Poland Methodology

Modo Energy provides benchmark data for battery energy storage systems across global energy markets, applying a standardized methodology to ensure consistency and transparency across all produced Indices.

1. Introduction

The Modo Energy Poland Methodology Framework outlines the calculation and construction of Modo Energy's battery energy storage Indices in Poland. This document provides detailed insights into:

• the assumptions that define a representative asset;
• the components that make up published revenues;
• the optimisation model that simulates asset dispatch; and
• the data inputs and transformations that feed the simulation

to ensure accurate and reliable benchmarking for Poland's battery energy storage sector.

1.1 Why Poland requires a simulated index

The Modo Energy Poland Index is simulated, not measured.

Poland has no asset-level data regime for utility-scale battery storage. PSE publishes system-wide balancing prices, procurement volumes, and activated energy, but not per-asset schedules, acceptances, or settlement. Without asset-level metering disclosure, the revenue of an individual battery cannot be reconstructed from public data.

To produce a benchmark under these conditions, Modo Energy simulates the dispatch of a representative battery asset against publicly available Polish market data, using a mixed-integer linear programme (MILP) that optimises battery revenues subject to market participation rules.

1.2 What the Poland Simulated Index represents

The Modo Energy Poland Index family (the ME BESS PL Indices) represents the simulated revenue performance of grid-scale lithium-ion battery energy storage systems in Poland's wholesale and balancing markets. To capture differences in technical characteristics, the Index family includes variants grouped by system duration (2-hour and 4-hour). The indices are constructed to reflect revenues that a representative, well-run asset could earn, before site-specific grid fees, warranties, and operating costs.

Currency: revenues are computed in PLN. Published benchmarks are also presented in EUR/MW/year using a fixed PLN/EUR conversion.

1.3 Definitions

2. Index Construction

2.1 The ME BESS PL Indices

All indices are constructed using the same published methodology, with differences only in the duration parameter of the representative asset.

2.2 Representative BESS specification

2.3 Index calculation methodology

The Index is calculated by:

1. Running Modo Energy's optimisation model over the assessed period, using the representative asset specification in §2.2 and the input data sources in §4.2.
2. Computing the simulated revenue of the representative asset across each modelled market and direction, in PLN, at 15-minute resolution.
3. Summing revenues per settlement period and normalising by the rated power of the representative asset (50 MW) to obtain an Index value in PLN/MW per settlement period.
4. Aggregating these values into monthly and annual indices.

2.4 Index value representation

• PLN/MW (period): total Index revenue for the assessed period (e.g. PLN/MW/month, PLN/MW/year).
• EUR/MW/year (annualised): PLN/MW/year divided by the PLN/EUR exchange rate. Published PLN figures are already calibrated (§5.10), so no further calibration is applied in the currency conversion.
• Where a period value is converted to an annual figure, it is scaled by dividing by the number of days in the assessed period and multiplying by 365 (period value ÷ days in period × 365).

2.5 Publication cadence and revisions

The Modo Energy Poland Indices follow Modo Energy's standard benchmark governance. Index values are published on a regular cadence once launched, with a publication lag that allows settlement, late submissions, and backfills on balancing energy data to complete before the Index for a given day is computed. Previously published values may be revised if upstream providers issue corrections, if additional source data materially improves accuracy, or if a methodology change under §7 is applied. Revisions are logged with the affected period and reason and communicated in line with §7.3.

The benchmark history begins after the introduction of 15-minute day-ahead settlement in Poland, so a single 15-minute day-ahead granularity applies across the full assessed period. The only mid-history market change reflected is the PICASSO go-live (11 July 2025), before which aFRR activated-energy revenue is set to zero (§4.3).

3. Revenue Components

3.1 Revenue components included

The Modo Energy Poland Indices capture the primary revenue opportunities available to a representative BESS in Poland's wholesale and balancing markets.

