Revised energy law – key regulatory changes and what they mean for energy market participants

As a result of the amendment, a number of new institutions have been introduced into the Polish legal system, the powers of the President of the Energy Regulatory Office have been expanded, and a series of regulations relating to the operation of the Central Energy Market Information System (CSIRE) have been introduced.

Among the most important changes introduced under the aforementioned amendment, the following should be noted:

• increased availability of a direct helpline for consumers;
• the creation of an online comparison tool for electricity suppliers’ offers for consumers;
• the creation of a citizen energy community;
• the possibility for consumers to enter into contracts with dynamic pricing;
• the possibility of switching electricity suppliers within 24 hours;
• a new reserve sales model for electricity customers;
• an obligation to conclude only comprehensive contracts with domestic gas or electricity customers;
• changes concerning the operation of the Central Energy Market Information System (CSIRE);
• an additional condition for granting, amending or revoking a licence in the form of a guarantee of the proper performance of the activities covered by the licence;
• expansion of the powers of the President of the Energy Regulatory Office, by granting him the prerogative to draw up guidelines on the direction of network development and the implementation of priority investments.

In addition to the above changes, the amendment introduces a number of new institutions, among which the following should be highlighted in particular:

• peer-to-peer trading in energy from renewable energy sources (P2P), P2P), the definition of which is set out in the amended Article 3(55c) of the Act of 10 April 1997 – Energy Law (i.e. Journal of Laws of 2023, item 295, as amended; hereinafter: “EL”). This is a new model for the sale of energy generated by a prosumer or collective prosumer to other system users on the basis of a contract specifying, in particular, the conditions for the automated execution of the transaction and payment for it directly between the parties to that contract, or through a third-party system user or a company operating a commodity exchange. As stated in the explanatory memorandum to the draft Act: “The aim of the proposed provisions is to leave P2P trading participants as much freedom as possible regarding decisions on whether to participate in this form of energy trading, the choice of how to organise P2P trading, and finally the choice of the provider of the electronic platform enabling such trading. In the opinion of the drafters, this approach will allow the necessary experience to be gained within a relatively limited local ‘environment’ of P2P market participants, which may, at a later stage, result in the scope of P2P trading being expanded and the relevant regulatory instruments being adapted accordingly.”;
• aggregation – as defined in Article 3(6e)(e), this is an activity consisting of combining the capacity or volume of electricity offered by consumers, electricity generators or electricity storage facility owners, taking into account the technical capacity of the grid to which they are connected, for the purpose of selling electricity, providing system services or flexibility services on electricity markets;
• flexibility service – as defined in Article 3(11k) of the Act, this refers to services provided to the electricity distribution system operator by an aggregator or system users who are active consumers, generators or owners of electricity storage facilities, whose networks, installations or equipment are connected to the electricity distribution network, excluding the coordinated 110 kV network, with a view to ensuring the security and enhancing the efficiency of the distribution system’s development, including the management of network constraints within the electricity distribution network, excluding the coordinated 110 kV network;
• active consumer – in accordance with Article 3(13e) of the Electricity Act, this is an end consumer acting individually or as part of a group who:

1. consumes electricity generated on their own premises or
2. stores self-generated electricity, or
3. sells self-generated electricity, or
4. implements projects aimed at improving energy efficiency within the meaning of Article 2(12) of the Act of 20 May 2016 on energy efficiency (Journal of Laws of 2021, item 2166), or
5. provides system services, or
6. provides flexibility services

– provided that the activities referred to in points (b) to (f) do not constitute the core business activity of that customer, as defined in accordance with the regulations issued pursuant to Article 40(2) of the Act of 29 June 1995 on Public Statistics (Journal of Laws of 2023, item 773).

The most significant changes introduced by the amendment for energy market participants are also discussed below:

1. Changes to the regulations concerning direct lines

A direct line is a solution that allows electricity generators and consumers to be connected without going through the distribution network. The changes were introduced to increase the availability of direct lines to consumers, as under the previous legal framework, direct lines were only available to consumers permanently disconnected from the National Power System. Under the amendment, direct lines will also be available to users who are currently connected to the National Power System and will remain so.

Under the new regulations, it will be possible to commission a direct line without the need to obtain the consent of the President of the Energy Regulatory Office (URE) for this purpose. The only requirement will be an entry in the register of such lines, which will be made on the basis of a notification from the entity applying to construct the direct line. The application must contain information regarding the line’s parameters, as well as an expert assessment of the impact of the line or the equipment, installations or networks connected to it on the power system, which is dictated by the need to ensure the operational safety of the National Power System.

2. Online price comparison tool

The amending Act provides for the creation of an online comparison tool for electricity suppliers’ offers for household customers and micro-enterprises. This solution implements Article 14 of Directive 2019/944 into Polish law, which requires Member States to ensure that at least electricity customers who are households and micro-enterprises within the meaning of the Act of 6 March 2018 – Business Law (Journal of Laws of 2023, item 221, as amended) with an estimated annual consumption of less than 100,000 kWh have free access to at least one tool for comparing suppliers’ offers, including offers for contracts with dynamic electricity prices.

