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Electricity Price Freeze Until the End of September This Year. Such Mechanisms Do Not Solve the Causes of High Prices

ENERGYElectricity Price Freeze Until the End of September This Year. Such Mechanisms Do Not Solve the Causes of High Prices

According to the government’s decision, the freeze on energy prices for households at 500 PLN net per 1 MWh has been extended until September 30, 2025. This means that consumers will not feel an increase in electricity bills for at least the next nine months. “Subsidies as a way to combat high energy prices are not a good solution because they do not address the problem. A much simpler solution would be to return to cheaper sources of energy. In Poland, coal and nuclear power plants are such cheap sources,” said Member of the European Parliament from the Confederation, Marcin Sypniewski.

“High energy prices are currently a significant problem for Europeans. Ten percent of the EU population – about 40 million people – live in energy poverty. The EU still seems to ignore that it is primarily its fault that energy prices fluctuate so much, as it is the result of the Green Deal policies. I am surprised that we are still discussing how to stop the increase in energy prices, instead of talking about when we will finally end climate policy,” Marcin Sypniewski said in an interview with Newseria.

The COVID-19 pandemic, followed by the outbreak of the war in Ukraine, destabilized the European energy market. Poland, like most EU countries, introduced protective mechanisms for households, businesses, and local governments to shield them from sharp price increases. In December 2024, a law was passed that extended the freeze on electricity prices for households at 500 PLN net per 1 MWh (regardless of consumption level) until September 30, 2025. Without the extension, households would have paid 623 PLN per 1 MWh, which is the average price for the G tariff group, approved by the President of the Energy Regulatory Office (URE) for the end of 2025.

By the end of Q1 2025, local governments, public utility entities, and sensitive sectors will also benefit from frozen energy prices at 693 PLN per 1 MWh net. The cost of these protective measures for 2025 is estimated by the government at 3.98 billion PLN. However, businesses cannot expect further preferences – the law, which came into effect in December last year, does not foresee a freeze on electricity prices in 2025 for micro, small, and medium enterprises or agricultural producers outside the G tariff group.

“Subsidies as a way to combat high energy prices are not a good solution because they do not solve the problem. These subsidies are funded by taxes, so we will burden our budgets. The government or the European Union will take this money from our pockets, and we will pay twice: once for electricity, and then through taxes to lower the price of that electricity,” Marcin Sypniewski explains. “A much simpler solution would be a return to cheaper sources of energy. Meanwhile, today the European Union is fighting coal, forcing us to close even those mines where exploitation could still continue, while promoting expensive and unstable solutions. And it’s well-known that wind turbines and photovoltaics cannot sustain the economy, not even in Germany; this is not a solution. For Poland, we must rely on coal and build a nuclear power plant.”

Moving away from coal and decarbonizing the economy are key elements of the European Green Deal, the EU’s flagship strategy in response to the ongoing climate crisis. EU institutions acknowledge that the crisis causes increasingly frequent and severe extreme weather events with tragic consequences for people and the economy. As a result, in June 2021, the European Parliament approved the climate law, a set of political initiatives making the EU’s climate policy targets legally binding, including reducing greenhouse gas emissions by 55% by 2030 and achieving climate neutrality by 2050.

However, the EU’s climate policy, especially in the last two to three years, has sparked significant controversy. Last year, massive protests from farmers across Europe demanded the abandonment of the Green Deal’s assumptions. This topic became a major element of the electoral campaign before the most recent European Parliament elections, and recently, the EPBD directive (the so-called building directive), which shifts part of the effort to reduce greenhouse gas emissions onto households, stirred emotions. Businesses, particularly those in energy-intensive industries, highlight the unrealistic goals set by the Green Deal and blame EU climate policy for rising energy prices and the loss of the EU economy’s competitiveness, largely due to increasing CO2 emission allowance prices in the EU ETS.

Social protests and the reluctance of some member states have had some effect – in the last few months, the European Commission suspended some commitments related to the Green Deal, including those concerning agriculture. Ursula von der Leyen announced that the new European Commission would stick to the existing assumptions, but their implementation could undergo some changes.

“We should finally move the economy away from ideology. The economy should return to free-market principles, and energy should come from sources that are cheap. For Poland, such cheap sources are coal and nuclear power plants. We must finally start building them, because for now, we are just talking about it. These are the sources that would make energy prices lower,” says Marcin Sypniewski, Member of the European Parliament from the Confederation.

Last year’s report “Climate Policy with a Human Face” by More in Common Poland showed that most Poles see the climate policy as an opportunity for economic and social benefits, although they are skeptical about the European Green Deal. Seventy-two percent of Poles believe that, in its current form, the Green Deal will bring more losses than benefits, and over half (51%) negatively assess its impact on energy prices. Only 5% of respondents want to continue the Green Deal in its current form. At the same time, nearly two-thirds of Poles believe that combating climate change is a good investment of public funds, and the “storm” surrounding the Green Deal has not negatively affected these beliefs. Sixty-one percent of respondents see EU climate policy as an opportunity for economic growth, and 68% believe that investments in renewable energy sources will lower energy prices and increase the country’s energy security.

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