Is there still a need to freeze energy prices?

Trends in wholesale energy prices on European markets show that we have relative stability in this area. Therefore, we should be thinking hard about how to get back to the market, which is already claiming for itself through attractive offers from some sellers, analyses mec. Aneta Dybińska, energy expert at BWW law firm.

 

  1. The formal legal basis, i.e. what happened?

President Andrzej Duda signed the amendment to the Act of 27 November 2024 on ‘Amendment to the Act on emergency measures aimed at limiting the amount of electricity prices and support for certain consumers in 2023 and 2024 and certain other acts.’

Published in the Journal of Laws under item 1831, the Act entered into force on the day following the date of publication, i.e. on 12 December this year.

  1. Material implications, or what does this mean?
  • The signed law assumes that for the first three quarters of 2025, the maximum electricity price cannot exceed 500 PLN/MWh net for households. At the same time, it assumes a move away from price freezing for other consumers.
  • Without freezing, consumers would pay around 623 PLN/MWh net. This is the average price of electricity in tariff group G, which results from the tariffs of ex-officio sellers approved by the President of URE for the period from 1 July 2024 to 31 December 2025.

 

  1. The material consequences, i.e. who will pay for it and from where?

According to calculations confirmed by the Ministry of Finance, the price freeze for the first nine months of 2025 will cost just over PLN 5 billion. The money for compensation will come from the COVID-19 counteraction fund.

 

  1. Expert commentary: it is high time to return to the market and competition

Energy law can be described as a thicket of regulations, which are constantly increasing. With any such legislative activity, it is worth asking ourselves: is a given intervention in the form of a law or amendment necessary? Why and for how long will it be needed?

Each successive legislative intervention in energy prices may result in the belief, and ground this image among Poles, that energy prices will no longer rise at all, and even if they do, the state will always cover the difference. Maintaining the ‘price freeze’ in a situation where prices on the market are falling not only does not help competition among sellers, as a consequence of which customers benefit. In addition, a situation of prolonged ‘freezing’ removes the sense of responsibility, energy conservation and rational use from energy consumers.

The second half of next year is the high time to get out of this vicious circle and return to the market. For the sake of both customers and sellers.