Łukasz Bondaruk | In Principle

The end of last year abounded in new regulations in Poland governing the electricity market. There was also a lot of talk about the need to amend questionable regulations. But the changes are so numerous it is hard to predict their ultimate impact on the market and specific market participants. This is particularly evident in the case of generators of power from renewable energy sources benefiting from the auction support system.

On the Polish energy market, the recent months will be remembered for many reasons. Historically high electricity and natural gas prices have forced changes to a number of established practices. During the crisis, several mechanisms have been created to mitigate its effects—primarily high utility prices. Among other things, a cap on the price of electricity sold to selected end users is being introduced. We now briefly examine whether the Act on Emergency Measures to Restrict Electricity Prices and Support Certain Consumers in 2023 is likely to live up to its name.

The situation on the energy market has never been so dynamic. Many claim that high energy prices will not allow economic growth to be sustained, and will lower consumers’ standard of living. It would seem that at least generators of electricity from renewable energy sources are happy about the higher energy prices on the market, as they can sell power for more while keeping production costs relatively low. But when these producers participate in the RES auction support system, their situation becomes more complicated than it might seem at first glance.

Over the last few months, the natural gas market in Poland and Europe has been affected by historic price fluctuations, and the situation in Ukraine demands attention to the continuity of gas supplies from abroad. In the context of ensuring security of gas supply to end-users, we point to the potential for introduction of restrictions on natural gas consumption.