement (DAOA) which provides for the cooperation of 10 power
exchanges and 21 transmission system operators and is a prerequisite for TGE's
participation in the creation of a single European Market based on the model developed in
the course of the Price Coupling of Regions (PCR) Project

For TGE, the status of a MRC market member and the participation in the PCR Project mean
the opportunity for proactive and full involvement in regional market projects and the
implementation of EU electricity market mechanisms in cooperation with Western
European exchanges
Multi-Regional Coupling (MRC) is a pan-European project which aims to integrate spot electricity
markets in Europe and covers an area with electricity demand currently totalling approx. 2800 TWh
which accounts for 85% of the European consumption volume. Each day, around 4 TWh of electricity
worth approx. 150 million Euro is traded.
At the moment, there are two market areas operating under the Price Coupling of Regions model, i.e.
the MRC market, which covers virtually the entire European Union but for Central-Eastern and
South-Eastern Europe, and the market of four countries known as 4MMC (Czech Republic, Slovakia,
Hungary, Romania). Both areas apply very similar technical solutions which are ultimately to be
integrated, after the implementation of the CEE Market Project.
“Our activities aimed at active participation in the internal European electricity market are driven by
the growth strategy of TGE as a reliable and professional commodity exchange in Poland, and are
meant to enable successful operation of TGE as an energy exchange in the European market.
Following the entry into force of the so-called Network Code, i.e. the CACM Regulation on 14 August,
we are going to operate in a competitive environment. Our goal is to ensure that TGE is designated by
the Regulator to play the role of the national Nominated Electricity Market Operator – NEMO” - said
Ireneusz Łazor, President of the Management Board of TGE.
The Multi-Regional Coupling Market conforms to the requirements of the European Commission and
EU Regulators, and the implemented market model is treated as exemplary for the European DayAhead Market. Accordingly, the European Commission foresees that all the European Network
Operators and Electricity Exchanges will ultimately join the MRC market and will jointly carry out
cross-border trade in electricity by signing appropriate membership and operating agreements.
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The MRC consists in the implementation of the market coupling mechanism for cross-border dayahead markets, in cooperation with electricity exchanges and transmission system operators. In the
market coupling mechanism which combines the areas of operation of respective exchanges, a single
algorithm is used for the calculation of electricity prices with transmission capacity being
simultaneously allocated.
With the signing of the accession agreement for the Day-Ahead Operations Agreement and approval
of the accession by the MRC Steering Committee, TGE made a formal step confirming its full
membership in the MRC market in which the Exchange has physically participated since February
2014, i.e. since the day of its inception. This is also a consequence of the operation of the Day-Ahead
Market under the PCR MC model, in cooperation with Nord Pool Spot with respect to the cable
connection with Sweden called SwePol Link, since 15 December 2010.
The membership in the MRC market guarantees that TGE may directly take part in shaping the
development and operating processes and procedures of the market under the PCR model through
the participation of its representatives in the works of the Steering Committee and Working Groups.
TGE, in coordination with the Energy Regulatory Office and PSE, and with their support, decided to
apply for full membership in the PCR Project. The process is currently underway. Once all the
necessary agreements are signed, by the end of the year TGE will obtain full access to the assets,
materials and documentation constituting joint intellectual property of the parties to the PCR
Project. In order to exercise its rights as a full member of the PCR project and the MRC market
through achieving the status of an exchange coordinating market processes and terminating the use
of services provided by other exchanges, TGE is still required to fulfil specific technical conditions.
This process will be finalised in the second half of the year 2016.
Moreover, TGE, together with PSE, LitGrid and Nord Pool Spot, are currently working to launch a DayAhead Market for the interconnection with Lithuania, which is to be inaugurated in January 2016.
TGE is also involved in the process of building a PCR market in the Central and Eastern European
(CEE) region, which is expected to go live at the end of 2017 or in the beginning of 2018.
Market Coupling is a notion describing a market mechanism which while determining the value of electricity at different
areas of the European market covered by the mechanism simultaneously allocates transmission capacity at borders
between pricing zones (national electricity market) through an implicit auction, in a way that leads to maximised economic
efficiency. The market coupling allows to avoid the division between the trade in transmission capacity and the electricity as
such, thus mitigating the risk related to the existence of two separate business processes concerning the capacity and the
electricity. This should eliminate situations when transmission capacity remains unused despite the existence of pricing
differences between two markets.
Multi-Regional Coupling (MRC) is a pan-European project aimed at the integration of electricity markets in Europe. The
MRC consists in the implementation of the market coupling mechanism for cross-border day-ahead markets, in cooperation
with electricity exchanges and transmission system operators. The integration of wholesale market across Europe based on
the market coupling mechanism which will improve the efficiency of capacity allocation along interconnections between
the participating countries will be beneficial for all the European electricity customers.
In October 2013, 17 companies signed agreements which provided the legal framework for cooperation, and led to the
inauguration of the Day-Ahead Market for the North-Western European region based on the PCR Market Coupling model,
on 4 February of the following year. As of 13 May 2014, SWE marked was merged with the NWE market and a joint market
was created under the name of Multi-Regional Coupling (MRC), covering an area with electricity demand totalling 2400
TWh. The participants of the MRC market prepared the Day-Ahead Operational Agreement (DAOA) which defines the rights
and obligations of the parties. Currently, following the accession of Italy and Slovenia on 15 February 2015, DAOA provides
for the cooperation of 10 power exchanges and 21 transmission system operators. TGE has joined as an additional
participant of this group.
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Polish Power Exchange (TGE) was established at the end of 1999. It is the only licensed energy exchange in Poland. TGE
started its operations on 30 June 2000. The launch of TGE was one of the first steps towards the liberalisation of the Polish
electricity market and the privatisation of the power sector. Since February 2012 TGE has been a wholly owned subsidiary of
the Warsaw Stock Exchange.
TGE operates the following markets: electricity (Commodity Forward Instruments Market with Physical Delivery - CFIM, DayAhead Market - DAM, Intraday Market - IDM and gas market (CFIM, DAMg), as well as Property Rights Market. TGE is
currently one of the most rapidly growing commodity exchanges in the region. This is supported by the membership in
EuroPEX, an organisation which promotes the consolidation of energy markets through cross-border links, and gathers all
active power exchanges in Europe trading in both commodity and financial instruments. Since December 2010 TGE and Nord
Pool Spot operate joint day-ahead markets on a market coupling basis for the Swe-Pol Link between Sweden and Poland.
In 2014, the aggregate volume for all electricity markets operated by the Polish Power Exchange reached 186.8 TWh (up by
5.8% against 2013), of which the spot market (Day-Ahead Market and Intraday Market) accounted for 23.8 TWh (up by
7.05% comparing to 2013), and the Commodity Forward Instruments Market – for 163 TWh (up by 5.6% against 2013). For
the natural gas market, the overall volume totalled 111.6 TWh, which means that it grew almost 47 times comparing to the
2013 volume. The volume traded on the gas sport market (Day-Ahead Market for gas and Intraday Market for gas) reached
6.6 TWh (growth by 15 times against 2013), and on the Commodity Forward Instruments Market – 105 TWh (growth by 53
times comparing to 2013).
www.tge.pl
Media contact: Polish Power Exchange; [email protected], +48 885 885 645, +48 607 030 573
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