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An Experimental Analysis of Price Formation on the Polish Power Exchange

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  • Drabik Ewa

    (Warsaw University of Technology, Faculty of Management, Narbutta 85,02-524 Warszawa, Poland)

Abstract

The Polish energy market gained its competitive character in late 1990s. At that time in majority of European countries a new law was enacted (in Poland – in 1987), which enabled the creation of internal energy markets. The Polish Power Exchange has been functioning since the end of 1999. However, from the very onset it has constituted a vital component of under grounding liberalization of electricity market. Since it was created the Polish Power Exchange has served as a market mechanism for setting objective energy market price. Support and control of the Polish Financial Supervision Authority guarantee the security of concluded transactions. The spot energy market was created as the first one and has functioned according to the rule of the double auction. The model of Sadrieh will be used for the description of the auction rules applied to the spot energy trade on the Polish Power Exchange. Furthermore, an algorithm on the basis of which it is possible to forecast transaction prices is presented. The effectiveness of this algorithm will be compared with other traditional methods of forecasting transaction prices.

Suggested Citation

  • Drabik Ewa, 2015. "An Experimental Analysis of Price Formation on the Polish Power Exchange," Folia Oeconomica Stetinensia, Sciendo, vol. 15(2), pages 115-127, December.
    • Handle: RePEc:vrs:foeste:v:15:y:2015:i:2:p:115-127:n:8
    DOI: 10.1515/foli-2015-0039
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    References listed on IDEAS

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