Natural Gas Market

Structure of the
Polish Gas Market

A High Degree of Monopoly

The structure of the gas sector remains highly monopolized. This is due to the market dominance of a single capital group, PGNiG, which, either directly or through its subsidiaries, conducts all the aforementioned types of activities, covering 98% of the market. As a result, the Polish gas market is effectively a single-supplier market. In the absence of competition, prices are subject to tariff regulation and approval by the President of the Energy Regulatory Office (URE). On July 1, 2007, the PGNiG Capital Group implemented an organizational and legal separation of its operations, specifically the technical transmission of gas from its sales activities. This was in compliance with the provisions of the Energy Law Act. As a result of this separation, customer service for gas trading was divided, and Gas Distribution Companies now focus on the technical distribution of gas, serving as Distribution System Operators (DSOs) in this role.

Liberalization of the Natural Gas Market

The creation of a unified virtual gas trading point in Poland by Gaz-System and the initiation of gas sales on the Polish Power Exchange (TGE) laid the foundation for its liberalization. Another significant change was the introduction of the statutory exchange obligation and the resulting division of PGNiG into two companies.

As a result, liquidity on the exchange increased significantly, and comparable conditions for natural gas purchase costs were created for all gas trading companies in Poland.

Market Participants

The Process of Changing Natural Gas Suppliers

Conclusion of a Contract with a New Supplier

To ensure continuity of energy supply, the new contract should take effect on the day following the expiration of the current sales agreement with the existing supplier.

Termination of the Sales Agreement with the Current Supplier

The first change usually involves terminating the so-called comprehensive agreement, which covers both the terms of energy sales and the provision of distribution services.

Conclusion of a Distribution Service Agreement (this step may be carried out by the new supplier)

In the event of terminating a comprehensive agreement, a new distribution service agreement with the distribution system operator (DSO) must be signed. This agreement takes effect on the day following the termination of the previous comprehensive agreement. Such an agreement can be concluded for an indefinite period. It does not need to be terminated or re-signed during subsequent supplier changes.

Informing the DSO about the Conclusion of a New Sales Agreement (this step is performed by the new supplier)

The notification must comply with the standards adopted by the relevant DSO. Based on the received information, the DSO, within no more than 5 business days from the date of receiving the supplier change request, conducts a formal verification and checks whether the customer is located within its area and is billed in its billing system. Upon completing the verification, the DSO sends confirmation of the registration of the request to both the customer and the new supplier or issues a rejection due to: missing or incorrect data in the request, lack of a general agreement with the supplier, or another formal reason. If the verification results in a negative outcome, the supplier change procedure will be interrupted and must be repeated after addressing the reasons for the negative verification.

Conclusion of the Distribution Service Agreement (This step can be performed by the new seller)

After changing the electricity supplier, it may be necessary to adjust the metering and settlement system. The responsibility for adjusting the metering and settlement system lies with the owner of the system (for tariff A and B, the system owner is the consumer, while for tariff C, the system owner is the Distribution System Operator - OSD).

Final settlement with the current supplier

The meter reading is taken on the day of the supplier change, which is the effective date of the new sales contract. The Distribution System Operator performs the reading. The operator provides the meter reading (the reading on the day of the supplier change) to both the current and new suppliers within the specified time frame. Based on this, the current supplier prepares the final settlement.