Nobody expected such a “hot” December on the European energy exchanges - electricity prices are breaking new records.
The average daily SPOT prices in Poland broke the level of PLN 1,100 / MWh, which, compared to the average price from 2020, PLN 210 / MWh, is an extremely high level. We all pay for it - directly (as seen in energy bills) or indirectly (e.g. in prices of goods and services or taxes). So let's take a look at what the current level of energy prices is causing.
In addition to coal prices, the prices of CO2 emission allowances are the main determinant of energy prices in Poland. In recent months, we have noted their unprecedented growth - a year ago, we paid about EUR 30 for CO2 emission allowances, and in recent days their price has reached the level of approximately EUR 90 (currently around EUR 80).
Secondly, energy prices are rising due to significant (winter) energy demand with insufficient supply. The national power system has more and more problems with ensuring adequate power needed to supply consumers with energy. These problems mainly result from poor wind conditions, which affects the low level of energy generation in wind farms, as well as from shutting down power units in power plants (for renovation purposes or resulting from inadequate coal reserves). The situation with the lack of power is so tense that in the last week, the stability of the Polish system helped to maintain one of the Swedish power plants.
It is also worth mentioning that until recently Poland was a true green island on the energy map of Europe. Domestic energy prices were so low compared to neighboring countries that it was profitable to sell energy to the neighbors - this lowered prices abroad, but of course increased prices on the domestic market.
Another factor has a psychological basis, which is so important in the market price formation. The current situation can be described as incredible, unbelievable, impossible to predict. A spiral of fear is created and fueled, and panic arises which increases energy prices even more.