FCR asymmetry. Polish FCR is asymmetric under the Warunki Dotyczące Bilansowania (WDB), PSE's balancing market terms and conditions. FCRG (up) and FCRD (down) are separately qualified, procured, and priced. The model holds independent FCRG and FCRD positions, each paid its own marginal price.

FCR is capacity-only. FCR is remunerated as an availability payment; it has no activation-energy product. The net energy a battery moves while responding to frequency is near zero and is not separately monetised in the Index. Providing FCR still requires an active operating point (see §5.4).

How FCR compensation is calculated. FCR revenue is the committed capacity in each direction multiplied by that direction's marginal clearing price, summed over the two directions and over the hourly periods in the window:

For each hourly period, the prices are the marginal FCR capacity clearing prices (PLN/MW/h) for the up direction (FCRG) and the down direction (FCRD), and the quantities are the committed FCR bands (MW) in each direction. There is no activation-energy term: FCR net energy is near zero and is not separately paid, so the availability payment is the whole of FCR revenue. The Index does not compute this formula as a separate step; FCR capacity revenue is captured within the co-optimised dispatch (§5.3).

Procurement. FCR and aFRR capacity are procured in hourly blocks by PSE, in a basic-mode balancing capacity market alongside a supplementary scheduling process.

3.2 Excluded revenues

Revenues from the following sources are excluded from the Modo Energy Poland Indices:

• Intraday (TGE continuous and auctions): not currently modelled; to be reviewed in a future methodology version.
• mFRR and RR (manual frequency restoration and replacement reserves): capacity and activated-energy payments are not currently modelled.
• Constraint redispatch compensation: activation of specific assets for local network-constraint relief is compensated separately on a cost basis and is asset- and location-specific; not modelled.

4. Data Inputs and Use of Discretion

4.1 Data visibility

The Modo Energy Poland Index is constructed exclusively from publicly available market data, with the exception of the representative asset parameters in §2.2 and the modelling parameters below, which are set by Modo Energy. The table lists each modelling parameter with its value, the reason for it and the section that defines it. Modo Energy's market owner for Poland, currently Alex Kelham, sets and maintains them (§4.3). The Index for a delivery day is computed only once every input in §4.2 is available for that day.

4.2 Data inputs and sources

4.3 Use of discretion

Modo Energy applies discretion strictly within predefined parameters, only where market data is incomplete or requires interpretation. For example, aFRR activated-energy revenue is set to zero before the PICASSO go-live date (11 July 2025). All discretionary decisions are made in accordance with the benchmark methodology and are reviewed when PSE publishes methodology changes. Judgment is used only when a parameter is chosen or changed, and the market owner makes that call. Every parameter sits in the code of Modo Energy's optimisation model, so a change is reviewed by a second person before release and is tested by the automated regression tests in §8.1.

5. Modelling Methodology

5.1 Overview

The Poland Index is produced by simulating the dispatch of the representative asset described in §2.2 against historical market prices, using Modo Energy's optimisation model, the same framework that underpins Modo Energy's Indices in other regions. For each day in the assessed period, the model determines how the representative asset would have scheduled its power across the markets in §3.1 to maximise revenue, given the physical limits of the battery and the rules governing each market.

5.2 What the model is solving for

Given the prices observed on a given day and the physical and regulatory limits of the asset, the model determines the highest revenue a well-run battery could have earned. It allocates the battery's power and stored energy across three families of opportunity:

• Wholesale energy — day-ahead energy.
• Reserve capacity — FCR and aFRR, where the battery is paid to hold capacity available for the TSO.
• Activated energy — aFRR activated energy, where the battery is additionally paid for the energy it delivers when called.

Revenue is the sum of these streams, net of charging cost. Internal consistency rules prevent schedules that look profitable on paper but cannot be executed by a physical battery (§5.4).

5.3 Optimisation sequence

Reserve capacity is procured the day before delivery and day-ahead energy clears alongside it; aFRR activated energy is settled close to real time. The model reflects this by solving in two sequential steps:

1. Day-ahead step — sets capacity commitments (FCR and aFRR) and day-ahead energy positions, at 15-minute granularity, with perfect foresight of day-ahead energy and capacity prices over the day.
2. Activated-energy step — determines aFRR activated-energy positions at 15-minute granularity. The day-ahead and capacity commitments from the first step are held fixed.

