Poland’s power companies will have to sell all electricity they produce, except for green energy, on a power exchange to prevent further price rises, according to the energy ministry.
The firms, which are mostly state-run utilities, will be obliged to sell 30 per cent of their power output on the exchange.
The often small supply can translate into unexpected and pronounced price movements.
“I hope that increasing this obligation will stabilise wholesale electricity prices and will prevent their unjustified growth in 2019,” said Warsaw’s Energy Minister Krzysztof Tchorzewski in a statement.
The ministry said it asked the state-run energy providers to start selling their electricity in the exchange from Wednesday.
Power prices in Poland have jumped in the past few months due to rising coal prices, carbon emission costs and energy market watchdog is investigating the issue.
As a legacy from the Communist era, Poland generates most of its electricity from coal, but shrinking deposits, rising emission costs and EU pressure have prompted the authorities to look to cleaner sources of energy.
The proportion of coal in Poland’s energy mix fell by over 11 percentage points from 2005 to 2017, according to Joanna Maćkowiak-Pandera of Forum Energii (Energy Forum), a Warsaw think-tank.
Coal accounts for 78.4 per cent of Poland’s energy mix, down from 90 per cent in 2006, according to Forum Energii.
Maćkowiak-Pandera said Polish demand for electricity was growing at around 1.2 per cent a year due to various factors, including economic growth.
Renewables and gas had met the rising demand for energy, Maćkowiak-Pandera was quoted saying by broadcaster IAR.
Despite the relative decline of coal, Poland’s state-owned mining conglomerate PGG expects to mine 30.6 million tonnes of coal this year, chief executive Tomasz Rogala said, up from lower-than-expected production last year that triggered shortages and a rise in imports.
Rogala said Poland’s biggest coal mining firm posted a net profit of US$81 million for the first two quarters of this year, up from just US$1.7 million in the first half of last year.
Rogala said coal output reached 14.8 million tonnes in the first half of 2018, up 800,000 tonnes year on year.
Poland’s biggest coal mining firm produced around 30 million tonnes last year and booked a net profit of US$24 million helped by rebounding prices after recording a net loss in 2016.
Poland suffers for its coal dependency. Picture credit: Wikimedia