The energy sector has been eagerly awaiting this announcement. The new regulation will enable additional generating units to receive financial support. Please find below key information concerning upcoming auctions.
What is the capacity market?
The capacity market is a support system that has transformed the energy market from a single-product market to a dual-product market — transactions involve not only the sale of electricity generated, but also readiness to supply this energy to the grid. The capacity market was introduced in Poland by the Capacity Market Act [2]. The purpose of the mechanism is to ensure that there is sufficient energy in the National Power System to meet the needs of end users.
In order to participate in this mechanism, eligible entities must undergo the required certification process and then participate in auctions (primary or secondary) on the basis of which entities covered by the capacity market are selected. The auction winners then conclude a so-called capacity contract, under which the capacity provider undertakes to perform, for a specified period, a capacity obligation (i.e., to remain available during the supply period to deliver a specified amount of electricity to the system through the capacity market unit, and to deliver a defined amount of electricity to the system during periods of “call on the capacity market[3]).
New additional auctions
In March 2025, new regulations came into force allowing for the organisation of additional auctions [4] If, after the primary auction, the operator (Polskie Sieci Elektroenergetyczne S.A.) determines that medium-term or long-term security of electricity supply to end users cannot be ensured, it shall submit a recommendation to the minister responsible for energy and the President of the Energy Regulatory Office regarding the need to conduct an additional auction for the delivery period covered by the primary auction.
Such a situation occurred recently, resulting in the announcement of the above-mentioned regulation concerning parameters of the auction for delivery year 2029. It entered into force on 30 April of this year.
Selected parameters of the additional auction
The regulation on parameters states, among other things, that in the 2029 auction:
- power demand will be 5236 MW;
- the entry price for a new generation unit will be 488 PLN/kW;
- the price increase factor used to determine the maximum price applicable in the additional auction will be 1.1.
- the highest corrective availability factors (CAF) are provided for, among others demand reduction units (100%), reservoir-flow hydroelectric power plants (96.09%), nuclear power plants (94.51%), combined cycle gas turbines (93.79%) and gas turbines (93.10%);
- the lowest correction factors are provided for, among others, solar power plants (2.80%), electricity storage facilities (12.33%) and onshore wind power plants (13.79%).
CAF is used to determine the level of net achievable capacity of a unit in the capacity market, which serves as the maximum capacity obligation (e.g., the maximum capacity obligation for a 200 MW combined cycle gas turbine unit with a CAF of 93.79% will be 187.58 MW).
According to the PSE announcement [5], preliminary auctions for the additional auction are scheduled to take place on 12 May 2025.
[1] Regulation of the Minister of Climate and Environment of 29 April 2025 on the parameters of the additional auction for delivery year 2029 (Journal of Laws, item 571).
[2] Act of 8 December 2017 on the capacity market (consolidated text, Journal of Laws of 2023, item 2131, as amended) ("CM Act")
[3] Article 2(1)(23) of the CM Act.
[4] Act of 21 February 2025 amending the Act on the capacity market and certain other acts (Journal of Laws, item 290).
[5] PSE announces details of preliminary auctions for the 2029 delivery year - Power Market News - PSE [access: 5 may 2025].
