From October 1, 2020, as part of the implementation of the capacity market, the so-called “capacity fee” was introduced, which, under the Capacity Market Act (Act of December 8, 2017), appears in settlements related to the electrical energy distribution service.
The obligation to collect the capacity fee has been set for the period starting from January 1, 2021. The funds collected from this fee will be used for the construction of new power plants and the modernization of existing ones, to ensure the stability of electrical energy supply for end consumers.
What is the capacity fee?
It is a cost transferred to the end consumer resulting from subsidies to generation sources in exchange for the capacity they make available to Polskie Sieci Elektroenergetyczne (Polish Power Grid, PSE) to maintain the required reserve capacity in the National Power System. The cost of the total electrical capacity contracted by the PSE through tender, which remains ready to be supplied to the system, has been transferred to all consumers as the capacity fee effective from October 2020.
Why is the capacity fee collected?
To gather funds for the payment of remuneration for the service of remaining ready to supply electrical capacity to the power system and delivering this capacity to the system during periods of threat.
According to the tariff calculation principles, capacity market costs are allocated to justified costs as a service of maintaining network stability, therefore they are transferred as a component of the tariff fee for the distribution and transmission of electrical energy.
According to Article 70(1) of the Capacity Market Act, the rates of the capacity fee are determined separately, in relation to end consumers:
1) for households – as a monthly rate, dependent on annual electrical energy consumption.
2) other than those specified in point 1 – as the rate applied to the volume of electrical energy drawn from the grid during selected hours of the day, expressed in PLN per kWh of electrical energy.
The record indicates that for all entrepreneurs, the capacity fee is added to the actual energy consumption in [kWh], but only “during selected hours of the day”, meaning during specific peak demand hours.
Each year, the President of the Energy Regulatory Office determines and publishes not only the capacity fee rates for the following year but also the peak demand hours in the system, separately for each quarter of the delivery year (peak hours change each quarter, particularly concerning the afternoon peak).
The reason that may still hinder the implementation of the executive regulation establishing the method for determining the hours during which the capacity fee should be added is the metering and billing systems installed at consumers’ premises. Their readings are adapted to programming hours in the existing maximum of three tariff groups or do not have time zones at all. Determining peak demand hours for the collection of the capacity fee at times other than existing zones will require the registration of hourly consumption by all metering systems in the country.
As a result, the currently applicable hours are in accordance with the hours of the so-called threat period specified in the Regulation of the Minister of Energy dated July 18, 2018, on the execution of the capacity obligation. In 2021 and 2022, it was set as constant throughout the year and charged from 07:00 to 22:00 on working days.
The variability and standard deviation of demand profiles at the point of exchange with the external public network become significant in light of the amendments to the Capacity Market Act (of July 23, 2021) adopted in June 2021, aimed at introducing reductions in the capacity fee depending on the daily variability of the electrical energy consumption profile. The new condition for calculating the possible reduction in the capacity fee is based on the ratio of average electrical energy consumption during peak demand hours in the power system, i.e., during the hours when the capacity fee is charged, to the average electrical energy consumption during the remaining hours of the day.
The variability of the daily profile is calculated according to the formula contained in the specified Act:
where individual symbols stand for:
∆s – daily energy consumption difference index [%]
n – hour of the day when the capacity fee is applicable [h]
m – hour falling outside the hours when the capacity fee [h] is applicable
ZSn – volume of electrical energy consumed in hour n, [kWh]
ZPSm – volume of electrical energy consumed in hour m, [kWh]
Discounts on the fee are calculated separately for four categories of consumer groups, for which daily consumption fluctuates within specified limits. For consumers whose ∆s index falls within the ranges: up to 5%, from 5% to 10%, and from 10% to 15%, reduction coefficients for the fee are introduced as follows: 0.17; 0.5; 0.83.
| Stawki opłaty mocowej | Capacity fee rates |
| 102,4 zł/MWh w 2023 126,7 zł/MWh w 2024 | PLN 102.4/MWh in 2023 PLN 126.7/MWh in 2024 |
| pobierana przez 15 godzin (0700-2200) | drawn for 15 hours (0700 – 2200) |
| Ulga w opłacie mocowej | Capacity fee relief |
| K: współczynniki zmniejszające opłatę w zależności od poziomu odchyleń profilu zużycia dobowego między | K: reduction coefficients for the fee depending on the level of daily consumption profile deviations between |
| K < 5% to zniżka 83%, K < 10% to zniżka 50%, K < 15% to zniżka 17% | K < 5% is a discount of 83%, K < 10% is a discount of 50% K < 15% is a discount of 17% |
| S – szczyt | S – peak |
| P – poza szczytem | P – off-peak |
The capacity fee cannot be avoided, but there are many ways to reduce its amount. One of the options is the previously mentioned project in photovoltaics. Reducing electrical energy consumption also means reducing the capacity fee.
Sources:
Grzegorczyk Filip (ed.), Wiśniewska Urszula (ed.), Rynek mocy. Komentarz, Published: WKP 2021.
- https://www.siemens.com/pl/pl/o-firmie/aktualnosci/oplata-mocowa-nowa-pozycja-w-rachunkach-za-dystrybucje-energii-elektrycznej.html
- https://inwestycje.pl/gospodarka/ulga-w-oplacie-mocowej-dla-odbiorcow-energochlonnych/
- https://www.rachuneo.pl/artykuly/oplata-mocowa
- https://wysokienapiecie.pl/krotkie-spiecie/mkis-ulga-w-oplacie-mocowej-dla-odbiorcow-energochlonnych-wejdzie-w-zycie-1-x/
If you have any questions or concerns regarding the above matter, please do not hesitate to contact our experts:
Piotr Włodawiec: wlodawiec[at]prokurent.com
Łukasz Moczydłowski: moczydlowski [at] prokurent.com
Paweł Wróblewski: 'p.wroblewski [at] elbudbis.pl
Authors:
Piotr Włodawiec – Attorney-at-law / Senior Partner
Łukasz Moczydłowski – Attorney-at-law / Senior Partner
Paweł Wróblewski – CEO ElbudBis
Relkonds
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