Energy Regulatory Office

https://www.ure.gov.pl/en/communication/news/376,Summary-of-UREs-activity-in-2023-How-the-Regulator-supports-the-accelerating-tra.html
18.07.2024, 04:35

Summary of URE’s activity in 2023: How the Regulator supports the accelerating transformation of the Polish energy sector

The President of the Energy Regulatory Office (Urząd Regulacji Energetyki, URE) has published a report summarising the Authority’s activities in 2023. Last year, as in previous years, was full of events leaving mark in the Polish and European energy markets, as well as major changes to their regulatory environment. For this reason, the latest edition of the report is likely to be of particular interest and provide the readers with a wealth of new data on the Polish energy sector.

In 2023, and especially in the second half of the year, the situation in the electricity and energy commodity markets started to stabilise. This was undoubtedly the result of a natural adaptation of market players to the economic and geopolitical situation created after Russia’s aggression against Ukraine, but also the result of anti-crisis measures taken by national and EU legislators. New directions for imports of energy commodities curbed the growth of prices and, subsequently, led to their noticeable decreases, which in turn resulted in the stabilisation of the prices of electricity, natural gas and system heat - notes Rafał Gawin, the President of URE

Stabilisation on energy markets

In 2023, prices of electricity and gas traded on the marked stopped rising. However, they still remained higher than before the energy crisis. For this reason, households and other vulnerable consumers in our country were covered by protective legislation throughout the year, which included capping the prices of energy carriers. However, the price freeze did not mean that the President of URE was released from the duty to approve the tariffs for the supply and distribution of electricity, gas and heat, as these served as a reference basis to calculate the compensation payable to energy companies.

At the same time, the Regulator continued to stress the need for discussion on restoring market mechanisms in the energy sector.

It is also worth noting that with more stable situation in the energy commodity markets, the number of proceedings pending with URE regarding tariff changes for heat generators decreased significantly. With 257 decisions on heat tariff changes approved in 2023, there was a reduction by 50 per cent over 2022.

 

Record budget revenues provided by the President of URE for another consecutive year

2023 was yet another year when URE contributed record revenues to the state budget totalling PLN 274 million, 154 per cent of the target and over PLN 70 million more than in 2022. Concession fees accounted for over 86 per cent of the revenue.

Fig. 1. URE’s transfers to the state budget in 2023.

In the context of the greatest challenges and directions of the climate and energy transition, one should note the substantial volume of support provided by the President of URE last year to renewable energy producers, the cogeneration sector, energy-intensive sectors, and under long-term contracts and the capacity market, which totalled PLN 18.6 billion.

Fig. 2. Volume of URE’s aid to companies

In addition, as part of the tariff proceedings, regulated revenues totalling PLN 92.2 billion were verified and approved for the largest companies involved in the transmission, distribution and supply of electricity, natural gas and heat. This amount is nearly PLN 6 billion lower than originally requested by the energy companies.

Comprehensive amendment of the Energy Law and the RES Act

The amendments to the Energy Law[1] and the Act on Renewable Energy Sources[2] introduce in the autumn were a development of pivotal importance not only in 2023 but over the recent years. They introduce or refine a number of instruments that will accelerate the development of renewable and local power generation, enable viable biogas production, and support the testing of new energy solutions.

At the same time, it is worth noting that both amendments imposed over 50 new tasks and powers on the President of URE, such as maintaining registers (of aggregators, direct lines, energy clusters, biogas producers), defining guidelines for network development and priority investments and supervising their implementation, as well as overseeing the testing of new solutions under regulatory sandboxes.

In this context, it should also be emphasised that URE designed and implemented comprehensive communication activities to inform about the new solutions and explain the changes introduced in the amended legislation and their implications for all market participants.

Charter for Effective Transformation – results

In 2023, URE continued to pursue its flagship project named the Charter for the Efficient Transformation of the Distribution Networks of the Polish Power Industry (KET), which brings together the largest distribution network operators in Poland.

We dedicated the past year to consultations on the Charter with a wide range of stakeholders, from energy consumer organisations to network operators and industry associations. This allowed, on the one hand, the identification of the most relevant problems related to the functioning and development of distribution networks, and on the other hand, the involvement of a broad spectrum of stakeholders in the efforts to find the solutions. And this is one of the primary objectives of this project - says President Rafał Gawin

The agreement has already produced tangible results in the form of an increase in network investment expenditure in the development plans of the five largest distribution companies presented for approval to the President of URE, which increased from PLN 42 billion in 2020-2025 to nearly PLN 73 billion in the plans for 2023-2028. Improvement is also evident in the actual implementation of investment plans, which exceeded 97 per cent in 2023 according to preliminary estimates.

Broad spectrum of URE’s activities

In the past year, the scope of the powers of the President of URE was expanded even further. It is currently defined in at least a dozen acts and in tens of national and EU regulations.

During the past year, the Authority conducted more than 2,700 proceedings to grant or amend a concession or a concession promise, as well as over one thousand proceedings concerning the approval or modification of tariffs and more than 1,600 dispute resolution proceedings .

The Regulator also initiated over 10,000 proceedings related to the mandatory reduction of electricity consumption in public sector organisations, required under the applicable legislation[3]. The Authority also initiated 18 thousand monitoring and controlling operations and processed nearly 12,000 complaints and requests.

Significantly, all these activities are being carried out with only slightly increased budgets and staffing zlevels at URE, which have increased by around 10 per cent and around 5 per cent, respectively, compared to 2022. The significant increase in the number of tasks and their complexity make the quality and timeliness of the activities carried out a real challenge for URE.

What was How did the activities of the Energy Regulatory Authority and the situation in the sectors regulated by the sector last year look in detail? All this information can be found in the latest URE President's Report (the Polish version only).


[1]  Act of 28 July 2023 amending the Energy Law Act and certain other acts (Journal of Laws of 2023, item 1681).
[2]  Act of 17 August 2023 amending the Act on Renewable Energy Sources and certain other acts (Journal of Laws of 2023, item 1762).
[3] Act of 7 October 2022 on special solutions for the protection of electricity consumers in 2023 and 2024 in connection with the situation on the electricity market (Journal of Laws of 2022, item 2127).

09.05.2024

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