How is the structure of electricity production in Poland changing? What emissions are involved? How are raw material prices evolving? Here is a summary of the most important data from the electricity industry. Updated monthly.

 

January - summary  

January 2024 brought many windy days, resulting in the highest wind power production ever recorded. In the record hour of January 24, wind plants operated at an average capacity of 8.44 GW. Total monthly production from onshore wind farms was 3.1 TWh, accounting for 21.3% of demand (slightly higher than in December, which also saw record production). Combined with the high for January production from photovoltaics (0.2 TWh, or 71.5% more than in January 2023 and 68.9% more than in December 2023), biomass and hydropower (0.2 TWh each), the past month ended with a historic record for RES electricity production: it was 3.9 TWh, accounting for 26.5% of demand. 

January also saw the highest electricity demand since December 2022 at 16 TWh, as well as the highest hourly electricity demand ever (28.3 GWh). There were also records for electricity production from natural gas (1.5 TWh). 

Despite the increase in electricity production in January (to 14.8 TWh from 14.6 TWh in December), emissions from the power industry fell by 1% or 0.1 million tons relative to December (to 9.4 million tons of CO2).  The stabilization in estimated emissions is mainly due to an increase in the production of RES (up 5.8% m/m) and natural gas (up 2.5% m/m), as well as the almost identical production of hard coal (6.0 TWh) and lignite (2.9 TWh) power plants as in the previous month. In the end, January emissions were 4% lower than in the same month of 2023. 

In January, net imports amounted to 0.3 TWh. The main import destinations were Germany and Sweden, while a negative balance appeared with the Czech Republic, Lithuania and Slovakia.  

Despite the ongoing winter and high consumption of fuels - both for heating and electricity generation, January was another month that saw declines in the price of consumed fuels. The price of gaseous fuel fell by 31.0% relative to December (to PLN 221/MWh) and remains at a lower level than in 2023 (-65.9% y/y). However, it is still more than 164% higher than in January 2020. (it amounted to PLN 83.7/MWh then). Coal prices for power plants (PSCMI1 index) fell by 2.2% (m/m) to PLN 30.3/GJ and are at their lowest level since December 2022. However, this is a 20% increase over last year. For district heating coal (PSCMI2), prices rose 7.7% (m/m) to PLN 28.4/GJ (or 41% y/y). 

The weighted average price of electricity delivered in a given month consists of past futures contracts and spot market transactions. On the spot electricity price (425 PLN/MWh) and reduced the average price of delivered electricity to 527 PLN/MWh. If electricity had been delivered solely on the basis of last year's futures contracts, the value would have been 610 PLN/MWh (or 37% less than the average in 2023).  

