Electricity market

As in the natural gas market, the electricity market also observed distinct, unprecedented price increase in 2021.

In 2021, demand for electricity increased by 5.7 % against the previous year. Coal-fired power plants (76 per cent), including lignite (28.3 per cent) and hard coal (47.7 per cent), accounted for the dominant share of energy production in December 2021, with lignite recording a 3.8 percentage point increase and hard coal a 2.8 percentage point decrease. The third source of energy was wind power, accounting for 11.6% (down by 0.2 pp, despite a m/m increase in generation of almost 100 GWh)[1].

In Poland in 2021, the structure of electricity production itself did not change significantly compared to the previous year. The decrease in the share of hard coal was only 0.2 pp, while the share of lignite increased by 1.2 pp. Natural gas also fell slightly, by 1.2 percentage points. After the photovoltaic boom of 2020, the following year was also good in terms of installed capacity growth. At the end of October 2021, PV installed capacity stood at 6687.5 MW, compared to 3936 MW in 2020, or an addition of 2751.5 MW. The share of PV energy in power generation increased from 1.5 percent to 2.9 percent[2].

At the end of November 2021, the installed wind capacity was 7185 MW compared to 6350 MW at the end of 2020. Despite an increase of almost 1 GW in capacity, energy production remained at a similar level, and in the structure of total generation, the share of wind energy fell from 10.8% to 9.4%. The reason for the regression in RES was not only the fact that 2021 was a worse year in terms of windiness, but above all the increase in electricity demand was caused by the reaction to the recovery from Pandemic Wave III[3].

In 2021, the volume of electricity trading on POLPX totalled 225.2 TWh, down by 7.4 per cent against 2020. On the other hand, the spot market reached a record volume of 36.2 TWh (up by 4.0 per cent y/y). The Intraday Market trading volume amounted to 2.4 TWh, 11.3 per cent higher than the record volume in 2020. A record was also set in the Day-Ahead Market, where trading volume amounted to 33.9 TWh, up by 3.5 per cent against 2020 and an increase by 151.6 GWh (0.4 per cent) compared to the record volume in 2019. In the futures market, the trading volume reached 188.9 TWh, down by 9.3 per cent against 2020. The weighted average BASE price on the Day-Ahead Market in 2021 was 401.17 PLN/MWh, up by 191.06 PLN/MWh against 2020. On the futures market, the weighted average price for a yearly contract with baseload delivery in 2022 (BASE_Y-22) was 384.16 PLN/MWh in 2021, which is up by 152.29 PLN/MWh compared to the price for BASE_Y-21 in 2020. (Source: POLPX)

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