From the beginning of 2019, Poland is facing a wave of price increases for goods and services, owing to increasing electricity costs, which has a direct or indirect influence on these prices. As early as September, according to analysts from the Crédit Agricole bank, current electricity prices exceeded PLN 271 per megawatt-hour.
At the start of this year enterprises, hospitals or road managers who pay for their lighting signed contracts for electricity supply at prices not much above PLN 200. Now, according to data from the Association of Entrepreneurs and Employers, prices may reach PLN 350, and in some cases even PLN 480 per megawatt-hour. For some companies this means doubling energy bills over several quarters.
Last week, Polish Prime Minister Mateusz Morawiecki brought the heads of the four largest state-owned energy companies together to discuss the price increases. For an average household, this means about PLN 250 more per year. Even mining trade unions are protesting against the increases. Mr Morawiecki will therefore urge energy company chiefs to ease the increases.
Green power is losing
The Energy Regulatory Office recently announced the results of the auction for energy supplies from onshore wind farms for the next 15 years. The average price was around PLN 197 per MWh. The decline in the cost of producing energy from renewable sources is due to billions of dollars invested by producers from the US, Europe or the Far East in improving their efficiency, according to Jan Rączka, former president of the National Fund for Environmental Protection and expert of the Energy Forum, a think tank dealing with energy issues.
Green energy will be cheaper, and electricity from coal – due to high fixed costs and expensive CO2 emission allowances – will likely be more expensive. There is also nuclear energy to consider. In the PLN 150 billion nuclear power plant in Hinkley, Great Britain, due to start operations in seven years, the megawatt hour cost will amount to PLN 550. At these prices in Europe, it is perhaps not surprising that only two atomic power plants are currently being developed.