PKEE: The capacity market is not a support for coal

The capacity market is not a state aid dedicated to coal. This was proven by the latest decision by the European Commission – argues the representative of the Polish Electricity Association (PKEE).

We know the European Commission’s decision on the electricity capacity mechanism. It will have a price cap, and will admit various technologies. There is no provision that would preclude implementation of other regulations that Poland is concerned with. This refers in particular to the limitation of support by the capacity market for the capacity units emitting below 550g CO2/kWh. The limit may exclude the coal based energy sector, which drives the Polish industry, from the mechanism.

“I do not think that the decision by the European Commission would require amendments to the act. The Commission has in fact seen this document and it was consulted with Brussels” – points out Maciej Burny from the Polish Electricity Association.

“The decision is good from the point of view of the negotiations on the Winter Package between the European Parliament and the European Commission. In the document, the Commission notes that the capacity market will be technologically neutral, open to renewable capacities. It takes into consideration the ‘green bridge’ for capacities emitting below 450g CO2/kWh. This is an additional incentive for new build gas-fired capacity units to bid for the seventeen year long contracts, that is two years longer” – said the interviewee of BiznesAlert.pl. “When we were meeting the key MEPs, they lived deeply in the stereotype trumpeted by nongovernmental organisations and others opposed to the capacity market, that the capacity mechanism is a subsidy for coal. This is where the unfavourable position of the Parliament on the market regulation partly came from.

“The mechanism is clear from the point of view of the rules on state aid. Thus, it may not be treated as a way of subsidising the coal” – stated Mr Burny.

“The problem is with the fact that the decision by the Commission does not exclude the application of the Winter Package provisions that Poland is concerned with, that is the 550g limit. The decision does not eliminate this threat in any way. However, this is not a surprise to us. Right after its decision of 7th of February, the Commission has issued a press release that already included a paragraph not excluding such a limit. This is still an open issue and nothing changes here for Poland – stated the representative of the PKEE.

PKEE