POLAND Law and Practice Contributed by: Tomasz Młodawski, Krzysztof Cichocki, Łukasz Wyszomirski and Krzysztof Fasula, Sołtysiński Kawecki & Szlęzak
Distribution Distribution grids with a nominal voltage of up to 110 kV are operated by the DSOs licensed by the Presi- dent of the Energy Regulatory Office. There are five major DSOs responsible for the operation and devel- opment of distribution grids within the respective regions of Poland, four of which (PGE Dystrybucja, Tauron Dystrybucja, Enea Operator, and Energa Oper- ator) are ultimately controlled by the State. The fifth major DSO operating within the capital city of Warsaw (Stoen Operator) is controlled by the German-based E.On group. Apart from those major DSOs, there are tens of DSOs controlled mainly by private investors and operating smaller distribution networks located within industrial and commercial zones. Generation Electricity generation in Poland remains concentrated. The four main state-controlled groups – PGE, ENEA, Orlen and Tauron – together account for about 64.6% of domestic generation. Based on 2024 data, PGE is the largest generator with a 35.8% share (55.9 TWh); ENEA follows with 12.9% (20.2 TWh), Orlen (including Energa) with 9.5% (14.9 TWh), and Tauron with 6.4% (10 TWh). The remaining 31.9% share (49.9 TWh) is attributable to many independent and smaller par- ticipants, reflecting the growing diversification of the generation segment driven primarily by the expansion of renewable energy producers. Notable independent producers include PAK (1.5%), Veolia (1.1%) and Pol- energia S.A., which is the largest privately controlled integrated energy group in Poland, with a 0.9% share. Liquidity in the wholesale market is driven by the short position of most market participants; PGE is the prin- cipal exception as a net-long generator. This structural feature shapes trading dynamics on the Polish whole- sale market and is relevant to the investment case for new generation assets. Supply (Retail) The retail supply segment is likewise dominated by the four state-controlled groups, which together account for approximately 77% of total retail electricity sales. PGE Obrót holds the leading retail position with a 32% market share (47.3 TWh); smaller shares are held by Tauron Sprzedaż (an 18% share and 26.71 TWh), ENEA (17% and 24.8 TWh) and Energa Obrót
(11% and 16.7 TWh). The remaining 23% is served by independent foreign and local suppliers such as E.On, Axpo, Fortum, Veolia and Polenergia. 1.3 Foreign Investment Review Process Poland provides an open investment climate with no statutory caps on foreign ownership in the electric- ity sector (except for power transmission, which is restricted to a single, state-owned company). None- theless, as energy is classified as a strategic sector, two review mechanisms apply to certain transactions. The Act on the Control of Certain Investments of 24 July 2015 (“Strategic Investments Act”) requires gov- ernmental consent for the acquisition of significant shareholdings in entities designated under secondary legislation as “protected entities” (mainly operators of the energy infrastructure critical to national security). Transactions that are not subject to review under the Strategic Investments Act may nonetheless require the prior approval of the President of the Office of Competition and Consumer Protection (UOKiK) under the applicable merger control regime. Regarding the substantive protection of foreign inves- tors, the applicable framework varies depending on the investor’s origin. As part of the European Union, Poland respects the freedoms established under EU treaties and protects EU-based investors. In addition, Poland maintains several bilateral investment treaties (BITs) with non-EU states, which provide substantive protections including against expropriation, unfair and inequitable treatment, and restrictions on the free transfer of capital. Poland operates under the rule of law and upholds the principle of equal treatment of domestic and foreign investors before its courts. Foreign investors have access to Polish courts on the same basis as domes- tic investors. Where applicable treaty frameworks so provide, disputes may also be referred to international arbitration, and awards rendered in such proceedings are capable of recognition and enforcement in Poland in accordance with the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, to which Poland is a party.
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