POLAND’S POWER SECTOR FEELING THECONSOLIDATION HEAT

摘要

The Polish energy sector was by far the largest “new entrant” to the joint EU energy market inrnMay 2004. Now, one year into Poland’s EU membership, are there any Polish players visible inrnthe market? Or has EU membership finally helped along Poland’s stalled privatization process,rnpaving the way for large European utility companies to buy up Polish companies? The answer tornboth questions is a clear “no”, and this article will explain why this is the case. It will then go onrnto describe possible scenarios for mid-term development of the Polish power sector.rnThe debate in Poland has to be seen against the background of the European energy industry,rnwhere consolidation is in full swing again. This is illustrated by the marked increase of M&Arnactivity in 2004 and if looking at the combined market share of E.ON, RWE and EdF, whichrngrew from about 14% to more than 25 % between 1998 and 2003, and is bound to rise further.rnAll major European utility companies are active in Central and Eastern Europe, and Poland, asrnkey target areas for expansion. As in most CEE countries, Polish companies appear to have littlernto oppose to such powerful competitors. Neither do they possess the necessary critical size forrnsubstantial investments, nor do they grow fast enough, let alone internationally, to maintain theirrnrelative market position. CEZ, the Czech power generation and distribution company might bernthe only exception to the rule in the region.rnThe threat of Polish companies not surviving this consolidation has called both companies andrnpoliticians to action. A heated debate on the creation of one or more national champions byrnpermitting vertical integration has dominated energy policy and sector lobbying efforts inrnPoland throughout 2004 and early 2005. The power generators make the case together with thernState Treasury that allowing them to take over distribution assets would greatly increase thernprivatization proceeds for the state budget. The distribution companies with the Ministry of thernEconomy and the Energy Regulator on the other side, fear that competition and, ultimately, therncustomer, suffer if they are to be gulped by generation-focused generation giants.rnWhile not concluded yet, this discussion has at last defined an alternative to the previous,rnpiecemeal approach of privatizing assets in the energy sector whenever budget emergenciesrndemand it, while defining other assets as “strategic state properties” exempt from privatizationrnin order to avoid “national sell out”.rnThis paper outlines some possible scenarios regarding further consolidation and privatization inrnthe Polish power sector. The authors argue that there exists no alternative to vertical integrationrnand privatization. What Poland needs are strong, vertically integrated, privately-owned utilityrncompanies with a growth perspective and a substantial degree of value creation within therncountry. Whether generators take over distributors or vice versa is as secondary, as is therncountry of origin of the investor. Important is that the Polish economy profits from the presencernof viable, growing energy companies rather than just supplying generation or sales outlets ofrnsubordinary significance in international energy groups in the mid to long term perspective.