Natural gas market

The year 2017 was another successful one on the natural gas market – both with respect to sales as well as growing number of new connections of new customers and continuation of investments. At the same time one can notice a constant trend of an increasing share of natural gas in the national energy market, which in the recent time was caused mainly through starting the heat and power plant (CCGT) of Orlen in Włocławek of the power of 463 MW and being almost completed investment in Płock of the CCGT block of the power of 596 MW. The estimated demand for both heat and power plants amounts about 2,5 billion m3, which constitutes an increase by 15-20% in the national demand for gas fuel. Additionally, one can also notice a tendency of changing the manner of heating households and enterprises, from coal to natural gas. According to the report of GAZ-SYSTEM most gas in history was transmitted in 2017 – 19,7 billion m3. This constitutes a growth compared to2016 by almost 9%.

The year 2017 was also the best one in the history of natural gas trading at the Polish Power Exchange (TGE). The total volume of transactions concluded on the natural gas markets in 2017 amounted 138,7 TWh, that is by 21,1% more yoy. On the Gas Day-Ahead Market (RDNg) and Gas Day-Ahead Market and Intraday Market (RDNiBg) the volume amounted 24,0 TWh, being lower compared to 2016 by 2,5%. The volume of trade on the RTTg grew by 27,6%, to the level of over 114 TWh, which is the best annual result on this market in the history of the Polish Power Exchange.

The average weighted price on the RDNiBg for delivery in the whole of 2017 amounted 83,66 PLN/MWh, that is by 12,50 PLN/MWh more than in the year 2016. Corresponding price of products for delivery in December 2017 grew yoy by 1,64 PLN/MWh, to the level of 93,60 PLN/MWh. On the RTTg in turn the average weighted price of the contract for delivery in 2018(GAS_BASE_Y-18) amounted in 2017 81,79 PLN/MWh, that is by 7,29 PLN/MWh more compared to corresponding price of contract GAS_BASE_Y-17 quotations in the year 2016. (source: TGE)

Further liberalization of the gas market occurred in 2017, where a vital issue is to limit the administrative supervision over the prices of gaseous fuels. On 1st January 2017 new regulations entered into force – The Energy Law, which waive under the law the supervision of the President of the Energy Regulatory Office over the tariffs for sales of gas to wholesale customers, sales of LNG and CNG and sales of gas to final customers who purchase this fuel at a virtual point or in the mode of tender, auction or public procurement. According to the law since 1st October 2017 the obligation has been waived to submit for the consent of the President of the Energy Regulatory Office tariffs for sale of high-methane and low-methane natural gas to final customers not being households. The supervision of the President of ERO over the tariffs for network gas sold to households remains in force until the end of 2023. (source: URE)

A vital element of the gas market liberalisation is freedom to choose the gas supplier by individual customers. On the basis of data by ERO it can be concluded that the started in the 3rd quarter of 2014 growth of supplier change in the segment of customers of the tariff groups W1-4, that is mainly among households is still present. In 2011 only few cases of gas supplier were recorded, in 2012 the number increased to 210, in 2013 to 429, in 2014 – 7 007,
in 2015 – 30 749, in 2016 – 78 437, and since the beginning of conducting monitoring to the end of 2017 gas suppliers were changed in 136 419 cases. (source: URE, Liberalizacja rynku gazu).

Important changes to the Polish natural gas market have been also introduced by the amendment to the law of 7th July on reserves of crude oil, refinery products and natural gas and the principles of proceeding in the event of a threat to the fuel security of the country and disturbances in the crude oil market and several other laws. Since 1st October 2017 gas importers who store its mandatory reserve abroad, in order to assure the ability to transmit them to Poland have to in case of an energy crisis reserve so called transmission capacity on cross-border connections (interconnectors). The reserved abilities are supposed to allow to transmit the whole of stock in any conditions to the country within the period of maximum 40 days and additionally they cannot be used for any other purposes, e.g. commercial ones. According to the law the inventories of gas may be maintained only physically in the warehousing installations connected to the transmission or distribution system of gas, and an obligation has been imposed on gas importers to provide the transmission system operator the information on the location of stored inventories.

Trade organisations and institutions:

  • Organization of the Polish Exploration and Production Industry
  • Polish LNG