Electricity for companies is becoming more expensive? Economists judge

Last year, the magnitude of the energy crisis was limited thanks to government support and a mild winter. The decrease in gas consumption by 16-17 percent also helped. Gas is currently making a comeback, also for the production of electricity. According to data from Polskie Sieci Elektroenergetyczne, energy production from gas increased by almost 27 percent between the beginning of the year and the end of July. Every year. This means that next year there will not be such a big drop in consumption as the year before.

“Currently, the situation is relatively stable. The average electricity price this year is less than 600 złoty, gas prices on the Dutch gas exchange (TTF) – close to 30-40 euros/MWh – said Leszek Kąsek, senior economist at ING Bank Śląski’s Macroeconomic Analysis Office. A year has passed since the wholesale electricity market anomaly on the Polish power exchange.

– At the time, prices were above PLN 1,800 per MWh due to the war in Ukraine and the explosion of gas prices in Europe – Kąsek recalls.

Uncertain energy prices

The current calm of the situation may be optimistic, but it is difficult to predict how the situation will develop further. Economists point to high price volatility. In the autumn and winter season, periodic price increases cannot be ruled out. Prices for the coming year are estimated on the basis of long-term contracts, which still make up about 60 percent. basis for contracting for the following year. Currently, the legal maximum price after the last government reduction for small and medium-sized companies is PLN 693 per MWh. Marcin Kujawski, senior economist at BNP Paribas, calculates that energy prices on the day-ahead market on the Polish energy exchange have fluctuated around 500-600 PLN/MWh in recent weeks.

“If we look at the cost of purchasing coal on the world market, which is clearly lower than the prices of domestic raw materials for local power plants, we can expect electricity generation prices to fall slightly in the coming months,” said Kujawski.

Possible increase in electricity production costs

Kąsek is less optimistic about the situation and points to the risk associated with huge investment needs in the energy sector itself and in transmission and distribution networks.

– It is difficult to assume that coal prices for Polish power plants will fall next year, if they do not occur now – he stressed. He notes that, according to ING, average TTF prices next year will be 20 percent higher than this year.

– On the other hand, the price of emission allowances (90 euros) is more likely to increase in the long term, although fluctuations are possible depending on the state of the EU economy. In such a scenario, I expect wholesale energy prices in Poland to increase by about 5-10% by 2024. added the expert.