March 2024 with the highest curtailment of electricity production from RES units ever. Due to insufficient flexibility of the NPS, 44 GWh from photovoltaic farms did not flow into the grid

Production from renewable energy sources  

In March 2024 26.9% (8.9 TWh) of electricity produced came from renewable sources. This is 4.9% less than a year ago and 3.6% less than in February. 

Just over half of renewable generation came from wind farms - 2.1 TWh. This is 10.6% less year-on-year and ¼ less than February this year. However, onshore wind power is playing an increasingly important role in the system due to the steady increase in its generating capacity (+12.9% in January 2024 compared to January 2023). 

The second place in production from RES sources was taken by photovoltaics in March with 1.0 TWh, an increase of 160% year-on-year. PV installed capacity increased by approximately 36% between January 2023 and January 2024. 

Biomass installations produced 0.5 TWh in March, while hydro produced 0.3 TWh. 

Non-market reductions in production from RES 

March this year saw the largest ever non-market curtailment of RES source operation. As a result of the redispatch of generating units, 44 GWh produced by large photovoltaic farms did not enter the grid. The redispatch occurred during days in March. 

Curtailment, i.e. the forced curtailment of electricity production by the transmission system operator (PSE), has so far only been introduced for balance reasons (i.e. too much electricity production in relation to consumption and storage and export capacity) and not for network reasons. The curtailment of the operation of sources is aimed at preventing the loss of regulatory capacity of the national electricity system (NPS) and the consequent deterioration of network security and stability parameters. 

The graph shows the cumulative annual values (from the beginning of the year to the last day of the reported month) of non-market redispatch (so-called curtailment) of electricity from wind and solar farms.

It is worth noting that the volumes of RES capacity cut from the grid would be lower if conventional sources of electricity - coal- and gas-fired power and CHP plants - were more flexible (i.e. had lower technical minima and could switch off/on more quickly). If more electricity storage facilities were connected to the Polish NPS, and if flexible demand, capable of increasing consumption at low electricity prices (which occur at times of high RES supply), e.g. electrolysers or heating equipment charging heat stores, were used. 

Production from fossil fuels 

In March 2024, electricity generation from conventional sources relied more heavily on natural gas than a year ago. Gas-fired power plants produced 1.8 TWh (up 7.3% year-on-year). Production from hard coal also increased by 2.2% compared to last year. However, the share of hard coal in the generation mix fell by 7.5% y-o-y to 5.8 TWh. Currently, the combined share of hard coal and lignite in electricity generation is 58.5%. 

Pumped storage power plants supplied 0.13 TWh.

 The graph shows the electricity generation mix in Poland by 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 continues to grow. Depending on the season, wind power or photovoltaics provide the most energy among renewable sources. 

Emissions, demand and imports 

missions from the electricity industry in March 2024 fell by 2% from last March (or 0.2 million tonnes of CO2) to 8.2 million tonnes ofCO2. This was the March with the lowest emissions in the last decade. 

Electricity demand last month was 14.4 TWh, with a maximum average hourly demand of 24.4 GWh/hour. The import balance was small at 0.4 TWh, or 2.6% of the month's demand. 

March 2024 - details 

• The average monthly power demand in March 2024 was 19.4 GW (0.6 GW less than in March a year ago), reaching a maximum of 24.4 GW (minimum - 11.9 GW). 
• Electricity consumption was 14.4 TWh (3.1% less than last year), while gross generation was 14.4 TWh (2.6% less y-o-y).

 The power demand in the Polish power system varies between 10 GW and 28 GW. The average value illustrates the system situation in a given month. By observing the monthly minima and maxima, it has so far been noticeable that the summer months are characterised by significant power demand variability and high demand peaks around midday. However, these profiles are now changing, due to the dynamic emergence of heat pumps, which increase demand during the winter months, and air conditioners and photovoltaic installations, whose greatest impact can be observed during the summer months. 

• Net electricity imports amounted to 0.4 TWh, or 2.8% of domestic demand. 

 In the graph we observe the physical cross-border exchange of electricity, i.e. from which country we import and to which country we export energy in a given period. Addition values indicate that imports were the main direction in a given month and a negative value indicates that energy was mainly exported. Physical exchanges can be forced by system conditions or result from trade flows. The direction of electricity trade is mainly influenced by the price difference in the markets (energy flows from a country with a lower price to a country with a higher price). Cross-border exchanges with Germany, the Czech Republic, Slovakia, Sweden and Lithuania take place within the Single Day-ahead Coupling, as well as inter-operator exchanges. The exchange with Ukraine, which became possible from May 2023 thanks to the ENTSO-E decision, takes place within the framework of unilateral monthly auctions announced by PSE. Previously, the exchange only took place unidirectionally from Ukraine to Poland on the Zamość-Dobrotwór connection. Energy exchange with Sweden and Lithuania takes place via a direct current connection (HVDC). The electricity systems of the other countries are synchronised, hence the exchange takes place using alternating current lines (HVAC) and these are physical (not commercial) flows. 

