Electricity prices are breaking new records. Seemingly it is easy to explain it by inflation, Russian aggression to Ukraine or cost of raw materials. However, after a careful analysis, it is difficult to justify such high increases only with these factors. Such a puzzling, disproportionate increase in electricity prices took place on the futures market (annual contracts) on the Polish Power Exchange between 25 April 2022 and 10 May 2022. The price per MWh for 2023 rose from PLN 751.10 to PLN 1024.40 and then the growth dynamics slowed down somewhat.
Such an increase just within these two weeks should not be explained either by international events or the increase in the price of coal, which is a key fuel for the Polish energy sector. However, if costs of energy generation do not grow, it means that only margins of energy producers are growing (unprecedentedly). On the part of energy exchange buyers there are suspicions of possible price manipulation. Such suspicions are raised not only by the price increase itself, but also by the behaviour of bidders on the exchange, such as making numerous transactions in the last hours and minutes of the session. In doing so, price fluctuation limits were regularly exceeded. Despite these disturbing phenomena, the operator of the exchange failed to take action. The President of the Energy Regulatory Office is currently analysing the situation, but has not yet initiated formal investigation proceedings. This is not the first such situation when electricity prices record unexplained increases and raise doubts in the ERO. A similar situation occurred in 2018, when the regulator sent notices to the prosecutor’s office about the possibility of committing a crime.
The sharp price increase in April/May 2022 may also be a manifestation of a broader phenomenon, which is the decreasing competitiveness of the Polish electricity market.