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Polish Briefing 21 March, 2019 9:00 am   
Editorial staff

Polish Briefing: The dispute over the capacity market in Poland will not be resolved quickly

What goes on in Poland on the 21st of March.

Grzyb: The dispute over the capacity market in Poland will not be resolved quickly

Last week, the British company Tempus announced the appeal to the Court of First Instance in the Court of Justice of the European Union (CJEU) of the decision of the European Commission approving the capacity market in Poland. In an interview with BiznesAlert.pl a Member of the European Parliament, Andrzej Grzyb, argues that this is a threat to the power mechanism used in our country, so it is worth examining a similar solution regarding Great Britain in detail.

According to the British Tempus Energy company, the Polish capacity market favors coal and gas generation, discriminating against limiting energy on demand (DSR). According to Tempus, were allowed to enter the Polish capacity market. At the same time, they can obtain only one-year contracts, which in Tempus’ opinion is discriminatory, and the largest and and fossil fuel generation receives the largest profits. The proceedings are now pending before the Court of First Instance. In the past, the British company became famous, among others because it blocked the capacity market in the UK.

– In the case of the United Kingdom, the proceedings before the Court of First Instance of the CJEU lasted almost four years. It can not be ruled out that this will also be the case in Poland. However, if the appeal proceedings in the CJEU in the British case had ended earlier, its resolution would affect the final decision of the Court of First Instance. It may turn out that the Polish capacity market will not suffer as a result. However, if the CJEU confirms the decision of the Court of First Instance, a similar situation may occur as in the British market – said MP Grzyb.

In his opinion, until there is a decision of the Court of First Instance, there will be no need to suspend the provisions regarding the Polish capacity market. – You can always appeal from the judgment of the Court of First Instance, as the European Commission has done on the British issue – said the interlocutor of BiznesAlert.pl. He added that for the time being there is no full access to the application submitted by Tempus.

According to the assumptions, the capacity market is to provide financial support for energy companies that will receive them for their readiness to deliver and provide power supplies when there are power balance problems. The energy consumers who will thus contribute to investments in the energy sector will pay for this readiness. The auction is won by those units that offer the lowest cost of delivery. At the same time, their technological neutrality is an important criterion of the capacity market. Capacity contracts are granted for a year, 5 and 15 years, respectively. In the first case, they relate to existing installations, in the remaining respectively: modernized and new units.