Barriers to liberalisation of the Polish energy-sector

Abstract

Energy is a specific product, which is produced and sold generally in one region. Therefore clients on the energy market have usually only one energy distributor: the suppliers have the exclusive right to provide energy in the chosen area. The market was centralised and regulated by the government, which set the energy price. Looking for the possibility of choosing an energy producer providing lower prices, the clients have been urging changes in the energy trade. The government is also trying to deregulate the energy market and make it more competitive by creating the power exchanges, on which trading is much easier and effective in many countries. In Poland on 7 December 1999, there was established the Polish Power Exchange. Its aim is to increase the efficiency of the Polish energy-sector, adjust it to competitive conditions and the requirements of the European Union and to minimise the costs of leading the business. However energy trading in Poland has met many problems, i.e. (a) the existence of long-term contracts, which prevent the liberalisation of the market and continue strengthening the monopoly position of the Polish Power Grid Company (PSE SA) (Transmitting-System Operator), (b) the lack of co-ordinated actions to provide the third-party access to the grid (third-party access principle), which means opening the electric-energy market to final consumers (thereby each recipient can choose the energy producer, who offers the best price and terms of delivery), (c) ineffective Balancing Market (which is a 24 h market). All these difficulties cause that the turn-over on the Polish Power Exchange to be relatively low compared with other countries. Solutions will be proposed in this paper which can promote the liberalisation of the energy trade both from conventional and renewable sources.