(Adds quote, detail)
By Lidia Kelly
KATOWICE, Poland May 11 Poland could set up a
power capacity market under certain conditions, EU Commission
Vice-President for Energy Union Maros Sefcovic said on Thursday.
Poland, which produces most of its electricity from coal,
hopes to launch a capacity market in which producers are paid to
keep power plants online to generate electricity when needed.
"After our very profound analysis and sector-wide inquiries
the European Commission concluded there might be circumstances
where capacity mechanisms and capacity markets would be needed,"
Sefcovic told the European Economic Congress in Katowice,
"At the same time, we also proposed several conditions which
should be met before the capacity markets are introduced," he
Capacity mechanisms can make power supply more secure but
the European Commission is worried that if not designed properly
such a system could hinder competition and electricity flows
across borders. It could also lead to higher electricity prices
"The planned law on capacity market in theory secures Poles
against breaks in power supplies. In practice, though, this is
another tax, which would preserve Poland as a coal energy
heritage park," environment non-government group Polish Climate
It calculated that launching a capacity market in Poland
would increase the electricity bill of an average household by
120-140 zlotys ($36) annually.
Sefcovic said that a proposal should take those aspects into
consideration, but that there are also more conditions.
"It should be temporary because through the capacity market
you should actually cure the problem on the market itself," he
"The last condition was that if you want to invest and use
public support for such a capacity mechanism you should also
make sure that you are supporting the best available
The European Commission has proposed a limit on emissions of
550 grams of carbon dioxide per kilowatt-hour for new plants,
something which Poland has called that "unacceptable".
"We have a very intense exchange (with the EC) on this
subject, on different solutions, proposals," Deputy Energy
Minister Michal Kurtyka said at the conference.
"We are working to ensure that this mechanism is transparent
to take under consideration neighbouring countries, so we are in
a position to move forward and compete in this important area as
quickly as possible," Kurtyka said.
($1 = 3.8899 zlotys)
(Writing by Agnieszka Barteczko)