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Poland plans to curb electricity sales via power exchange to help coal industry

Poland wants to reduce power companies’ obligation to sell electricity via the power exchange TGE in order to curb energy imports that are hurting the domestic coal industry, the government has hinted.

Poland’s coal is the main source of electricity in Poland, dominating the country’s energy mix with a share of nearly 75%. At the same time, Poland’s huge mining sector – employing close to 100,000 people – is inefficient and loss-making while EU climate regulations and the rise of renewable power are limiting demand for coal year by year.

State-controlled Polish power companies have long turned to cheaper imported coal as they are themselves squeezed by the rising price of carbon dioxide (CO2) emissions, which the EU has a plan to all but eliminate by 2050.

Polish mining companies – which are mostly state-run as well – have also long demanded the state does something to curb coal imports so as to improve demand for domestic coal.

The mining unions are negotiating with the government a reform of the mining industry that would save jobs and at least slow down the decline of coal as Poland’s staple fuel. 

The idea to limit power sales through TGE came up last Friday after another round of talks. “The withdrawal from obligatory energy sales through the power exchange … will limit imports and increase its production in domestic power plants,” the state assets ministry said in a statement.

Experts are saying, however, that limiting power trading on the TGE can do little to limit energy imports to Poland as long as the Polish market is more expensive than neighbouring ones. Wholesale power prices were at PLN250 (€57) per megawatt-hour (MWh) in late 2019, compared to just PLN160 per MWh in Germany for example.