An energized market

Agnieszka Barteczko: What do you think will be the outcome of the conflict of interests between the government's program for the energy market and the EU's proposals?

Harry Schurr: The key to the liberalized market is privatization. The government program assumes that one, dominant energy group, with the Treasury as a major shareholder, should be created in the market. [But] competition will only arise if the customers have a choice between different suppliers. The Polish energy market dominated by only one company, be it state-owned or not, would seem to hinder customer choice rather than promote it.

We expect that the European Commission will take the appropriate measures in the event that member states do not comply with EU internal market and competition rules.

How could Poland benefit from the liberalization of the energy market, both domestically and abroad?

The benefits brought by liberalization to the clients and to the economy of Poland will depend on the situation in the market. One key factor influencing energy prices is the cost of energy purchased by suppliers on the wholesale market. This cost is influenced mostly by power plants. The significant investments that are required in the short term to rebuild and adjust generation capacities to EU requirements related to environmental protection will increase energy-generation costs, thus driving energy prices up on the wholesale market. But this may not necessarily happen. We should keep in mind that, in the generation sector, there is big potential to improve efficiency. By optimizing operations, it is possible to reduce costs, which largely depends on the level of competition in the market.

How would liberalization of the market influence energy prices?

An attractive energy price, reflecting the optimized costs of its generation, transport and distribution, as well as an attractive offer of services for both individual and business customers should be the ultimate results of market liberalization.

If you were the Minister charged with making decisions about the Polish energy market what kind of strategy would you follow?

As the CEO of one of the only two privatized distribution companies in Poland I would say that in respect to the opening of the energy market in Poland we need to create a real competitive market which is in line with EU guidelines. At the beginning, to achieve this goal, the major part of the market should be privatized. Finally a completely necessary issue is to establish a clear, transparent and long-term running regulatory framework that fits the liberalized market environment.

Interviewed by Agnieszka Barteczko