Poland is missing out on cheap energy from renewable sources because the capacity charge mechanism penalises industry for consuming power precisely when supply is at its highest. At the same time, the mechanism does not support Poland’s electricity system, which is undergoing rapid transformation and urgently needs consumers to make their consumption more flexible in order to maintain stability. Under the current system, we are also failing to capitalise on the opportunity to reduce the costs of the entire capacity market, which are expected to amount to approximately PLN 200 billion.
The Reform Institute’s report ‘Capacity fee supporting flexibility. Proposed directions for reform’ proposes solutions that could change this situation.

Capacity fee – you pay more when electricity is cheapest 

The capacity fee is levied on industrial customers for every megawatt-hour consumed between 7.00 and 21.59 on working days. It is during these hours that solar power generates the most energy, and any surplus is wasted through non-market reallocation rather than being channelled to production facilities. Companies wishing to increase their consumption during daylight hours face a potential six-fold increase in this charge. 

The current mechanism rewards a ‘flat’ consumption profile through a so-called discount. Companies that consume energy evenly throughout the day pay just 17 per cent of the base rate. Those that attempt to respond flexibly to signals from the system fall into the group without a discount and pay 50 per cent, 83 per cent or 100 per cent. In 2026, the capacity charge rate rose to a record level of over 200 zł/MWh – not only because the cost of the entire capacity market has increased, but also because more and more businesses are optimising their consumption profile and qualifying for the discount group, which shifts the costs onto other consumers. 

Renewable energy is being wasted, and the system is suffering as a result 

The scale of the problem is growing in line with the share of renewable energy sources in the system. According to the accelerated transition scenario (WAM) from KPEiK, energy production from solar and wind is set to reach 47 per cent of total electricity generation in Poland by 2030 and 63 per cent by 2040. Non-market-based curtailments are already a problem today, and their scale will continue to grow. Furthermore, these periods partially overlap with the hours during which the capacity charge is levied, a charge that incentivises constant consumption. 

The redispatching of energy from renewable sources peaks between 10:00 and 15:00 – precisely during the hours when the capacity charge is applied (7:00 to 21:59) 

The result is paradoxical: companies that would like to relieve the strain on the grid by absorbing surplus photovoltaic generation incur higher costs than those that do not. For industry, the transition away from fossil fuels will entail the need for direct electrification of processes, particularly those relying on low- and medium-temperature heat (up to 400°C). To this end, industry should make maximum use of available renewable energy, for example by using electric boilers or hybrid systems during periods of surplus generation. 

All reform options are better than the status quo 

The report analyses four alternative models for calculating the levy and compares them with the current mechanism using the example of three hypothetical industrial consumption profiles, each utilising different technologies. The conclusions are clear: each of the options promotes flexibility more effectively than the current system. 

For example, the variant based on the model operating in Italy (a type of two-zone tariff) involves the precise determination in advance of 500–1,000 peak hours (defined as the annual peak consumption period) – that is, just under 6 per cent of all hours – and charging a rate more than a dozen times higher for them than outside this period. Peak hours would be announced by the operator in advance, enabling plants to plan for lower consumption during this time (e.g. by using energy storage facilities) and to increase it during periods of high renewable energy production. Such a mechanism sends a clear price signal to industry and does not penalise energy consumption during the hours when renewable energy sources are producing the most. It also supports the system. The other options are also based on changing the scope of the capacity charge and/or removing the discount. 

Marta Anczewska, Head of Energy Policy: We hope that these will make a valuable contribution to the work on the reform, which is urgently needed. This is confirmed by representatives of both industry and network operators. 

The reform must protect energy-intensive companies during the transition period 

The Institute for Reforms emphasises that the abolition of the discount, whilst necessary from the system’s perspective, would mean increased costs for companies with a flat consumption profile or energy-intensive sectors (e.g. steel, chemicals or glass). This applies in particular to industries where the nature of production processes does not allow for a rapid change in consumption patterns. The report recommends the introduction of temporary compensation mechanisms as part of a broader industrial policy, which would cover the increased costs of the capacity charge for these enterprises in a justified manner. 

A need for dialogue 

The reform should also be conducted transparently: with the involvement of expert communities and in coordination with the new capacity market model currently under negotiation. An initial reduction in the hours over which the charge is calculated – to eight hours a day, broken down by quarter – could be implemented by a decision of the Energy Regulatory Office (URE), without the need to amend the Act.