The big freeze in energy prices. “The determination of the rulers exceeded our expectations.”

Marcin Orlikowski, owner of a bakery in Lublin, is closely watching what is happening in the energy market. Recently, he received offers from sellers for the next year, reaching up to 2.5 thousand. PLN per Megawatt-hour (MWh) of energy. Therefore, seeing the corporate rate freeze to PLN 785/MWh seems to be a last resort from a business disaster.

– If this idea worked, it would be a great help. The offers for sales of electricity that have recently appeared on the market have been so high that many companies will simply close – comments Orlikowski.

However, this does not mean the end of the entrepreneur’s concerns. – 785 PLN definitely less than 2.5 thousand. PLN, but it’s still double what we’ve paid so far. Sure, it’s better to pay twice as much for electricity than five or six times as much, but it’s still very expensive – confirms the bakery owner.

Maximum energy price set at PLN 785/MWh for MSMEs (employing up to 250 employees) It is the latest government proposal. For comparison, in the second quarter of 2022, the average selling price of electricity in the competitive market was about 472 PLN / MWh (data from the Energy Regulatory Office).

The average selling price of electricity in a competitive market includes energy sales by producers and trading firms in the wholesale market.

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In 2023, end-user prices were much higher Because of record rates in the wholesale market in annual contracts. In September, a megawatt-hour of energy with next year’s delivery on the Polish Energy Exchange cost an average of PLN 1,781 and PLN 79. In August, at its peak, the rate exceeded 2.5 thousand. PLN/MWh. However, in recent days, prices have fallen to almost 1000. zlotys.

Electricity prices on the Polish Energy Exchange for delivery in 2023 (PLN / MWh)

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TGE

According to the Ministry of Development and Technology, a large number of entrepreneurs will be able to benefit from the maximum electricity tariff. – The solution will reduce electricity price increases for small and medium-sized enterprises by up to 70 percent. It will take care of about 99 percent. Polish companies – The Ministry of Development reassured us.

Dynamic and profound changes

The government’s latest ideas surprised experts who did not expect such a large state intervention in the market. Evaluation of subsequent ongoing legislative proposals energy crisisarguably two tracks – notes Krzysztof Mazursky, director of the portfolio management division of Energy Solution, which deals with advisory activities for electricity consumers.

It shows that, on the one hand, government actions led to the reorganization of electricity valuations in the wholesale market within POLPX (the contract for 2023 recorded a decrease from 1.8 thousand PLN / MWh to 1,000 PLN / MWh in just a few sessions). on the other side Maximum prices for many audiences are shown much lower than recent market ratings.

– Groups covered by protection today include customers in the G tariff (households – ed), small and medium-sized businesses and sensitive customers. There have also been proposals for local governments that are very different from the recent sales proposals generated by TGE’s wholesale prices – From the offering price level of about 2.3 thousand PLN / MWh to the proposed 785 PLN / MWh in two weeks. The changes are dynamic and profound, to which the market must quickly adapt – Mazursky claims.

– In our opinion, wholesale market reform will quickly open up the retail market, but the determination of the rulers has exceeded our expectations – He adds.

Other help for families

Households will pay a lower price for energy next year. Parliament has already passed a law Freezing prices for this group of consumers at the level from 2022, but only until a certain limit of energy consumptionHe is two thousand. kilowatt-hours per year. The upper limit reaches 2.6 thousand. kWh, it will cover people with disabilities, while the ceiling reaches 3 thousand. kWh – people with large family energy, farmers.

The rules for using the price of electricity in 2023 at the level of the current year and electricity allowance.

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Until now, the big unknown has been what electricity bills people who do not fall within the established limits will pay. If they had to pay the market price, they would spend a fortune on energy. According to analysts, without state intervention, the energy-selling tariff for households could triple in the next year. Today, the tariffs of the largest retailers are around PLN 0.41 / kWh.

while The government is now suggesting that after exceeding the cap, families should pay a maximum of PLN 693/MWh, which is about 0.69 PLN/kWh. This means a 70 percent increase. Against tariffs approved by the ERO President for 2022.

However, let’s remember that It only concerns the price of the energy itself, which is only half of the total electricity bill. In addition, there are a number of fees, including distribution and for example. energy chargesThanks to this, we pay the power plants for their readiness to operate and thus maintain the energy reserve in the power system at a safe level.

The Polish smog alert indicates that there are people, including residents of Krakow housing, using up to 9,000 people. kilowatt-hours of energy per year. If we assume that such a person now pays PLN 0.41 / kWh for electricity alone, he will spend a total of PLN 3,690 for this purpose this year. If we apply the maximum rates for next year, then this amount will increase to 5650 PLN. However, this person will be able to take advantage of Allowance for people using electric heating in the amount of 1.5 thousand. zloty.

What will the big companies get?

Therefore, the government planned a price freeze for households, micro, small and medium businesses, sensitive entities (such as schools, hospitals, nurseries), and local governments. What about the big companies? According to the Ministry of Development and Technology, this group of beneficiaries will be covered A special aid program targeting institutions whose activities are at risk due to the sharp increase in electricity prices. This program will be approved by the Council of Ministers.

– Law signed by the President on October 10 on the principles for the implementation of business support programs in connection with the situation in the energy market in 2022-2024 It will help entrepreneurs maintain business continuity. This year the government still wants to allocate more than 5 billion PLN for this purpose – Sponsored by the Ministry of Development.

He explains that some Polish companies, such as the ceramic or steel industry, are already forced to suspend or restrict production due to rising energy prices and deteriorating profitability. These are often large companies that are important employers in local labor markets. The law will help them stay in the market and prevent possible layoffs MRiT’s press services are compelling.

Echo Richards

Echo Richards embodies a personality that is a delightful contradiction: a humble musicaholic who never brags about her expansive knowledge of both classic and contemporary tunes. Infuriatingly modest, one would never know from a mere conversation how deeply entrenched she is in the world of music. This passion seamlessly translates into her problem-solving skills, with Echo often drawing inspiration from melodies and rhythms. A voracious reader, she dives deep into literature, using stories to influence her own hardcore writing. Her spirited advocacy for alcohol isn’t about mere indulgence, but about celebrating life’s poignant moments.

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The big freeze in energy prices. “The determination of the rulers exceeded our expectations.”

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