October - summary 

October 2023 was an exceptionally windy month. More than 2.5 TWh of electricity production from wind farms was registered, almost 120% more than in September. This was the third highest result ever, just after February and January last year.  

In October, 3.7 TWh of electricity was produced from RES sources. Thus, the share of RES in the generation mix was a record 27.2% (in September it was 26% and in Q4 2022 only 16.7% overall). 

Despite this, estimated emissions from electricity generation increased by 7%, or 0.6 million tonnes, relative to September (from 8.1 to 8.7). This increase is mainly due to a slight increase in the output of coal-fired power plants (by 6.7% m/m, to 5.8 TWh) and a significant increase in the output of gas-fired power plants (by 110.1% m/m, to 1 TWh). These increases were forced by an increase in electricity demand of almost 8% m/m (to 14.1 TWh), and small net exports (0.1 TWh), which happened for the first time this year. However, October's estimated emissions are 10% lower than in the same month last year. 

The price of gaseous fuel has risen by around PLN 52/MWh relative to September (to around PLN 352/MWh) and is still lower than in 2022 (-6.1% y-o-y). However, it still remains more than 290% higher than in September 2019. (PLN 90.5/MWh at the time). 

The weighted average price of electricity delivered in a given month is made up of past forward contracts and spot market transactions. The relatively lower price of energy on the spot (thanks, among other things, to a fairly high share of RES) - around PLN 440/MWh - reduced the average price of delivered electricity to PLN 789/MWh. If electricity had been supplied solely based on forward contracts, this value would have been 938 PLN/MWh. 

Emission allowance prices in October fell marginally to €80.75/tonne (from €81.91/tonne in September). The state budget received €544 million, the highest amount since March 2023 and the fourth highest amount ever. 

• The average monthly power demand in October 2023 was 19.0 GW (the same as in October a year ago), reaching a maximum of 23.7 GW (minimum - 12.6 GW). 
• Electricity consumption was 14.1 TWh (0.3% less than last year), while gross production was 14.2 TWh (0.7% more y/y). 
• Net electricity exports amounted to 0.1 TWh, or about 0.5% of domestic production. Last year, net imports amounted to 0.1 TWh. 
• - Electricity production from RES accounted for 27.2% of the generation mix, a share that increased by 6.4 p.p. compared to last year. 
• Pumped storage power plants were responsible for 0.9% of electricity production. This is 14.2% less than a year ago (at that time generation was responsible for 0.8% of electricity in the mix). 
• Fossil fuels accounted for the remaining 72.0% of electricity: hard coal 43.1% (5.8 TWh), lignite 19.1% (2.6 TWh), natural gas 7.7% (1.0 TWh) and other fossil fuels 2.0% (0.3 TWh).  
• Among renewable sources, wind farms produced 18.8% of electricity (2.5 TWh, or 69.0% of RES production), photovoltaics were responsible for 6.1% (0.8 TWh - 22.6% of RES), 0.8% came from hydropower (0.1 TWh - 2.9% of RES) and 1.5% from biomass (0.2 TWh - 5.5% of RES). 
• Coal prices for power plants (PSCMI1 index) increased by 2.3% during the month to PLN 34.0/GJ (approx. PLN 741/t), 18% more than a year ago. Coal for district heating plants (PSCMI2 index) costs 37.3 PLN/GJ (approx. 935 PLN/t; 38% less than a year ago), up 10.9% on the previous month. The weighted average price of natural gas delivered in October increased by 17.5% relative to September, to PLN 351.7/MWh, 6% less than a year ago. 
• Emissions from the electricity sector were estimated at 8.7 million tonnes of CO2, 10% less than a year ago and 7% more than in September. 
• Further gentle price declines are observed on the power exchange. Even supply in each hour of the day ahead (in the so-called strip - BASE instrument) was traded 5% lower at an average of PLN 600.6/MWh, and in peak hours (PEAK5) 6% lower at PLN 653.3/MWh. The valuation of deliveries on the SPOT market (DAM) fell by 18%, to PLN 440.0/MWh.  
• - The weighted average price of CO2 emission allowances (EUAs) on the primary market was EUR 80.8/tCO2, 1% lower than a month earlier. In October, the Polish budget received EUR 544.1 million as a result of the sale of CO2 emission allowances on the primary market (EEX exchange). This brings the amount to €4.7 billion since the beginning of the year, and since 2013. 23.3 billion euro. 
• The CDS (Clean Dark Spread), an indicator of the margin of coal-fired power plants, was 132.5 PLN/MWh in October, representing 17% of the weighted average wholesale price of electricity delivered in that month. Over the course of the year, the index has increased by approximately 96.9 PLN/MWh (it was 35.6 PLN/MWh at the time). According to the current forecast, the CDS for the remainder of 2023 will be around 310 PLN/MWh, representing 33% of the weighted average wholesale price of electricity delivered. 
• The CSS (Clean Spark Spread), the equivalent of the CDS for gas-fired power plants, was at 69.0 PLN/MWh this month. In October 2022, it was approximately 231.4 PLN/MWh (then 162.4 PLN/MWh) lower. 
• On the exchange, trading (the sum of volumes of futures contracts concluded) amounted to 8.1 TWh, 48% more than a year ago (5.5 TWh). This is still 59% less than the average for October 2017-22, which was 20.0 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.