  • Emission allowance prices in January fell to €61.6/ton (from €68.7/ton in December). This is the lowest value since October 2021 (59.6 EUR/ton), thus continuing the downward trend (from 91.9 EUR/ton last February). This month, the state budget received PLN 1.26 billion from the sale of allowances, 20% more than a month ago. 
  • Average monthly power demand in January 2024 was 21.5 GW (1.2 GW more than in December a year ago), reaching a maximum of 12.7 GW (minimum - 28.3 GW). 
  • Electricity consumption was 16 TWh (5.8% more than last year), while gross generation was 14.8 TWh (4.6% more y/y). 
  • Net electricity exports amounted to 0.3 TWh, or 2.1% of domestic demand. 
  • Electricity production from RES accounted for 26.5% of the generation mix, a 5 p.p. increase over last year's share. 
  • Pumped storage power plants were responsible for 1.1% of electricity production (0.17 TWh). This is 4.4% more than in December (0.16 TWh). 
  • Fossil fuels accounted for the remaining 72.4% of electricity: hard coal accounted for 40.5% (6 TWh), lignite 19.3% (2.9 TWh), natural gas 10.4% (1.5 TWh), and other fossil fuels 2.2% (0.3 TWh). 
  • Among renewable sources, wind farms produced 21.2% of electricity (3.1 TWh, or 80.1% of RES production), photovoltaics were responsible for 2.4% (0.4 TWh - 9% of RES), 1.6% came from hydropower (0.2 TWh - 6% of RES), and 1.3% from biomass (0.2 TWh - 4.9% of RES). 
  • Coal prices for power plants (PSCMI1 index) fell 2.2% during the month, to PLN 30.3/GJ (about PLN 657/t). Coal for district heating plants (PSCMI2 index) costs PLN 28.4/GJ (about PLN 705/t), up 7.7% on the previous month. 
  • The weighted average price of natural gas delivered in January fell 31% against December, to PLN 220.9/MWh, 65.9% less than a year ago. 
  • Emissions from the electricity sector were estimated at 9.4 million tons of CO2, 4.4% less than a year ago and 0.6% less than in December. 
  • The power exchange has seen further price declines. Equal delivery in each hour of the day ahead (in the so-called strip - BASE instrument) was traded 3.3% lower, at an average of 473.2 PLN/MWh, and in peak hours (PEAK5) 3.9% lower, at 527 PLN/MWh. The valuation of supplies on the SPOT market (DAM) increased by 16%, to 425.3 PLN/MWh. 
  • The weighted average price of CO2 emission allowances (EUAs) on the primary market was 61.6 EUR/tCO2, 10.3% lower than a month earlier. In December, Poland's budget received EUR 289 million from the sale of CO2 emission allowances on the primary market (EEX exchange). Since the beginning of the year, the amount is €0.3 billion. 
  • The CDS (Clean Dark Spread), an indicator of the margin of coal-fired power plants, amounted to -7.3 PLN/MWh in January, representing -1.4% of the weighted average wholesale price of electricity delivered that month. Over the year, the index has fallen by about 261.4 PLN/MWh (it was 254.1 PLN/MWh at the time). According to the current forecast, the CDS in 2024 will average 105.7 PLN/MWh, accounting for 17.1% of the weighted average wholesale price of delivered electricity. 
  • The CSS (Clean Spark Spread), which is the equivalent of the CDS for gas-fired power plants, amounted to PLN 61.4/MWh this month. In January 2023, it was about 384.4 PLN/MWh lower (then -323 PLN/MWh). According to the current forecast, the CSS in 2024 will average at 106.2 PLN/MWh, accounting for 17.2% of the weighted average wholesale price of delivered electricity. On the stock exchange, turnover (the sum of the volumes of concluded futures contracts) amounted to 5.7 TWh, 33.9% less than a year ago (8.6 TWh). On the stock exchange, turnover (the sum of the volumes of concluded futures contracts) amounted to 5.7 TWh, 33.9% less than a year ago (8.6 TWh). 
  • On the stock exchange, turnover (the sum of the volumes of concluded futures contracts) amounted to 5.7 TWh, 33.9% less than a year ago (8.6 TWh).  

 

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 chart shows the Clean Dark Spread calculated based on: 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). 

Clean Dark Spread (coal-fired power plants' variable cost spread indicator) is the difference between the price of electricity and the estimated variable costs associated with coal-fired power generation (fuel and emission allowances). Clean Dark Spread is an indicator correlated with the profit of a power company, producing electricity from coal (in reality, it is still necessary to take into account transportation costs, operating costs, incurred and planned investment costs, etc.). Analysis of changes in this value, together with CSS, allows estimating the current financial situation of electricity companies. 

The start of the bands corresponding to fuel or allowances below the horizontal axis is due to the negative value of the CDS. The values on the gray background represent forecasts for 2023. 

 

 

The chart shows Clean Spark Spread calculated based on: 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), natural gas prices (POLPX Commodity Futures Market) and CO2 emission allowance prices (EEX primary market). 

Clean Spark Spread (gas-fired power plants' variable cost spread indicator) is the difference between the price of electricity and the estimated variable costs associated with natural gas-fired power generation (fuel and emission allowances). Clean Spark Spread is an indicator correlated with the profit of a power company, producing electricity from natural gas (in reality, it is still necessary to take into account transportation costs, operating costs, incurred and planned investment costs, etc.). Analysis of changes in this value, together with CDS, allows estimating the current financial situation of electricity companies. 

The start of the bands corresponding to fuel or allowances below the horizontal axis is due to the negative value of the CSS. The values on the gray background represent forecasts for 2023. 

 

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