5.4 Market stacking and physical limits

Poland's market design permits a battery to hold simultaneous positions across day-ahead energy, FCR capacity, aFRR capacity, and aFRR activated energy, subject to physical limits on the battery and grid connection. The model enforces stacking through the following constraints:

1. State-of-charge headroom — separate inequalities for capacity products (FCR, aFRR) and activated-energy products (aFRR energy), so each physical limit is checked without double-counting.
2. Rated power — the sum of committed power in each direction is at or below 50 MW (and the grid limit).
3. Per-product bounds — internal modelling bounds on reserve size per direction. The WDB governs reserve size through the asset's own qualified range per direction, which is asset-specific; for a 50 MW asset the rated-power constraint already binds.
4. Opposite-direction limit — the offer in each direction is bounded by the unit's current operating setpoint, not its state of charge; reserve held in a direction cannot exceed what that setpoint and available power allow (§5.8).
5. Active operating point required for reserve — under the Warunki Dotyczące Bilansowania (WDB) a battery is a storage scheduling unit that declares a state each settlement period: idle, discharging, or charging. Reserve cannot be held from a 0 MW idle state: a unit must pick a direction whenever any capacity reserve is committed, as set out in §5.8. The model stands in for this with a minimum-throughput condition when any capacity reserve is held; this is a modelling device, not a market minimum.

5.5 Battery physical model

The representative asset is modelled as a single lumped battery:

• Round-trip efficiency of 88%, applied to charging flows: 1 MWh drawn from the grid stores 0.88 MWh of usable energy.
• Continuous state of charge: stored energy in each step equals the previous level plus charging (net of efficiency) minus discharging. Expected energy flows from activated ancillary products are included using activation ratios, so the model accounts for the state-of-charge movement from delivering on held capacity. FCR activation energy is near zero and contributes no modelled throughput, but FCR provision still requires an active operating point (§5.4).
• Cycling limit: total discharge throughput per day is capped at the daily cycling limit times usable capacity; both wholesale discharge and ancillary activation count toward it.
• Cell degradation is intentionally disabled to keep the asset's duration constant across the full history, preserving comparability across years.

5.6 Ancillary services: capacity vs activated energy

mFRR and RR are excluded. The battery stack is FCR plus aFRR plus aFRR activated energy only.

The 0.25 h FCR endurance value is a standard limited-energy-reservoir assumption. The Warunki Dotyczące Bilansowania (WDB) requires a provider to be able to activate FCR in an energy quantity corresponding to the procured capacity; the 15-minute endurance figure derives from the qualification criteria and the EU System Operation Guideline limited-energy-reservoir requirement.

5.7 FCR-specific rules

• Asymmetric FCRG / FCRD — up and down are separately qualified, procured, and priced under the Warunki Dotyczące Bilansowania (WDB), modelled as independent products, each paid its own marginal price. No symmetric coupling.
• Capacity remuneration — FCR capacity is procured mainly in the basic-mode balancing capacity market, alongside a supplementary scheduling process. There is no dedicated FCR activation-energy product in the Index.
• Active operating point — FCR can only be held from an active state, not from idle (§5.4).
• Hourly procurement blocks.

FCR compensation is capacity-only, with no activation-energy component; the revenue formula is set out in §3.1. This contrasts with aFRR, which adds an activated-energy payment on top of its capacity payment.

5.8 aFRR/FCR capability is coupled to the operating setpoint

In Poland, the reserve a battery can offer in each direction is assessed from its current operating setpoint, its scheduled charge/discharge output in that settlement period, rather than from its state of charge. This follows the Warunki Dotyczące Bilansowania (WDB) framework, which was designed for conventional and hydro units and measures reserve as directional headroom from the unit's baseline output. For a battery it is a binding constraint: holding energy in the pack does not, on its own, entitle the asset to offer reserve in both directions.

