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Poland backs exchange trading for generators

03 Dec 2009 00:00:00 | edem

Poland’s parliament has passed an amendment to the country’s energy law that could see activity on the Polish Power Exchange (PPX) significantly increase in just over a year.

Parliament voted almost entirely in favour of a motion to make exchange trading mandatory, with only one parliamentarian abstaining.

If the bill is approved by the senate next month, Polish generators that have been receiving compensation for prematurely ending their long-term power purchasing agreements (PPAs) will be forced to sell all of their power either through public tender, an internet trading platform or PPX (see EDEM 27 August 2009).

Following an investigation by the EU Commission, Poland’s producers were forced to end their PPAs by April 2008, to conform to EU competition regulation. Those that voluntarily cancelled their PPAs before the deadline received compensation for doing so.

Regardless of the PPA clause in the energy law amendment, Poland’s four state-owned power companies – PGE, Enea, Tauron and Energa – will also be expected to sell a proportion of their power through tender or through the PPX, the bill states.

The latest expectations are that these companies will have to sell 30% of their power through open means from 2011, rising to 40% a year later. By 2013, 50% of all power generated would be sold either through PPX or at auction (see EDEM 13 May 2009).

Furthermore, almost all generators, regardless of ownership, will have to sell 15% of their power in the same manner. The government had wanted this to be 20% of all production, however. Renewable and co-generation production will be the only exceptions.

The mandated public trading is designed to make the Polish market more transparent and to minimise preferential trading – whereby producers and distributors within one power group agree on a favourable price that is not market-related. The amendment to the energy law is also expected to increase market liquidity. TMM

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