Prices of electricity and related products

In 2014 electricity wholesale prices rose markedly in Poland, driven chiefly by introducing certain elements of a capacity market in the form of payments for electricity generators to maintain an operational capacity reserve, the lack of sufficient options to import cheaper electricity from neighboring countries and inter-operator exchange between systems conducted by Polskie Sieci Elektroenergetyczne (TSO) to maintain the National Power System’s stability.

Additionally, rising electricity prices ensued from weather conditions not conducive to electricity generation in hydroelectric power plants and wind farms. The average price on the Day Ahead Market of the Polish Power Exchange in 2014 was PLN 179.86/MWh versus PLN 153.82/MWh a year earlier.

The price trends observed last year in neighboring countries were the opposite. The substantial drop in thermal coal, crude oil and natural gas prices on global markets coupled with growing electricity supply from renewable sources contributed to lower electricity prices in other European countries. In Germany renewable sources covered approx. 27 percent of demand for electricity in 2014 which, according to initial estimates, fell by almost 5 percent versus 2013.

Market commodity prices plummeted as confirmed by the movement in the price for a barrel of Brent crude oil from roughly USD 115 in mid-June 2014 to a mere USD 57 at yearend 2014. The average price for a barrel of crude oil was USD 99.45 in 2014, i.e. approx. USD 9.25 lower than in 2013. Large excess supply drove down thermal coal market prices in 2014. One year CIF ARA Y-15 contracts at the end of December 2014 fell to USD 66.58/Mg compared to USD 86.70/Mg at the beginning of 2014.

CO2 emission allowances market prices were in an upward trend in 2014. The work of the European Commission to modify the European CO2 Emissions Trading System precipitated this price increase.

In February 2014, following the European Commission’s approval of accelerated backloading to facilitate the retraction of 400 million allowances during the year, the price spiked to more than EUR 7/Mg of CO2 from EUR 3/Mg of CO2 a year earlier. After allowance prices backpedalled to EUR 4.50–5.00/Mg of CO2 in mid-2014 the European Commission proposed to set up the Market Stability Reserve mechanism whose task is to adjust the number of allowances on the market smoothly by annually transferring a maximum of 12 percent of the emission allowance surplus to this reserve until the allowance glut falls below 833m. If this reserve drops below 400m, 100m allowances will be released onto the market in a given year. This mechanism is expected to elevate the price for allowances by approx. EUR 15–20/Mg of CO2.

2014 was also a breakthrough year with respect to setting long-term targets in the European Union’s climate policy. On October 23, 2014 the leaders of member states agreed new 2030 climate targets. EU countries undertook to reduce greenhouse gas emissions by 40 percent from 1990 levels. This information exerted a major impact on demand on the CO2 emission allowances market.

At the end of 2014, the price of EUA contracts was approx. EUR 7/Mg of CO2, with the average allowance price in 2014 being EUR 5.96/Mg of CO2, up from 2013 by almost EUR 1.50 (+32 percent).

2014 brought significant changes on the property rights market related mainly to changes in the legal regulations applicable to co-generation units.

The average price of green certificates (property rights for electricity generated using RES) in 2014 reached PLN 186.53/MWh, up PLN 15.35 from 2013. Since mid-2014 following the amendment of the Energy Law, the obligation to redeem property rights confirming the production of electricity using high efficiency hard coal- and gas-fired co-generation was reinstated.

Sales of yellow certificates (property rights for electricity produced from gas-fired co-generation) did not commence until the end of July 2014 at a price of PLN 101.14/MWh. At the end of 2014 the price edged above PLN 106/MWh. Meanwhile, the sales of property rights for electricity produced from hard coal-fired co-generation (red certificates) kicked off in mid-August 2014 at a price of PLN 10.50/MWh, with the price hovering until the end of 2014 in the PLN 10.35/MWh to PLN 10.53/MWh range. The redemption obligation is to be applicable only to property rights granted for generation in H2 2014.

The redemption obligation was applicable to property rights confirming electricity generation using methane (violet certificates) throughout 2014. In May 2014 the price was very low at approx. PLN 20/MWh, but as early as June the price skyrocketed to almost PLN 59/MWh and ended the year at PLN 61.5/MWh.


Certificate type Price at the end of December 2014 (PLN/MWh) Price at the end of December 2013


Change Average price in 2014 (PLN/MWh)
RES (green) 153.02 194.67 -21.40% 186.53
Hard coal-fired co-generation (red) 10.55 0.85 1141.18% 10.48
Gas-fired co-generation (yellow) 106.52 44.44 139.69% 105.62
Methane (violet) 67.63 59.4 13.86% 59,66
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Letter from the President of the Management Board [43KB PDF]Open
Auditor's Opinion [477KB PDF]Open
Consolidated annual report for the year 2014 [3MB PDF]Open
Standalone annual report for the year 2014 [1MB PDF]Open
Quarterly Reports 2014 [4MB ZIP]Open
Consolidated annual report for the year 2013 [4MB PDF]Open
Consolidated annual report for the year 2012 [8MB PDF]Open
FY 2014 Selected figures [24KB XLSX]Open
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