For a unit at operating point p (positive = discharging, negative = charging) with rated power P:

• Upward reserve available ≈ P − discharge setpoint (room to increase discharge or reduce charge).
• Downward reserve available ≈ P − charge setpoint (room to increase charge or reduce discharge).
• The two directions cannot both be offered at their full band — they share one inverter rating measured against the same baseline operating point.
• At a 0 MW (idle) setpoint the unit must choose a direction; because a credible provider cannot hold reserve while idling, a non-zero operating point is required whenever any reserve capacity is committed.

Worked example (illustrative 20 MW unit):

This coupling constrains how much of each direction can be delivered from the chosen operating point; it does not make the products symmetric. FCRG/FCRD and aFRRG/aFRRD remain separately qualified, procured, and priced (§5.7, §5.9). Without it, a simulated battery could earn full up and full down reserve simultaneously from an idle mid-SoC position, overstating aFRR capacity revenue.

5.9 aFRR-specific rules

• Capacity: marginal hourly clearing price from PSE, priced separately for up and down.
• Activation and state of charge: from the PICASSO go-live (11 July 2025), aFRR activation energy and its state-of-charge drift are represented through the activated-energy leg, so the same physical activation is not counted twice.
• Activated energy: from the PICASSO go-live, priced at the direction-specific balancing energy price (CEB). In each settlement period, activated energy in each direction is capped at the activation ratio — the share of procured reserve the system actually called (activated ÷ procured) — applied to the aFRR capacity band the asset holds in that direction. Tying activation to the held band ensures the asset is only activated on reserve it actually committed.

5.10 Revenue calibration

To bridge the gap between theoretical maximum and what a real fleet can earn, the Index applies a calibration factor interpretable as “percent of perfect.” Three residual gaps remain between real market conditions and a simulated revenue model:

• Foresight gap — within a step, the model sees within-window prices that a real trader does not know at gate closure.
• Availability gap — real assets are not available 100% of the time, due to outages, maintenance, and re-qualification.
• Execution gap — residual trading frictions and slippage are not otherwise reflected.

The Index applies a flat calibration factor of 0.80 to simulated revenues:

The 0.80 factor is applied to the modelled revenues that underpin the published Index, so published Index values are already calibrated. It is anchored to observed fleet capture in Great Britain, where asset-level disclosures allow a direct comparison between perfect-foresight modelled revenues and realised revenues, and is applied as a single scalar to preserve the internal revenue ratios produced by the optimisation. Any change to the factor follows the change process in §7.3.

6. Governance and Compliance

Modo Energy is committed to transparency, providing detailed explanations of calculation methodologies, revenue components, and benchmark updates. All key elements of the methodology are publicly available, so stakeholders can fully understand the benchmark's structure and operation. Transparency measures include:

• Publication of methodology documents outlining calculation processes and revenue components.
• Historical data updates to maintain accuracy and consistency.
• Advance notification of significant changes, with not less than 30 days' written notice before implementation (§7.3).
• Documentation of stakeholder feedback and responses, available on request by emailing team@modoenergy.com.

7. Methodology changes

7.1 Model versioning: the Stable Version

All published Indices, and any custom or virtual-asset indices derived from this methodology, are computed using a single designated version of Modo Energy's optimisation model (the “Stable Version”), regardless of when an index was created. Modo Energy updates the Stable Version no more than once per calendar quarter. Market structure changes outside Modo Energy's control (e.g. new products, gate-closure or granularity changes) may require an update ahead of this cadence.

7.2 Review and update process

The methodology undergoes a structured review process to ensure it remains aligned with evolving market conditions and regulatory requirements. Reviews are conducted:

• Upon identification of material changes in market conditions or data availability (e.g. changes to PSE balancing market products or procurement rules, incorporation of new revenue streams such as intraday or mFRR, or changes to PICASSO aFRR settlement).

