BACKGROUND

The President of Poland signed on the 16th August 2013 the so-called “little energy three-pack”, i.e. the amendment to the Polish Energy Law and several other acts. The main purpose of the amendment was to adjust Polish law to the Directives of the EU's Third Energy Package, i.e. 2009/72/EC, 2009/73/EC and Directive 2009/28/EC related to the promotion of RESs (i.e. renewable energy sources), as well as the liberalization of the internal electric and gas energy markets. The Polish government was supposed to implement the first two directives into the national law until the 3rd March 2011 and the third directive until the 5th December 2010. Faced by the inevitable fines of €133,228.80 per each day of delay in implementation, the Polish government had to act fast and thus the hasty decision of adopting the amended act as soon as possible. The regulation will enter into force on the 11th September 2013.  

THE REGULATION  

One of the main changes in the Energy Law introduced by the “little energy three-pack” is the insertion of the mandatory public trading in gaseous fuels on commodities exchange for energy companies engaged in the trade of gaseous fuels. According to the amended act – from now on they will be obliged to sell a given percentage of their total gas volume on a commodities exchange or on a market organized by an entity which operates in the territory of the Republic of Poland a regulated market. The introduction of this obligation is a direct reaction to European Commission’s pleas concerning the lack of liberalization of the gas market in Poland.  

The act specifies that companies engaged in the trade of the gaseous fuels are obliged to sell on a commodities exchange or on regulated market ("exchange obligation") no less than 55% of the total volume of high methane natural gas entered by it in a given calendar year to the national transmission grid:  

  1. in entry points to the national transmission system at interconnections with gas systems of other countries (“entry points”),  
  2. by a grid of mining gas-pipes, or  
  3. by liquefied natural gas terminals. 

The act, however, introduces phases of implementation of the above obligation. They are as follows: from the 11th September 2013 until the end of 2013 – no less than 30% of the gas entered into the transmission grid, no less than 40%in 2014 and no less than 55%from the 1st January 2015 on.  

However, the law does not concern all of the natural gas entered into the transmission grid – it enumerates conditions that, if satisfied, exempt the companies from the exchange obligation. First of all, the obligation does not concern natural gas that makes up the compulsory stocks required by a separate act. Neither does it concern the natural gas taken off the transmission grid in a given year through exit points from the national gas systems at interconnections with gas systems of other countries, in the amount equal to the amount of natural gas entered to the transmission grid in entry points to the national transmission system in the same year. The gas sold to gas system operators for the purpose of fulfilling their tasks stipulated in law regulations as well as used for the own needs of the energy companies is neither subject to the statutory obligation.  

What is more, energy companies engaged in the foreign trade of natural gas which in a given year hold a right to transmission capacity in the entry points in the amount lower than 10% of the sum of capacity of all these points, are exempted from the commodities exchange obligation as well.

However, the above exemption does not apply to companies being part of capital groups (meaning groups of companies in which one of them directly or indirectly controls the others), if the sum of transmission capacity rights of the group in the entry points exceeds 10% of the sum of transmission capacity of all these points.  

In order to verify the observance of the obligation by the gas companies, the President of the Polish Energy Regulatory Office (“ERO”) requires a yearly report on the gas sold on the exchange and regulated market, until the 31st March of the consecutive year. The lack of observance of the commodity exchange obligation is penalized by fines imposed by the President of ERO that amount up to 15 % of the revenue of the company from the previous year.  

CONSEQUENCES

The “little energy three-pack” enables companies engaged in the trade of gaseous fuels to become members of the commodities exchange. From now on they will be authorized to participate in transactions concerning natural gas as well as natural gas derivatives. The Polish Power Exchange (Towarowa Giełda Energii S.A.), which until now traded mostly in electric energy, is both technically adapted and legally capable to receive new transactions on the gas market and thus the introduction of the new law should not encounter any organizational issues.  

As the President of the ERO states, the introduction of the exchange obligation is a very important step towards the liberalization of the gas market in Poland in all its segments. However, the large reform of the energy market in Poland is still yet to come – the so-called “large energy three-pack” containing three new acts i.e. the Energy Law, the Gas Law and the Act on Renewable Energy Sources is still upon debate. The project contains a complex regulation of the electric, gas and RES energy market and is supposed to fully implement all the requirements of the European Directives. The representative of the Ministry of Economy stated recently that the government had come to an agreement upon the reform and whole package should be ready to sign by the President yet in 2013. However, the actual stage of the legislative process may indicate a possible delay in introduction of the reforms.