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Polish Briefing 15 October, 2020 9:30 am   
Editorial staff

Polish Briefing: Coal energy in Poland will not be competitive – Moody’s

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What goes on in Poland on the 15th of October.

Coal energy in Poland will not be competitive – Moody’s

Moody’s has published an analysis of seven energy markets in Europe, including Poland. It takes into account the assumptions of the draft Polish Energy Policy until 2040 and forecasts that wholesale energy prices will amount to PLN 220-260 per MWh. Moody’s earlier analysis of wholesale electricity prices in Poland was in the range of PLN 240-280 per MWh.

The report reads that the current prices of CO2 emission allowances remain above EUR 25 per ton, putting pressure on coal-based power units. The current wholesale price forecast is unable to take full account of these allowance prices due to increasing competition in the form of renewable energy and imports. The agency emphasizes that considering the high prices of carbon dioxide emissions, which continued even during the coronavirus pandemic and the increase in imports of cheaper energy to Poland, coal companies have lost their competitiveness “for good”. However, we read further that the restructuring of the energy sector and the potential separation of coal assets from coal companies may have a positive impact on the operations of Polish companies by improving creditworthiness.

The agency predicts that low gas prices will also put pressure on the production of energy from coal, because it is a transitional fuel and less emissions than coal. – Moody’s also forecasts that the structure of energy generation in Poland will not change significantly until 2025. It will only change with the inevitable process of individual coal blocks falling out of the system. In this context, the agency reminds about the support for the capacity market that will enter into force from 2021. – We expect 2025 to be a turning point for coal-fired power plants, as older plants will cease to operate, which will receive support from the capacity market by then, according to the date set by the European Commission, the report reads.



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