WARSAW (Reuters) -Poland’s incoming government has submitted a draft law to the country’s parliament to freeze energy prices in the first half of 2024 and liberalize rules to build wind farms.
Support for the effort would be financed from a fund set up during the pandemic to mitigate the effects of the energy crisis with contributions by Poland’s top energy firms. Shares of Orlen, Poland’s oil and gas giant, were trading sharply lower after the news.
The draft law proposes to restore the obligation to trade electricity on the country’s energy exchange, which was abolished by the outgoing Law and Justice (PiS) government.
The incoming government being formed by pro-European parties plans to kick-start the country’s lagging transition from coal to achieve up to 70% of energy production from renewable sources by 2030, compared to about 15% last year.
Poland has one of Europe’s highest spot power prices as it produces some 70% of electricity from coal, which is more costly due to the cost of carbon emissions.
Energy prices including those for electricity, gas and district heating would be frozen for households and so-called vulnerable consumers such as schools and hospitals. Orlen is the biggest contributor to the fund. Earlier this year, the company said it expected to contribute 14 billion zloty ($3.55 billion) to the fund in 2023.
“I wonder who wants to reduce the value of the ORLEN and what is the purpose of this?” Orlen CEO Daniel Obajtek said in a post on social media platform X.
Orlen shares were down 9.3% in mid-afternoon trading. PiS introduced subsidies for household consumers who installed heat pumps and solar panels, but blocked the development of onshore wind for most of its eight years in power.
The draft law would reduce a minimum distance between a turbine and a residential area to about 300 metres from the current 1,500 metres depending on the level of noise emitted by the installation. ($1 = 3.9507 zlotys)
(Reporting by Marek Strzelecki; Editing by Elaine Hardcastle and Paul Simao)
