Polish Briefing 27 December, 2018 9:00 am   
COMMENTS: Mateusz Gibała

Polish Briefing: The government has a plan for raising prices of energy

What goes on in Poland on the 27th of December.

The government has a plan for raising prices of energy

The Prime Minister of Poland and the Minister of Energy presented the assumptions of the act, which is to stop the increase in energy prices in Poland.

– A few days ago, I announced that we will develop mechanisms to prevent price changes in 2019 and subsequent years. We keep our word – said energy minister Krzysztof Tchórzewski during a press conference with Prime Minister Mateusz Morawiecki.

As a result of climate policy and errors of our predecessors, there are indeed some mechanisms that push prices up, but thanks to the actions of our government, we keep our word and implement mechanisms that will keep them at the current level. There will be no increase in energy prices – he assured.

The government’s proposal presented by Prime Minister Morawiecki assumes a reduction of excise tax from PLN 20 to 5 and, hence, VAT on this part. – It costs less by about PLN 2 billion – the Prime Minister added. Another element is the reduction of the transitional payment by 95 percent. – We will get about PLN 1-1, 5 billion in this way – he said. The companies are also to save several hundred million PLNe on expenses, including marketing.

– The companies are in dialogue with the president of the Energy Regulatory Office. They will work out an agreement on this matter. The sum of all these assumptions is to lead to the fact that in 2019 there will be no increase in energy prices – Morawiecki assured.

HARMONY Link: An agreement on an energy connection between Poland and Lithuania

Today Management Boards/CEO’s of Polish and Lithuanian Transmission System Operators, PSE and LITGRID, signed Initial Cooperation Agreement, being the commitment of both TSOs to undertake development activities in the Preparation Phase of the project of construction of new Polish-Lithuanian submarine HVDC cable. Also today the Boards/Management teams decided name new interconnector as “HARMONY Link”.

The Initial Cooperation Agreement establishes the principles of cooperation within the Preparation Phase of the project. This phase encompasses set of activities which aim towards taking the so-called Investment Decision, following which the procurement for the construction of the “HARMONY Link” will be launched. In line with the current forecasts the Investment Decision should arrive in 2020.

“The cross-border energy infrastructure project agreement signed between Polish and Lithuanian partners today is yet another clear sign of political and professional accord of working hand in hand to help the three Baltic states gain full control of their electricity networks, operate under common and transparent European rules for the benefit of consumers and energy supply security,” said Miguel Arias Cañete, the Commissioner for Climate Action and Energy in the EU.

“Signing the Initial Cooperation Agreement is a result of several months of extensive works, which allowed to identify and plan the activities in the first part of the project. This work and the Agreement itself will form a solid foundation for the first part and subsequent successful implementation of the “HARMONY Link” says Mr. Eryk Kłossowski PSE’s CEO.

Mr. Davis Virbickas CEO of LITGRID adds „The agreement signed is the first-hand evidence of professional cross border co-operation based on common solidarity values with every effort made to bring to life this technically complex in secure and cost-efficient way by the targeted 2025 date”.

Initiation of the works on the “HARMONY Link” is directly linked to the Political Roadmap for synchronizing the Baltic States’ electricity grid with Continental Europe, the agreement signed on 28 June 2018 by the President of European Commission and Heads of State and Government of Lithuania, Latvia, Estonia and Poland.

The Political Roadmap assumed the technical solution for synchronizing Baltic States’ system by target date of 2025, consisting of the synchronization via the existing line between Lithuania and Poland (LitPol Link), complemented by a new undersea cable between Poland and Lithuania. The technical solution, after verification of the technical, financial and time-related preconditions received green light from High Level Group BEMIP on 14 September 2018. While the process of synchronization runs under the supervision of ENTSO-E Regional Group Continental Europe, the construction of the “HARMONY Link” will be a task of the PSE and LITGRID.