(Bloomberg) -- Poland is becoming increasingly prone to power shortages later this decade after gas-fed power units planned by the utilities failed to win any support at a key market auction.
The nation’s grid operator PSE SA estimates it needs at least 9 gigawatts of new gas units within 10 years to replace aging coal-fired stations and prop up weather-reliant power sources. However, the power capacity market auction on Thursday, aimed at paying plants for remaining available, showed battery storage facilities securing most of the long-term contracts.
Enea SA, Poland’s third-biggest power utility, said it had to withdraw its 1.25 gigawatts of planned gas units due to too low a price at the auction. For the grid operator, it proves that the mechanism requires “far-reaching changes.”
“What’s necessary is a support system that would ensure long-term revenue for investors ready to provide stable capacity to the system,” PSE said in an emailed response to questions from Bloomberg News.
Lack of additional units may lead to a “significant” increase in power prices and issues with maintaining the system’s security, it warned.
Balancing Act
PSE argues that gas-fired units are relatively quick to build and would be able to fill the potential power gap, while the battery storage systems just aren’t enough to keep up supply through long periods without solar and wind generation.
The Polish operator, which last month resorted to declaring a state of emergency amid low renewables output, pointed to neighboring Germany as an example of recent market distress. German power prices spiked in the past couple of days to a level not seen since the energy crisis in 2022 as wind generation receded.
Due to its reliance on coal, Poland is currently facing one of the highest electricity prices in the European Union, a factor that may undermine its competitiveness after years of rapid economic growth.
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