On the Tentative Award of a Polish Capacity Mechanism Auction for 2027 to Ignitis Gamyba
Source: www.gulfoilandgas.com 12/22/2022, Location: Europe
AB “Ignitis grupe” (hereinafter – the Group) informs that its subsidiary AB “Ignitis gamyba” (hereinafter – the Company) is to ensure the availability of 250 MW capacity in the market in 2027 for approx. EUR 16 million in accordance with the preliminary results of the Polish capacity mechanism auction for ensuring capacity availability in 2027 (hereinafter – the Auction) conducted by the Polish transmission system operator Polskie Sieci Elektroenergetyczne (hereinafter – PSE). This would have a positive effect on the results of the Flexible Generation segment of the Group.
The Group notes that the auction results are tentative and have yet to be officially approved by the Polish energy regulator (Urzad Regulacji Energetyki). The official decision should be made in January. After the official approval of the PSE Auction’s results, the Company is to sign a tripartite agreement between the Company, PSE and a billing operator Zarzadca Rozliczen S.A. regarding a commitment to supply electricity to the electricity network during a stress event using a specific unit. This is the first time in history where a bid of Lithuanian company won a Polish capacity mechanism auction.
This agreement will not restrict the Company’s facilities activities because the service will be considered to be provided if the Company’s facility providing the service will actually be generating electricity during a stress event in the Polish energy system or if it will have already issued an electricity sale order in the electricity market. Issuing orders in electricity markets is a common practice.