• Renewable electricity generation accounted for 26.9% of the generation mix, a share down 0.6 p.p. from last year. 

 The graph shows the share of renewable electricity in total production for a given month and year. The share of renewables in consumption may differ minimally from the visible values due to imports and exports. Since 2015, an expansion of wind sources is visible (higher % of RES in autumn and winter), while a dynamic expansion of photovoltaics (higher % of RES in spring and summer) is visible since 2020. 

• Pumped storage power stations were responsible for the production of 0.13 TWh of electricity. This is 6% less than in February. 
• Fossil fuels accounted for the remaining 73.1% of electricity: hard coal 37.3% (5.4 TWh), lignite 21.1% (3.0 TWh), natural gas 12.7% (1.8 TWh) and other fossil fuels 1.9% (0.3 TWh). 
• Among renewable sources, wind farms produced 14.5% of electricity (2.1 TWh, or 53.9% of RES production), photovoltaics were responsible for 6.9% (1.0 TWh - 25.7% of RES), 2% came from hydropower (0.3 TWh - 7.4% of RES), and 3.5% from biomass (0.5 TWh - 13.1% of RES). 

 In the graph we see the percentage shares of electricity production by source. 

• Coal prices for power plants (PSCMI1 index) fell by 4.1% during the month to 22.6 PLN/GJ (approx. 485 PLN/t). Coal for district heating (PSCMI2 index) costs 24.9 PLN/GJ (approx. 607 PLN/t), down 1% on the previous month. 
• The weighted average price of natural gas delivered in March fell by 0.9% on February, to 224.2 PLN/MWh, i.e. 62.1% less than a year ago. 

 The chart shows coal, gas prices on Polish and international markets, converted to a common unit (PL/MWh of energy in fuel) for comparability.  
*For coal, the domestic market is represented by the PSCMI1 index and the international market by the ARGUS-McCloskey CIF ARA API 2 index.  
*Natural gas in the domestic market is the weighted average (from POLPX data) delivery price for the month, while the international market for pipeline gas is represented by the TTF exchange index and for LNG by the Henry Hub index. 
For completeness, the chart also shows the price of CO₂ emission allowances from the primary market (trading on EEX). 

• Emissions from the electricity sector were estimated at 8.2 million tonnes of CO2, 2.4% lower than a year ago and 7.3% higher than in February. 

 Knowing the structure of electricity generation allows carbon dioxide emissions from electricity generation to be calculated. CO₂ emissions are calculated on the basis of reference fuel benchmarks adopted by the Energy Forum and calibrated to the reported emissions of the previous year. 

• Further price declines were observed on the power exchange. Even supply in each hour of the day ahead (in the so-called strip - BASE instrument) was traded 1.6% higher at an average of 443.5 PLN/MWh, and in peak hours (PEAK5) 1.7% higher at 487.7 PLN/MWh. The pricing of supplies on the SPOT market (DAM) fell by 3.8%, to PLN 329/MWh. 

 The graph shows a comparison of the weighted average monthly prices on the POLPX. The Commodity Forward Market covers approximately 80% of the energy sales volume on the Polish Power Exchange.  
The two most important instruments relate to the delivery of energy around the clock (BASE) and from 7 a.m. to 10 p.m. (PEAK5). The contracts are concluded with delivery in the future (max. 3 years). The vast majority of transactions on the exchange are for the purchase of energy with delivery in the coming calendar year (n+1). 
On the basis of the contracts concluded in a given month, the volume-weighted average BASE_n+1 and PEAK5_n+1 indexes were calculated. This reflects the long-term situation on the electricity market. 
In contrast, the TGeBase Index relates to the Day-Ahead Market (with next-day delivery) - it reflects the current market situation and is characterised by high volatility. The weighted monthly average is usually lower than the prices in the Forward Market and seasonal dependencies are negligible.

• The weighted average price of CO2 emission allowances (EUAs) on the primary market was EUR 57.5/tCO2, i.e. 4% more than a month earlier. In February, Poland's budget received PLN 1.1 billion as a result of the sale of CO2 emission allowances on the primary market (EEX exchange), and since the beginning of the year, PLN 3.5 billion has been received. 
• The CDS (Clean Dark Spread), an indicator of the margin of coal-fired power plants, amounted to PLN45.1/MWh in March, representing 9.4% of the weighted average wholesale price of electricity delivered that month. Over the course of the year, the index has fallen by approximately PLN147.8.2/MWh (it was PLN192.9/MWh at the time). According to the current forecast, the CDS in 2024 will average 136.3 PLN/MWh, representing 23.9% of the weighted average wholesale price of electricity delivered. 

