1

Regulatory trends in PolandEnergy Regulatory Office

Department for Promotion of Competition

16th September 2009

2

Main developments

I. Situation at wholesale electricity marketII. New rules for Balancing MarketIII. Project of new Energy PolicyIV. Privatisation process

3

I. Situation at wholesale electricity market - prices

Decrease of electricity prices on wholesale market was noticed:

Source: The Energy Market Agency.

1st quarter of 2009 2nd quarter of 2009

Change %  zł/MWh €/MWh* zł/MWh €/MWh

Sale from public power plants 206,13 49,90 188,75 45,69 -8,43

Sale for incumbent suppliers – former distribution companies 213,78 51,75 196,80 47,64 -7,94

* * Monthly average rate of Eur in August 2009 by National Bank of Poland

4

I. Situation at wholesale electricity market – demand for electricity & generation capacities

10 000

11 000

12 000

13 000

14 000

15 000

01_2

008

02_2

008

03_2

008

04_2

008

05_2

008

06_2

008

07_2

008

08_2

008

09_2

008

10_2

008

11_2

008

12_2

008

01_2

009

02_2

009

03_2

009

04_2

009

05_2

009

06_2

009

07_2

009

National consumption of electricity [GWh]National consumption of electricity [GWh]

Source: TSOSource: TSO

5

I. Situation at wholesale electricity market – demand for electricity & generation capacities

15 000

16 000

17 000

18 000

19 000

20 000

21 000

01-07_2008 01-07_2009

National average demandNational average demand [MW] [MW]

Source: TSOSource: TSO

6

II. New Balancing Market rules Since January 1st of 2009 new Balancing Market rules are in force, among main changes are:

Modification of pricing rules for forced generation of electricity for balancing purposes,

Modification of pricing rules for start up of active Generation Units,

Introduction of marginal prices mechanism for determining values of deviations,

Modification of pricing rules for generation constrains and for electricity in failure situations,

Modification and extension of a scope of information published by TSO,

Setting of specific rules for wind power plants participation in Balancing Market.

7

II. New Balancing Market rules

Since December 1st, 2009 possibility for intra-day submission of commercial schedules to Balancing Market will be launched into operation.

8

III. Draft of new Energy Policy of Poland till 2030

Main goals of draft Polish Energy Policy:

Improvement of energy efficiency, Security of fuels and electricity supplies, Introduction of nuclear power industry, Development of competitive power market, Limitation of power industry impact on environment.

9

IV. Privatisation Current privatisation plan is an updated version of a plan from Appril

2008. Among the most important assumptions of this plan are:

Conclusion of ENEA S.A. privatisation which was introduced at Warsaw Stock Exchange (WSE) in November 2008 (sale of controlling share),

Sale of PGE S.A.s’ 10% of shares via WSE in 2010,

Sale of minority share of TAURON S.A. in 2010 via WSE or negotiations,

Sale of controlling share of Energa S.A. in 2010 via negotiations,

10

Thank you for your attention !