Key takeaways

• The Energy Ministry plans to reinstate the exchange obligation for electricity at a level of 55% with a view to enhancing market transparency, facilitating price calculations by the Energy Regulatory Office (ERO) and increasing trading liquidity.
• The draft includes a list of exemptions from the exchange obligation for specific electricity sale scenarios.
• In the natural gas sector, the obligation is to be raised from 55% to 85%, which should result in higher supply, more offers on the TGE and lower wholesale prices.
• The changes are also intended to reduce price speculation, improve competitiveness and transparency as well as support smaller market participants.
• Increasing the scope of the exchange obligation on both the electricity and natural gas markets should also amplify the importance of the Polish Power Exchange as a significant regional player within the single EU energy market.
• The Council of Ministers is scheduled to adopt the amendment in Q3/2025.

Background

The exchange obligation for electricity was in force in Poland from 2010, with its scope gradually expanded until full coverage of electricity generated in Poland was reached in 2018. Although formally it applied to 100% of transactions, numerous exemptions were in place. In subsequent years, the regulations were gradually relaxed, leading to their complete repealing in 2022 (effective from 2023). The decision to do so was justified on the grounds of the “maturity” of the market and the need for deregulation, especially since more than half of the transactions concluded were already conducted outside the exchange.

However, the repeal brought several negative consequences. Some consumers faced difficulties in securing energy purchase agreements, prices became more vulnerable to speculative activity and competition in the wholesale market declined - over 70% of transactions were conducted within capital groups. The level of transparency on the electricity market has also decreased significantly because of the lack of an obligation to publish data on over-the-counter (OTC) transactions.

In the natural gas sector, the Ministry of Energy indicated that the low level of the exchange obligation has reduced market competitiveness, made it more difficult to determine reference prices and negatively affected industrial consumers, particularly those operating in energy-intensive industries. As a result, natural gas prices on the Polish Power Exchange have become less attractive compared with other European markets.

Overview of the proposed amendment

The amendment will reinstate the obligation for 55% of the electricity generated by producers to be sold via the Polish Power Exchange or platforms operated by NEMO. Sanctions are planned for non-compliance with this obligation.

At the same time, a number of exceptions exempting specific cases from the obligation to sell electricity through the exchange are contemplated. Such exemptions are to apply to, for example, electricity delivered to end users via direct lines, electricity generated from renewable energy sources in units with a capacity below 10 MW and electricity produced in units with a capacity of up to 50 MW other than Renewable Energy Sources (RES). The obligation also does not apply to electricity generated in cogeneration units with an average annual efficiency exceeding 52.5%, electricity consumed for own needs, electricity used by power system operators to perform their statutory duties and electricity produced in units directly connected to the installations or distribution networks of end users. An exemption also applies to electricity sold under contracts with end users for energy from RES, registered with the ERO, excluding intra-group transactions.

For the natural gas market, the draft proposes raising the exchange obligation from 55% at present to 85%. No changes are planned regarding the existing sanctions for non-compliance.

Conclusion

It is assumed that the reintroduction of the exchange obligation for electricity at the level of 55% will have a positive impact on the transparency and accuracy of calculating average quarterly electricity prices by the ERO. This change is also expected to increase the liquidity of electricity trading.

The increase in the exchange obligation for natural gas is expected to result in a higher supply and a greater number of offers on the Polish Power Exchange, which should lead to a decrease in wholesale market prices. This change is also intended to improve the competitiveness and transparency of the gas market, enable more effective control over potential price manipulation and level the playing field for smaller gas trading companies.

There is no doubt that the TGE will also be a beneficiary of the planned amendment, as its role as a crucial regional player within the single EU energy market will increase.

The Council of Ministers is scheduled to adopt the amendment in Q3/2025.

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