Additional auction

The additional auction on the capacity market is an additional mechanism designed to procure any missing capacity for a given delivery year, in case the system's requirements were not fully met during the main auctions. This auction takes place closer to the delivery year, allowing capacity contracts to be adjusted according to updated demand forecasts.

Key information about the additional auction:

Purpose of the supplemental auction:

• To fill gaps in contracted capacity due to changes in demand forecasts or the withdrawal of certain units from fulfilling their contracts.
• To provide greater flexibility for the system operator in capacity planning.

Timing:
Additional auctions are held shortly before the delivery year, typically about one year in advance.

Participants:

• Generation or storage units that did not participate in the main auction.
• New market participants who became eligible to provide capacity services after the main auction.
• Demand Side Response (DSR) units offering demand reduction during peak periods.

Auction mechanism:
The auction operates under rules similar to the main auction: participants submit price offers, and the transmission system operator selects the most competitive bids until the required capacity is secured.

Importance for the power system:

• Adjusting capacity reserves to current needs.
• Increasing market participation opportunities for new entities.
• Reducing the risk of capacity shortages during critical periods.

Impact on participants:

• An additional opportunity to secure contracts for units that did not participate in the main auction.
• Encourages new investments or faster integration of existing units into the system.

Difference between the main auction and the additional auction:

The main auction secures capacity several years in advance (3–5 years before the delivery year).

The supplemental auction is held much closer to the delivery year, making it possible to account for current needs and market changes.

In Poland, additional auctions are also organized by Polskie Sieci Elektroenergetyczne (PSE) and play a vital role in providing flexibility to manage capacity reserves within the system.