
Breadcrumbs
Poland’s wholesale electricity prices rise to the highest in Europe
Three factors have contributed to high Polish electricity prices – expensive Polish coal, low renewables generation, and falling gas prices.
Available in: Polski
About
This briefing presents analysis from Ember’s September EU monthly data release.
Executive summary
Most expensive electricity in Europe
Poland’s wholesale electricity prices become the most expensive in Europe
Senior Electricity Analyst, Ember
Poland’s reliance on costly domestic coal means it now has the most expensive electricity in Europe. With the Polish government set to bankroll uneconomic coal mines and take on PGE’s loss-making lignite plants, the public will pay dearly for Poland’s coal addiction. New solar installations have taken the sting out of very high electricity prices this summer, but that’s only touching the surface. Poland needs to step up to make a rapid transition away from coal to clean electricity.

Factors
Three causes of high prices
Three factors have contributed to high Polish electricity prices – expensive Polish coal, low renewables generation, and falling gas prices.
That means that in most hours in Poland, the wholesale electricity price is set by expensive inefficient coal power plants, which keeps prices elevated to such a level that Poland now has the most expensive wholesale electricity prices in Europe.
Given the reduction of the cost of wind and solar over recent years and the projected increase in carbon prices, it is now (or very soon will be) cheaper to build new renewable electricity than to operate existing coal fired power stations [Carbon Tracker], [Bloomberg].
Impacts
Two outcomes of high prices
Poland’s electricity imports are increasing, while its industrial competitiveness is decreasing.
Increasing wholesale electricity prices exert a profound effect on Poland’s industrial competitiveness. Recently, ArcelorMittal announced that it will permanently close one of its steel plants citing high electricity prices as one of the reasons for its decision. However, this is not an isolated case – the threat of investment outflow from energy-demanding sectors puts Poland in a position where public money will be necessary to preserve the competitiveness of Polish manufacturing.
Conclusion
Coal to clean transition required
The cheapest, fastest, and future-proofed solution for Poland to decrease its wholesale electricity prices is to deploy as much wind and solar power as soon as possible.
Poland’s reliance on costly domestic coal means it now has the most expensive electricity in Europe.
With the Polish government set to bankroll uneconomic coal mines and take on PGE’s loss-making lignite plants, the public will pay dearly for Poland’s coal addiction.
New solar installations have taken the sting out of very high electricity prices this summer, but that’s only touching the surface.
Poland needs to step up to make a rapid transition away from coal to clean electricity.
Supporting Material
Methodology
Notes
[1] This is somewhat counter-intuitive for a country with one of the cheapest electricity prices for household consumers in Europe. Minimal taxes and levies on household and non-household electricity will soon put Poland in a vicious cycle where it is most likely to struggle to find money to invest in RES and modernize existing infrastructure.
[2] Power plant efficiency can be defined as the electrical energy produced divided by the total energy content of the fuel consumed. The most typical efficiency range for coal-fired power plants is 35-45%. In Poland, the current range is ~35-49%. Gas plants’ efficiencies are higher, generally between 50-60%.
[3] Both efficiencies are quoted at Lower Heating Value (LHV)
[4] The Polish coal monthly “PSCMI1” price index is of standard hard coal energy produced by domestic manufacturers and sold on the domestic energy market to industrial users. The imported “ARA” coal price is a daily price for imported coal arriving into Rotterdam. In addition, Polish coal has a lower calorific value, so more tonnes of Polish coal is needed compared to imported coal, for the same unit of electricity produced.
Acknowledgements
Thanks to Bartłomiej Derski, Chief Editor of Wysokienapiecie.pl and Paweł Czyżak, Head of Energy Modelling at Instrat Foundation for reviewing this analysis ahead of publication.