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A Message from the President of the Energy Regulatory Authority

Joining the European Union's common energy market creates new development prospects for the energy sector in Poland but it is also an incentive for significant changes in this field. The Polish government has succeeded in moving national energy legislation toward the energy market model existing in the EU. It has managed to initiate privatization and present for discussion amendments to the Energy Law, passed in March this year, which transpose EU's Directives into national legislation, paving the way for a competitive market. Firm decisions however, are not expected until the victorious political parties form a coalition government. 

 

Competition in the power sector is still hindered by long term power purchase agreements (PPA) which tie up about 50% of power production. In contrast, only 1,5% of energy generated in Poland is traded on the energy exchange which has been in operation for threee years. The present solution, which involves voluntary termination of the PPA contracts is now being debated in parliament. Although it is now a third attempt to resolve this problem, there may not be enough time to pass it into law before the forthcoming elections.

 

Another hotly debated issue at the moment is the extent to which generation companies can be allowed to consolidate their activities with distribution operators. Although in the past such vertical integration has been prohibited, the former government made a decision to draw up a plan of government-run consolidation. This move, welcomed by some market participants, mostly energy producers, has spurred oposition from others who believe it may slow down the process of building a fully competitive energy market in Poland.

 

I encourage you to visit our web site on a regular basis for more information about URE, as well as key issues and challenges facing the Polish power sector. We will keep you updated of all new developments in the months ahead.

 

29.05.2007

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