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Energy sector data

How is the structure of electricity production in Poland changing? What emissions are involved? What are the prices of fuels? Here is a summary of the most important data about the energy sector. Updated every month. 

 

October 2022 - summary 

October, and especially its second half, was dominated by a calming of the energy markets. Electricity prices on the exchange declined dynamically - next-day delivery (RDN) continued the declines of last month, this time by another 26%. Next-year delivery quotes fell even more - baseload by 41%, and during peak hours by almost half (48%). In the context of the stock exchange, it is also important to note the drop in volume due to the lifting of the so-called exchange obligation. Total electricity trading in October was down 42% from the previous month and 74% from a year earlier. For the most liquid instrument (BASE_Y), the figures are -38% m/m and -74% y/y. 

Responsible for the price declines on the exchange were, on the one hand, the amendment of the Balancing Market Regulation, in which a maximum price was set, which naturally translated into lower bids on the exchange, and, on the other hand, the high temperatures in Europe (as for October), which reduced gas consumption for heating. Simultaneous near-fullness of Polish gas storage facilities and uninterrupted deliveries of LNG to the continent were also supporting price reductions. However, the return of high prices should be expected as soon as it gets colder, as can already be observed in the US market. 

Low (for times of crisis) electricity prices on the spot market were also supported by the relatively high share of renewable sources in production. Wind sources, thanks to very good conditions, recorded their best performance in 6 months. The situation was different in photovoltaics - due to high cloud cover and increasingly shorter days, production from these sources was the lowest in 8 months. Interestingly, low gas prices on the exchange caused a significant increase in production from gas sources - by 55% over the previous month. 

  • Average monthly power demand in October 2022 was 18.7 GW (0.7 GW less than a year ago), reaching a maximum of 23.1 GW.  

  • Electricity consumption was 14.2 TWh (3.3% less than last year), while production was 13.3 TWh (5.7% less year-on-year). 

  • Net electricity imports amounted to 0.9 TWh, or 6.5% of total domestic consumption. Last year, net imports amounted to 0.6 TWh. 

  • Electricity production from RES accounted for 21.6% of the generation mix, a share that increased by 3.2 p.p. from September.  

  • Fossil fuels accounted for the remaining 78.4% of electricity: hard coal 45.1% (6 TWh), lignite 26.4% (3.5 TWh), natural gas 5.2% (0.7 TWh), and other fossil fuels 1.7% (0.2 TWh).  

  • Among renewable sources, wind farms produced 13.4% of electricity (1.8 TWh - 61.9% of RES production), photovoltaics were responsible for 5.7% (0.8 TWh - 26.3% of RES), 0.8% came from hydropower (0.1 TWh - 3.9% of RES), and 1.7% from other renewables (0.2 TWh - 7.9% of RES).  

  • Emissions from the electricity sector were estimated at 9.62 million tons of CO2, 8% less than a year ago. 

  • Electricity prices on the exchange saw a sharp decline. The valuation of baseload delivery in each hour of the day next year (BASE instrument) fell by 41%, to 1069.40 PLN/MWh. The weighted average price of peak hour delivery contracts concluded in October (PEAK5) fell by almost half (48%) to 1421.69 PLN/MWh. In contrast, the valuation of deliveries on the SPOT market (RDN) fell by 26% to 654.89 PLN/MWh. 

  • The weighted average price of CO2 emission allowances (EUAs) on the primary market was 69.48 EUR/tCO2, almost the same as in the previous month. In October, Poland's budget received EUR 441.3 million from the sale of CO2 emission allowances on the primary market (EEX exchange). Since the beginning of the year, the amount is EUR 4.23 billion. 

  • The projected CDS (Clean Dark Spread) amounted to 485.32 PLN/MWh. 

  • The projected CSS (Clean Spark Spread), which is an indicator of the future margin for gas-fired power plants, was -430.49 PLN/MWh in October. Last October, it was -259.65 PLN/MWh. 

The chart shows the electricity generation mix in Poland, divided into different technologies using fossil fuels or renewable sources. The primary source of electricity is hard coal and lignite, but the share of natural gas and RES is still growing.

Knowledge of the structure of electricity generation allows for the calculation of carbon dioxide emissions from power sector. CO2 emissions are calculated using reference fuel emission factors adopted by the Forum Energii (lignite: 1065 kg/MWh, hard coal: 900 kg/MWh, natural gas: 450 kg/MWh).

The chart shows a comparison of monthly electricity consumption and production in the current and previous year. Seasonality is clear - total energy consumption is highest in the winter months.

In the long run, the consumption is influenced on the one hand by economic development (which results in the increase of consumption) and on the other hand by progressive efforts in the field of energy efficiency (which results in the decrease of consumption). 

 

The total load in the Polish power system varies between 10 GW and 25 GW. The average value illustrates the situation in a respective month. Observing the monthly minimum and maximum values, leads to a conclusion that the summer months are characterized by significant variability of load and high demand peaks around noon.

The chart shows a comparison of weighted average monthly prices on Polish Power Exchange. The Commodity Forward Instruments Market covers about 80% of the electricity volume traded on the Polish Power Exchange.

The two most important instruments relate to energy supply 24 hours a day (BASE) and 7:00 - 22:00 (PEAK5). The contracts are concluded with future delivery (max. 3 years). The vast majority of transactions on the exchange concern purchase of energy with supply in the nearest calendar year (n+1).

The graph shows Clean Dark Spread calculated on the basis of: BASE indexes with delivery in the next year (TGE Derivatives Market), coal prices (PSCMI1 index) and CO2 emission allowance prices (EEX primary market).

The Clean Dark Spread is the difference between the electricity price and the estimated variable costs associated with the production of electricity from coal (fuel and emission allowances). Clean Dark Spread is an indicator correlated with the margin of a power company, producing electricity from hard coal (in fact, it is necessary to take into account also transport costs, operating costs, incurred and planned investment costs, etc.). The analysis of the evolution of this value, together with the CSS, allows to estimate the current financial situation of electricity companies.

The graph shows Clean Spark Spread calculated on the basis of: BASE indexes with delivery in the next year (TGE Derivatives Market), natural gas prices (TGE Derivatives Market) and CO2 emission allowance prices (EEX primary market).

Clean Spark Spread is the difference between the electricity price and the estimated variable costs associated with the production of electricity from natural gas (fuel and emission allowances). Clean Spark Spread is an indicator correlated with the margin of a power company, producing electricity from natural gas (in fact, it is necessary to take into account also transport costs, operating costs, incurred and planned investment costs, etc.). The analysis of the evolution of this value, together with the CDS, allows to estimate the current financial situation of electricity companies.

The current situation in the power sector, hour after hour, can also be followed by looking at Forumetr

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