Energy transition and energy security does not necessitate the monopolisation of the electricity market by a state-owned company.

The Romanowski and Partners Law Firm has prepared an opinion for the Senate Extraordinary Committee on Climate Change on the Act on the Principles of Guaranteeing the Obligations of the National Energy Security Agency ("NABE") by the State Treasury.

The Committee, at its meeting on 6 September 2023, after hearing the arguments of the Firm presented by Prof. Michał Romanowski, Adam Romanowski and Advocate Filip Wawrzak, unanimously voted against the Bill. The Senate of the Republic of Poland rejected the bill on 7 September this year.

The issue of the establishment of NABE can be described as a systemic problem for the Polish economy and society. Indeed, the consolidation of coal assets in NABE would shape the picture of the Polish energy market for the coming years and to a significant extent determine the prices that Poles and Polish entrepreneurs will pay for the energy supplied.

The NABE Act envisaged the creation of an entity that controls the generation and sale of about 50% of the electricity in the national market and a significant part of the controllable generation capacity. The creation of NABE carries a huge risk of reduced competition and high electricity prices, determined by the cost of generation by NABE under the merit order mechanism. In addition, state aid provided exclusively to Treasury-controlled concerns in the absence of concentration control, may lead to the domination of zero and low-carbon generation by Treasury-controlled entities (today the Ministry of State Assets).

We expressed the view that Poland's energy transformation and energy security does not enforce a state monopoly in the energy market leading to the disappearance of free competition, which is always to the detriment of the economy and households.

Our principal comments related to:

• the lack of legitimacy of the exclusion of concentration control by the President of the OCCP and the risk of finding violations in the follow-up control;
• the risk of considering support granted to energy concerns controlled by the State Treasury as unlawful state aid;
• monopolisation of the electricity market by energy concerns controlled by the State Treasury to the detriment of private entrepreneurs;
• the de facto setting of the price of electricity in Poland by NABE under the merit order mechanism to the detriment of entrepreneurs and consumers.

Link to opinion: HERE