Record energy prices in Poland and for now it seems the sky's the limit

Energy prices in Poland are going one way: up! The sale of energy contracts on the Polish Power Exchange has started. The price of a megawatt hour is several times higher than last year.

On Monday, the purchase prices of energy with delivery for next year exceeded PLN 1,200 per megawatt hour. In the most popular contract, 1 MWh for 2023 had to be paid PLN 1,243. In 2021, about PLN 360 was paid for the same contract.

The prices on the spot market are also exceptionally high. Under the TGeBase contract for a megawatt hour, you had to pay PLN 1,590 on Tuesday morning. In May, the average price for this contract was around PLN 660.

Energy prices are rising

According to Tuesday’s Rzeczpospolita daily, the prices of energy contracts have been rising since Gazprom limited gas transport to Europe via the Nord Stream 1 gas pipeline. Gas is the basic raw material for energy production in Western Europe, which is why price increases on energy exchanges have affected the entire continent. Also Poland, where energy produced from coal is still cheaper.

However, high prices are not only the effect of limited gas supplies. They are driven up by concerns about the availability of coal for the upcoming heating season and high raw material prices.

Zero reserve

A record level of prices was also recorded on Monday by the balancing market, that is the one where the missing energy is purchased, which had not been previously contracted. July 4, between 18 and 19, a megawatt hour bought in this way cost almost PLN 2,500.

Where are the prices coming from? This is one of the effects of very low inventories. Reserve power, according to “Rzeczpospolita” on Monday at 19 was around 0 megawatt hours.

The high prices were also influenced by the shutdowns of coal-fired units, which took place, inter alia, in Opole and Kozienice Power Plants. Almost half of all available power was excluded from current work, therefore Poland was a gross energy importer throughout Monday.

Source: Wprost


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