As the prices of energy in Poland are going up due to the war in Ukraine and the ongoing energy crisis in Europe, the Polish government has been introducing reforms supposedly designed to solve the problems and keep the prices low.
In the UK, one of the ways for energy consumers to ensure that they are getting the best energy deal is to use the services of an energy broker. In Poland, however, energy brokers cannot work as freely.
Energy crisis in Poland
In recent months countries around Europe have been facing rapidly increasing energy prices. Poland has also been badly affected and ‘experts warn that the 2022 energy crisis could throw the country’s energy transition off course,’ Euractiv reports.
Poland has the largest coal mining sector in Europe and the country is heavily dependent on coal for energy generation. Just last year, in 2021, coal accounted for 70,8% of Poland’s electricity production. And, Poland does not plan to put an end to coal mining until 2049.
Before the war in Ukraine, gas was growing in popularity as a more environmentally-friendly alternative to coal but as gas prices started going up, this option faded into the background.
When the prices of gas started going up, even more people than before turned to coal. But prices of this fossil fuel also went up since the invasion started. In fact, they increased threefold, according to Euractiv.
To help those who use coal to run businesses and heat homes, the government recently decided to cap prices of coal. Local authorities can now buy coal from state energy firms for 1,500 zloty per tonne and then sell it for a maximum of 2,000 zloty per tonne. At the moment, coal prices average 3,000 to 4,000 zloty per tonne, a significant increase from last year when average prices were between 800 to 1,000 zloty per tonne.
Therefore, the new law protects the most vulnerable families, many of whom rely on coal for heating.
Energy brokers in Poland
In Poland, business energy consumers have the right to choose who supplies their energy. With many different suppliers available, choosing one can be difficult but energy brokers are there to make the process easier.
Energy brokers in Poland specialise in offering professional advice to energy consumers who want to switch suppliers. They analyse the individual needs of each company and help them compare available energy contracts.
While some brokers work only with one or two energy companies, some of the brokers work with numerous energy providers.
Recent changes to prices and tariffs in the electricity market
Normally, brokers would be responsible also for telling customers which tariffs are the cheapest. Due to the tense geopolitical situation and the ongoing energy crisis, the Polish government decided to cap power prices for households and small businesses.
‘The government proposed a maximum electricity price for local authorities, small and medium-sized businesses, as well as a range of “public use entities” (including schools, hospitals and churches) of 785 zloty (€164) per megawatt hour (MWh) for up to 90% of average energy use,’ Notes from Poland writes and adds that ‘The same legislation will also provide households – which already have the cost of their first 2,000 kilowatt-hours (kWh) of electricity capped at this year’s prices – with a maximum price of 693 zloty per MWh for any usage above that limit.’
‘The price caps would apply to all electricity used by small businesses and vulnerable consumers such as hospitals and schools from Dec. 1 until the end of next year,’ Reuters reports.
As for the scope of authority that the President of the Energy Regulatory Authority has in the process of setting electricity prices, the Energy Regulator Office explains that ‘both suppliers (trading companies) and distribution companies calculate their costs and then translate these into electricity prices and charges for the delivery to final consumers. The so-calculated tariffs are submitted to the regulator for approval. This applies both to tariffs for the coming year and to changes to the tariff being currently in force.’
The regulator ensures that the price customers pay for their tariff reflects only the justified costs of energy companies and is adequate to current market conditions.
What these changes mean for energy brokers
While these recent changes protect energy consumers, they are not beneficial for energy brokers. This is because due to these reforms there is significantly less competition between energy providers. As they need to face increasing wholesale energy prices, most of them will be offering tariffs at the capped price. Otherwise they could make their contracts even more expensive. Consequently, energy consumers will notice less variety when comparing available energy tariffs.
Furthermore, climate Minister Anna Moskwa announced that capped prices will also apply to contracts that have already been signed. This eliminates the need for brokers assisting customers who want to switch suppliers in search of a cheaper deal.
Are you a Polish energy broker and you want to expand your customer base?
With competition being gradually removed from the energy market in Poland, moving to international markets might be a good option.
The UK enjoys a deregulated energy market and energy consumers have the right to choose who supplies their energy and what tariff they are on. This is why, if you are an energy broker, you should think about starting to offer services to energy consumers based in the UK.
In the UK brokers operate in a similar way as in Poland which means they help energy users find the best energy deals on the market. And, they offer additional services such as explaining to them how to lower their energy consumption and be more sustainable. So, there is no need for you to change the way you operate, you would be doing the same thing just with UK clients.
There is also a significant Polish population in the UK so by offering certain services in Polish you could beat your competitors and quickly acquire new clients.
If you want to find out more about moving to the UK market as an energy broker, get in touch with us. We are Energy Solutions, an energy broker with more than 2 decades of experience working with business energy consumers in the UK.
We know the energy market in the UK very well so we could give you access to it. And, we work with numerous UK suppliers so we could help you form partnerships with them.
If you are interested in working together, give us a call on 0131 610 1688 or send an email to nick@energybrokers.co.uk. We would love to hear from you.