Moody'son July 19 reported its projection of Poland's power prices to be 145 Polishzlotys per MWh to 165 zlotys/MWh in the next five years from the current 163 zlotys/MWh,reflecting the rating agency's expectation of minimal changes to the country'scoal-dominated fuelmix.

"Althoughwe currently expect growth in renewable capacity to slow, we expect continuedpressure on power prices due to low coal prices, increasing interconnectorcapacity, and broadly flat CO2 prices," Moody's Vice President and SeniorCredit Officer Joanna Fic said.

Therating agency noted that the design of the proposed capacity market, intendedto incentivize new investments and discourage retirement of thermal capacity,is yet to be determined, "and no capacity revenues will flow before 2021."

Amongthe four largest Polish state-owned electricity groups, is seen as the most vulnerableto subdued power prices, attributable to its "high share of market-exposedgeneration," while Energa SA's "high share of regulated distributionnetwork cash flows" makes it the least exposed to the price collapse, saidMoody's.

As of July 18, US$1 isequivalent to 3.96 Polish zlotys.