Poland sets course to energy market liberalisation

Jan 10, 1997 01:00 AM

Poland's lower house of parliament has approved a draft of the new energy law, which introduces elements of free market into the sector and paves the way for its privatisation. The bill, approved in a 250 to 134 vote with 22 abstentions, abandons communist-era regulations, which protected energy producers from bankruptcy and gave the industry ministry direct supervision over them. The draft law, which needs to clear the Senate and be signed by the president, would set up a special body, the Energy Regulation Office (URE), to award licences for electricity producers and set official electricity prices. The industry ministry said last year that electricity prices could be freed within two years from the implementation of the energy law. All licensed electricity producers would have equal access to the state-owned power grid which so far has been open only to large state-owned power companies. Foreign producers would not have an automatic access to the grid. The bill also introduces competition to the sector by creating an auction system for electricity supply contracts, in which 15 largest power plants would participate. Under the current system consumers buy electricity from the nearest producer for a price set by the finance minister. The draft law would also pave the way for regional diversification of electricity prices, depending on costs of its delivery. The industry ministry, which was replaced by the economy ministry earlier this year, said the new energy law would open the way for the privatisation of the sector.
Poland's energy sector, employing 120,000 people, generates about 5 % of Poland's gross domestic product forecasted at 427 billion zlotys next year. The industry's value is estimated at 90 billion zlotys.

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