Position of the Polish Electricity Committee on the outcome of the negotiations concerning the draft Directive on common rules for the internal market in electricity and the Regulation on the internal market in electricity

The Polish Committee for Electrical Energy (PKEE) welcomes the following information on the conclusion of negotiations on the provisional agreement on the final texts of the The "Clean Energy for All Europeans" package (the so-called Winter Package), which are necessary for the full implementation of Energy Union. The achieved result is a result of a long series of talks between representatives of the European Parliament, European Commission and Council of the European Union. PKEE was an active participant of discussions and debates concerning the agreed documents, which took place in Brussels and in other European capitals

New legislative solutions will ensure synergy the power market with renewable energy sources. For countries such as Poland this should translate into the strengthening of energy security and certainty of energy supply. The Polish power market is technology-neutral and compatible with rules for granting state aid, as confirmed by the European Commission in its decision notifying the Polish power mechanism in February 2018. Moreover, it provides an increase in demand-side customer engagement (DSR). demand side response), as confirmed by the recently resolved auctions.

As the Polish power sector continues to reduce its emissions through increased energy efficiency and a move towards renewables (including offshore wind and photovoltaics), we applaud the efforts of the co-legislators to prepare the market for the integration of a growing share of RES. Moreover, the agreed form of the Directive includes the implementation of price comparison tools, smart meters and contracts based on dynamic energy prices, which can be understood as greater flexibility for the market and better protection for consumers.

One of the important issues to be negotiated is standard EPS 550 contained in the Draft Order, which limits the ability of high-carbon generating units to receive compensation under capacity mechanisms. Establishing a standard introduces ambiguity between energy and environmental regulations. The overlapping policies have no positive consequences for the CO and electricity generation. This opinion was rightly shared by the Rapporteur of the Ordinance. According to PKEE, this aspect should be taken into account during the process of planning the next the reform of the ETS

The Commission clearly stated in its recent aid decision accepting the Polish capacity market that without the capacity mechanism, the security of power supply in Poland would be threatened. Therefore, the importance of confirming protectionvested rightsin the energy sector. The application of the principle of legitimate expectations is fundamental in long-term investments, we therefore welcome the inviolability of power agreements entered into prior to December 31, 2019.

It is worth noting that existing power plants (except for multi-year contracts concluded before the end of December 2019) are entitled to derogation from the EPS 550 cap until 1 July 2025, whereas the restriction in question will concern new units, which started commercial generation after the regulation came into force. We believe the time constraint to be a huge challenge for the Polish power sector. According to PKEE, it is only a short-term solution as it leaves less time for modernization and construction of new sources to ensure energy security and to decarbonise the sector.

It should also be noted that the negotiators reached agreement on a clause A Just Transitionto facilitate action by Member States in ensuring a carbon-neutral future for coal-dependent regions. However, financial support is to be determined in the forthcoming negotiations The Committee on the Multiannual Financial Perspective for the period 2021-2027, including the structural and cohesion funds.

According to the results of the study ("Decarbonisation Pathways") made by EurelectricTo put the Polish power sector on a path towards full carbon neutrality in 2045, costs would need to be incurred at a level of EUR 147 billion of the total investment in generation resources alone. These calculations do not take into account stranded costs, which would certainly further increase the level of these outlays.

The total cost of transformation may be even higher due to the additional operating costs associated with the price of CO2. It is estimated that the total costs indicated could amount to EUR 68-85 billion depending on the reduction scenario adopted.

Content The Regulation and the Directive will be subject to further analysis and market impact assessment. The findings of both documents will be formally adopted by the European Parliament and the Council before European elections


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