Commission defends approval of Polish capacity mechanism

Karolina Zagrodna

19-Mar-2019

LONDON (ICIS)–The European Commission will stand by its decision to approve Poland’s power capacity mechanism in its existing form and is ready to defend it in court, a spokeswoman told ICIS on Tuesday.

The commission’s comment comes as the Polish power capacity market is facing a legal challenge on the basis that the scheme may break state aid regulation.

Tempus Energy, the demand-side response (DSR) provider mounting the challenge, said the scheme unfairly favoured fossil-fuel plants and had been approved by the European Commission without an in-depth investigation.

The DSR provider is now asking the General Court of the European Union to annul the commission’s decision and order an investigation.

The commission spokeswoman told ICIS it will defend its decision in court, if needed.

Meanwhile, Poland’s energy regulator URE and the grid operator PSE both declined to comment on the issue when contacted by ICIS on Tuesday.

The commission approved Poland’s capacity mechanism in February last year, confirming the measure was compatible with EU state aid rules.

Poland is expected to start mothballing and phasing out ageing fossil-fuel units after 2020, but capacity auctions are designed to stimulate investment in new capacity.

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