The graph shows the Clean Dark Spread calculated from: historical contracts (BASE, PEAK, OFFPEAK) weighted by the share of deliveries in a given month (POLPX Commodity Futures Market), spot market contracts (POLPX Day-Ahead Market), coal prices (PSCMI1) and CO₂ emission allowance prices (EEX primary market).  
The Clean Dark Spread (coal-fired power plant variable cost spread indicator) is the difference between the electricity price and the estimated variable costs associated with coal-fired power generation (fuel and emission allowances). The Clean Dark Spread is an indicator correlated with the profit of the generator, producing electricity from coal (in reality, it is still necessary to take into account transport costs, operating costs, incurred and planned investment costs, etc.). The analysis of the evolution of this value, together with the CSS, allows the estimation of the current financial situation of the generating companies.  
The beginning of the bands corresponding to fuel or entitlements under the horizontal axis is due to the negative value of the CDS. The values in grey represent the forecast for 2024.

• The CSS (Clean Spark Spread), which is the equivalent of the CDS for gas-fired power plants, was 13.4 PLN/MWh this month. In March 2023, it was around 269.2 PLN/MWh lower (then -255.8 PLN/MWh). According to the current forecast, the CSS in 2024 will average 103.3 PLN/MWh, representing 18.1% of the weighted average wholesale delivered price of electricity. 
  
  

 The graph shows the Clean Spark Spread calculated based on: historical contracts (BASE, PEAK, OFFPEAK) weighted by the share of deliveries in a given month (POLPX Commodity Forward Market), spot market contracts (POLPX Day-Ahead Market), natural gas prices (POLPX Commodity Forward Market) and CO₂ emission allowance prices (EEX primary market).  
Clean Spark Spread (gas power plants' variable cost spread indicator) is the difference between the price of electricity 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 profit of the generator producing electricity from natural gas (in reality, it is still necessary to take into account transport costs, operating costs, incurred and planned investment costs, etc.). The analysis of the evolution of this value, together with the CDS, makes it possible to estimate the current financial situation of generation companies.  
The beginning of the bands corresponding to fuel or entitlements under the horizontal axis is due to the negative value of the CSS. The values in grey represent the forecast for 2024. 

• The weighted average price of electricity delivered in a given month is made up of past futures contracts and spot market transactions (DAM and IDM). On the spot market, the price of electricity was PLN 329/MWh and reduced the average price of delivered electricity to PLN 477/MWh - the lowest since February 2022 (PLN 471/MWh). If electricity had been supplied solely on the basis of futures contracts concluded last year, the value would have been 594 PLN/MWh. 

 The chart shows the price profiles of electricity traded in three ways: 
*RTT - Commodity Futures Market, where electricity is traded in contracts executed at a contracted future, in weekly, monthly, quarterly and annual contracts; 
*RDN+RDB spot market (Day-Ahead Market and Intraday Market), where electricity is traded for delivery today or tomorrow; 
*OTC (Over-the-Counter) - over-the-counter (OTC) trading, mostly contracts concluded within energy groups. 
The price of electricity delivered in a given month is the average of these three prices, weighted by the volumes of electricity delivered at that price (shown in the chart below). 

• On the exchange, turnover (the sum of volumes traded in futures contracts) was 6.4 TWh, 7.8% less than a year ago (7.0 TWh). This is still 63% less than the March average for 2018-22, which is 17.3 TWh. 
  
  

 Knowing the structure of the origin of the delivered volumes makes it possible to determine what proportion of the weighted average price is the result of trading on spot markets, where there is a clear correlation between the structure of the hourly electricity production mix and the price (the greater the production of photovoltaic installations and wind farms, the lower the price). Contracts traded on forward markets, where it is the physical delivery of electricity that takes place many months in advance, allow the risk of future price changes to be priced in. 

• The balance of the cost of coal, oil, gas and fuel imports for January (latest figures) was PLN 9.2 billion. In the previous 12 months, we paid a total of almost PLN 130 billion for net imports. 
   

The graph shows the nominal (excluding inflation) monthly cost of imports of energy raw materials and fuels into Poland. This is a net import, i.e. it also includes exports from Poland of these products. 
*The coal category includes: anthracite, lignite, hard coal (thermal and coking coal) and hard and lignite briquettes. 
*The oil category includes crude oil and natural gas condensates. 
*Gas includes both pipeline gas and LNG. 
*Under the fuel category are motor petrol, diesel, LPG (fuel, not reagent) and various types of aviation fuel.