Fortum is a Nordic energy company that has been active on the Polish market since 2003. The company initially focused on district heating operations and later expanded its presence in Poland by investing in energy production, including combined heat and power (CHP) plants. Fortum has since become a significant player in the Polish energy sector, providing sustainable energy solutions and electricity. In a conversation with Tuomas Asunmaa, Łukasz Mordasiewicz, Senior Business Manager Medium and Large Enterprise Solutions, shares his insights on the current market situation and compares Poland with other EU countries. He also mentions opportunities and recommendations for investors, key trends in the industry and how EU funds may affect the future of the energy sector in Poland.
How would you summarise the Polish energy market and key trends in 2024?
I think 2024 has been a year of certain stabilisation. This is a pleasant change after the enormous volatility the market has faced over the past three years (two years of dynamic growth followed by a year of declines). To illustrate the unpredictable situation for energy
consumers, imagine being a business customer who needs to know energy costs for the
next year and wants to sign a contract with a supplier a year in advance. In the past three
years, price fluctuations were so significant that, depending on when the decision was made,
the cost difference could be double. This makes budget planning and risk management
extremely difficult. Not to mention the problem of product competitiveness. This year, the
volatility is four times as low, which, combined with the fact that prices have returned to 2021
levels, brings more peace to the company’s purchasing processes.
However, it is worth mentioning that the price freeze mechanism for micro, small and
medium-sized enterprises, introduced in 2022 and then extended, has effectively discouraged many consumers from engaging with the energy market. As of today, the maximum price of PLN 693/MWh ends at the end of this year. If consumers do not take any action (do not sign any offers with their suppliers or do not approach new ones), they will end up on standard price lists where they will face significant increases. This is completely unnecessary, as today every consumer can secure a price significantly lower than the statutory maximum price. I encourage everyone to spend some time on this topic as it can have a significant financial impact on companies. The issue may seem obvious, but we must remember that, since the beginning of the liberalisation of the energy market in Poland in 2007, only 18% of business consumers and less than 5% of households have ever changed their supplier. It is clear that, as an energy sector, we have serious educational and promotional challenges ahead of us.
Compared to other EU countries, where does Poland stand in terms of production?
The share of renewable energy sources (RES) in the Polish power system is growing
dynamically. While in 2021 it was 15%, by 2023 it had already reached 27% (in 2024 it is likely to be 32%). The largest increase in capacity occurred in solar power plants. We are seeing this at every level, both in households, industrial installations installed behind company meters and at large-scale PV farms. However, this does not change the fact that Poland, with an emissions level of 666 kg CO2/MWh (in 2022), is an infamous leader in this ranking. For comparison, the German economy has values almost half that, while Finland’s is 8-9 times lower. This is, of course, the result of 63% of energy still being produced in coal-fired power plants, and another 10% from gas.
What would be your advice to foreign investors when they are planning or budgeting energy costs, what are the key points they need to understand about the market dynamics here?
The specific energy mix in Poland, still heavily based on fossil fuels, is also reflected in
prices. On this year’s SPOT market (the price determined daily for the next day), energy in Poland has been 30% higher than in Germany, and over 70% more than prices in the Finnish system. Unfortunately, everything indicates that this trend will stay with us for a long time. Looking at current energy contract quotations, we see that the difference between the price in Poland and Germany will widen in the coming years, from about 18% next year to as much as 40% in 2027. Of course, this is a scenario priced by the market today. We will see what the future brings.
Energy costs are not just the price of energy from the exchange. Distribution costs (energy
delivery) and additional fees are also important. In this aspect, Poland does not significantly
deviate from the EU average for business consumers. If I were to suggest anything to business consumers, it would be:
To optimise distribution costs as there is great potential here. The proper selection of ordered capacity, tariff group or reactive power compensation can generate significant and repeatable savings.
To look around. There are many cooperation models with energy suppliers available in the market. Everyone will be able to find something that meets their needs. It is not worth compromising out of fear of changing suppliers. It is always a simple and safe, and often also profitable, move.
To take some time to understand the market – both in terms of prices and energy transformation issues. These issues have gained such cost and environmental importance that they simply cannot be ignored.
The transition towards cleaner energy is a massive move in Poland - what would be
your message to Finnish companies who often have very good technology in this
industry?
Poland, as a member of the European Union and a signatory of the Paris Agreement, is aiming to reach climate neutrality. The path to achieving this is, of course, slightly different due to the level from which we are starting. However, the issue of reducing the carbon footprint is important on the government’s agenda in Poland, as well as among businesses. This is due to the obligation to report on ESG areas, which in the coming years will expand to more groups of companies. It is worth knowing that, despite the high emissions in the economy as a whole, as mentioned above, there are mechanisms available in Poland to effectively reduce it. Guarantees of origin (GoO) are available and function in the same way as on other markets. In addition, their price is similar to the European market (despite Poland not being a member of the AiB association). Many companies provide services for installing their own RES (especially PV) in various financing models. The cPPA market is developing dynamically, with contracts concluded directly with renewable energy sources. Last but not least, we have energy companies offering flexible products to support these areas and package them into a convenient and attractive product for customers.
How will upcoming EU funding shape the Polish energy markets?
It seems that the priorities in the National Recovery Plan (KPO) will include support
for energy efficiency and the development of RES in enterprises. We are already seeing
programs dedicated to these areas. Another topic worth watching will be energy storage,
which will also be able to count on significant financial support. It is worth using this time for
energy transformation.
What events or forums would you suggest participating in?
In my opinion, the problem today is not the lack of access to information, but rather too much information and the difficulty of verifying its credibility. I always encourage everyone to take the time to meet with professionals in a given field and exchange thoughts and opinions with them.
Any tips on how to follow the market, prices, and forecasts?
Access to knowledge about wholesale energy prices is very simple – you can always check
them directly on the website of the Polish Power Exchange (https://www.tge.pl/otf). This
month we launched a newsletter summarizing important events in the energy market, which
you may find it valuable. https://www.fortum.pl/gaz-i-prad/sredni-i-duzy-biznes/newsletter-dla-dużych-i-średnich-firm. We are also available on LinkedIn, commenting on current observations and curiosities that may be interesting to consumers.
Educational activities
Fortum has actively engaged in numerous events, fostering closer ties with local communities while promoting education on ecology and district heating. Fortum participated in 12 events across three cities, resulting in 8,000 interactions with residents. From family picnics to open days at the combined heat and power plant, each of these gatherings has been a step towards building stronger relationships and advocating for sustainable practices.
“Family picnics provided an excellent opportunity for direct interaction with residents. Our booths featured attractions for all age groups, from coloring zones for children to the popular ‘Wheel of Fortune’, which educated participants about district heating and energy in a fun way. Events in neighborhoods like Tysiąclecia and Zawodzie Dąbie attracted many residents, and our collaboration with local authorities contributed to the success of these events. During these picnics, we distributed 500 heathers as part of our recycling campaign, encouraging participants to exchange recyclable materials for plants.
One of the most interesting events was the open day at our combined heat and power plant in Częstochowa, which had around 200 participants. As the plant is usually closed to the public, residents had a unique opportunity to see how it operates. Visitors learned about the entire process of energy and heat production, from fuel unloading to combustion and distribution. This event not only facilitated education but also strengthened our presence in the local community as a company committed to transparency and sustainable development. Additionally, we collected loads of recyclable materials during our ‘Exchange Waste for Heather’ campaign, further promoting environmental awareness and responsibility,” said Jacek Lawrecki
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