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Abstract

The capacity market is a response to potential capacity scarcity in the system. The missing money problem may occur as a result of the dynamic development of renewable energy sources because their capacity factors are significantly lower in comparison to those of conventional generating units. The capacity market is a response to capacity scarcity in dynamic growth in renewable energy sources with lower capacity factors than thermal power plants. It is a support mechanism that provides additional funds in order for generation companies to be ready to produce electricity in system stress events. So far, seven capacity auctions have been held for 2021–2027 delivery periods. Since the vast majority of capacity market units are coal-fired public thermal power plants and combined heat and power plants, the analysis of capacity auction results provides valuable findings on coal consumption in the years to come. With this in mind, the objective of the study is to investigate the potential of coal consumption resulting from the long-term capacity contracts signed thus far. For this purpose, a comprehensive analysis of the capacity auctions’ results is conducted, including the analysis of the duration of the contracts, the structure of ownership, and fuels used in power units. The results show that the figures relating to the consumption of steam coal in units that have won capacity auctions are around 21,306 thousand Mg for 2023 and decreasing to 9,603 thousand Mg for 2035. Although European restrictions were introduced to limit remuneration for high-emission units, the long-term contracts ensure that these will remain in the system and will have an impact on the total consumption of steam coal in the medium- and long-term in the Polish power system.
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Authors and Affiliations

Aleksandra Komorowska
1
ORCID: ORCID

  1. Mineral and Energy Economy Research Institute, Polish Academy of Sciences, Kraków, Poland

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