POLAND Law and Practice Contributed by: Tomasz Młodawski, Krzysztof Cichocki, Łukasz Wyszomirski and Krzysztof Fasula, Sołtysiński Kawecki & Szlęzak
groups: PGE, ENEA, Tauron and Orlen. Those groups control approximately 65% of generation and 77% of retail sales. Private and foreign capital participates primarily through independent renewable energy pro- ducers and traders. Please see 1.2 Principal State- Owned or Investor-Owned Entities for further detail on market shares across all segments. The transmission system is operated by a single state- owned TSO named PSE S.A., holding a statutory monopoly for the development and operation of the national transmission grid. The TSO is also respon- sible for the management of cross-border intercon- nections, and for the operation of both the balancing market and the capacity market. The distribution seg- ment encompasses five principal distribution system operators (DSOs), each operating within a large geo- graphically designated service territory, as well as tens of minor DSOs providing services within smaller grids erected within industrial and commercial zones. Unbundling The transmission grid serves as the backbone of the electricity system and is subject to full ownership unbundling according to EU law. Ownership separa- tion of the transmission services promotes non-dis- criminatory network access and supports the devel- opment of effective competition within the liberalised segments of generation, storage and trading. In turn, DSOs are in principle subject to legal and functional unbundling from the competitive activities of their par- ent groups. In consequence, neither the TSO nor any major DSO may engage in generation, storage or elec- tricity trading. Compliance with unbundling require- ments is supervised by the President of ERO. Legislative Framework Poland’s electricity sector operates within a regula- tory framework largely implementing EU energy law requirements with certain local specificities. The pri- mary domestic statute is the Energy Law Act of 10 April 1997 (“Energy Law”), which establishes the fun- damental rules governing the generation, transmis- sion, distribution and supply of electricity, together with the applicable licensing regime and the institu- tional framework for sector regulation. The directly applicable EU regulations – such as Regulation (EU) 2019/943 on the internal market for electricity and
network codes issued thereunder, or Regulation (EU) 1227/2011 on wholesale energy market integrity and transparency – take precedence over domestic law in the event of conflict. The Energy Law is complemented by a body of sector- specific legislation that establishes a dedicated regu- latory regime and, where applicable, a tailored sup- port framework for a particular technology or market service, including: • the Renewable Energy Sources Act (“RES Act”) (20 February 2015), which governs renewable energy generation and establishes an auction-based contract for difference (CfD) support mechanism administered by the President of ERO; • the Offshore Wind Act (17 December 2020), which establishes a permitting and support regime for offshore wind in the Polish Baltic Sea zone, with Phase I based on administratively set prices, and Phases II and III based on competitive auctions; • the Capacity Market Act (8 December 2017), which establishes a technology-neutral reliability mecha- nism with capacity payments for generators, stor- age and demand response; new-build assets may receive agreements of up to 17 years; and • the Atomic Energy Law (29 November 2000), which governs the licensing and safety oversight of nuclear activities; a dedicated investment support framework for the planned first nuclear plant is under development. Environmental protection legislation and building law also play an important role in the permitting of genera- tion and network projects. 1.2 Principal State-Owned or Investor-Owned Entities Transmission The Polish transmission system covers grids with a nominal voltage of 220 kV or more. It is operated by PSE S.A., which is the single state-owned TSO and is responsible for developing the transmission grid, ensuring system security and adequacy, and manag- ing cross-border interconnections. It also operates the balancing market, ancillary services markets and the capacity market. PSE does not carry out generation or electricity trading activities.
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