Thanks to this, electricity consumers will be able to compare all electricity supply offers available on the market free of charge in a single online location and analyse their pros and cons. To ensure that the energy suppliers’ offers published on the comparison tool are up to date and reflect the actual scope of services provided, the legislator has obliged suppliers to submit information on changes to their offers within seven days of their introduction, and electricity suppliers will face penalties for failing to comply with this obligation.

3. Citizen energy communities (CECs) as a means of reducing energy costs

Directive 2019/944 obliged Member States to establish a new entity known as a community energy organisation, the purpose of which may be the generation, distribution, sale, consumption, aggregation or storage of energy, as well as the provision of energy efficiency services, electric vehicle charging or other energy services to its members or shareholders.

In accordance with Article 3(13f) of the Directive, a community energy organisation is an entity with legal capacity, based on voluntary and open participation, in which decision-making and control powers are vested in members, shareholders or partners who are exclusively natural persons, local government bodies, micro-entrepreneurs or small entrepreneurs within the meaning of Article 7(1)(1) and (2) of the Act of 6 March 2018 – Entrepreneurs’ Law (Journal of Laws of 2023, item 221, 641, 803 and 1414), for whom economic activity in the energy sector does not constitute the core business activity as defined in accordance with the provisions issued pursuant to Article 40(2) of the Act of 29 June 1995 on Public Statistics, and whose primary objective is to provide environmental, economic or social benefits for their members, shareholders or partners, or for the local areas in which they operate.

The creation of a legal framework for the operation of community energy groups aims to enable end-users of electricity to participate directly in the generation, consumption and sharing of electricity with other consumers, as well as to provide its members with affordable electricity, in contrast to traditional energy companies, whose primary objective is to generate profit. Participation in a community energy community is also intended to improve energy efficiency at the household level by reducing electricity consumption and lowering supply prices.

4. Comprehensive contracts for domestic electricity customers

Under the previous legal framework, energy companies could enter into separate contracts with customers for the sale of electricity and for the provision of electricity distribution services, or into comprehensive contracts.

From February 2024, the amendment introduces an obligation for energy companies to conclude only comprehensive contracts with household electricity customers.

5. New condition for granting a licence in the form of a guarantee of proper performance of the licensed activity

The amendment introduces, in Article 33(3d) of the Energy Act, an additional condition for the granting, amendment and revocation of a licence in the form of a guarantee of the proper performance of the licensed activity.

Furthermore, Article 35a of the Energy Law introduces a provision under which, prior to taking a decision on the granting or amendment of a licence, the President of the Energy Regulatory Office may verify the facts stated in the application for the granting or amendment of a licence in order to determine whether the operator meets the conditions for carrying out the business activity covered by the licence and whether they provide a guarantee of the proper performance of the activity covered by the licence.

As a result of the introduced regulation, the scope of circumstances subject to the ERO President’s scrutiny has been expanded, which will allow for the refusal to grant or the revocation of a licence in respect of entities where there are reasonable grounds to believe that they will not properly carry out the business activity covered by the licence.

This regulation allows the President of the Energy Regulatory Office to respond more swiftly in situations where there are numerous complaints from consumers regarding actions that infringe their rights, such as deliberate and large-scale misleading of consumers. The scope of protection for the market and household consumers will therefore be increased.

In addition to the above changes, the amendment to the Energy Law also introduces a number of other changes that are particularly significant for individual energy consumers. These include, amongst others:

1. the possibility of entering into contracts with dynamic electricity prices with any supplier serving more than 200,000 customers,
2. the implementation of a new model for the sale of reserve electricity,

In summary, the Act of 28 July 2023 amending the Energy Law and certain other acts (Journal of Laws of 2023, item 1681), which transposes Directive 2019/944, introduces a number of changes and new institutions, the entry into force of which has been phased in over time. These changes, in particular, strengthen the legal position of the President of the Energy Regulatory Office, who has been granted new powers, and reinforce the rights of consumers, as well as aligning the provisions of the – Energy Law to the provisions of Poland’s Energy Policy until 2040 regarding the obligation to conclude only comprehensive contracts with domestic electricity consumers.

Author

Adrian Łukasik

Radca prawny, Senior Associate

He gained his professional experience in one of Lublin's renowned law firms, dealing with civil and business law in its broadest sense. At the law firm Hewelt Wojnowski i Wspólnicy spółka komandytowa, he deals on a daily basis with current counseling in the field of business and the development of corporate documentation of companies, such as. Company agreements, bylaws of company bodies, agreements regulating relations between shareholders, resolutions of company bodies, M&A transactions. In addition to…

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