Direct back-testing against observed transaction data is not possible because per-asset revenue is not publicly disclosed in Poland. Instead, Modo Energy applies an 80% capture rate (§5.10) inspired by actual fleet performance in markets where both perfect-foresight modelled revenues and realised asset earnings are observable (e.g. Great Britain).

Each review follows a documented approval process, ensuring updates are thoroughly evaluated before implementation.

7.3 Notification of changes

Significant methodology changes are communicated to stakeholders in advance of implementation. A Stable Version update is material where the cumulative movement in the Index across all Stable Version updates in that calendar quarter would exceed ±2%. Material updates are announced with not less than 30 days' written notice before implementation, together with an impact analysis. All methodology changes are recorded in Appendix I to maintain historical comparability and transparency.

Other changes are non-material. They may be made without prior consultation and are disclosed as soon as practicable.

Emergency changes needed to protect the integrity of the benchmark or to comply with law may be made without prior consultation, with notice given as promptly as circumstances permit.

7.4 Recalculation and result versions

When a Stable Version update is implemented, Index values for the preceding 365 days are recalculated under the new Stable Version. Only the current version of results is available at any time.

8. Consistency and continuity

8.1 Quality assurance

• Automated validation checks to identify discrepancies in input data.
• Automated regression tests on every change to the model.

8.2 Data integrity

• Secure data management, including access controls and regular backups.
• Clear traceability from raw source (PSE, ENTSO-E) into the model feed.

8.3 Handling data quality issues

1. Verification: when data quality issues are identified, they are confirmed with the upstream data provider.
2. Customer communication: customers are informed of confirmed issues and corrective actions taken to maintain transparency.
3. Data unavailability: where a provider cannot supply required data, customers are notified of impacts and the Index is published once finalised data is available.

8.4 Traceability and verification

• Comprehensive records of input data, model version, and calculation outputs.
• Reproducibility: every published Index value can be reproduced from the archived input data and the model version in use at the time of publication.
• Public disclosure of material methodology changes.

9. Limitations

The Index is a simulation. These are its main limits:

• Simulated, not measured. It shows what a representative asset could have earned, not what any real battery earned. Per-asset revenue is not public in Poland, so the Index cannot be back-tested against real results (§7.2).
• Foresight. The model knows day-ahead and capacity prices when it decides, and co-optimises products that gate at different times in live operation (§5.3). The 0.80 calibration factor that corrects for this comes from Great Britain; it has not been observed in Poland (§5.10).
• Thin balancing markets. Polish FCR and aFRR volumes are small relative to the operating and pipeline battery fleet. The Index assumes the asset's bids would not move clearing prices and are always accepted in full.
• aFRR activation. The activation ratio reflects how much of procured aFRR PSE called, so it represents an average provider. A real asset's activation depends on its own bid prices (§5.9).
• Concentrated inputs. All balancing data comes from a single source, PSE. An error or change at that source flows into the Index (§4.2).
• One asset design. 50 MW, full grid connection, no grid fees and no degradation (§2.2). The revenue streams in §3.2, such as intraday and mFRR, are not included.

Appendix I — Methodology changes

Methodology changes since first publication will be tracked here. Version numbers correspond to Stable Version updates of Modo Energy's optimisation model (§7.1).

Disclaimer

This document, including the methodologies and indices described herein, is the proprietary work of MODO ENERGY LIMITED (“Modo Energy”) and is provided solely for informational purposes. These indices are designed for use in financial analysis, benchmarking, and decision-making. They do not constitute investment advice or a recommendation regarding any specific financial instrument, asset, or strategy.

While Modo Energy strives to ensure the accuracy, reliability, and transparency of the indices and methodologies, all information is provided “as is”, without any express or implied warranties, including but not limited to warranties of merchantability or fitness for a particular purpose. Users should be aware that the indices are derived from publicly available market data that may be subject to revisions, delays, or inaccuracies, and that the Poland Indices are simulated from a representative asset rather than observed from underlying transactions. Past performance is not indicative of future results, and external factors such as regulatory changes, market conditions, and asset-specific characteristics may impact index performance.

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