For the past 20 years, Poland has gone a long way forward in moving away from the coal monoculture with over 94% of electricity being fuelled with this fossil resources. We are eliminating coal from the energy mix faster than expected but figures do not lie - coal still makes up 70% of the domestic mix, and the truly no-emission resources are still a relatively small part of it.
However, this is only one side of the coin. The other is the photovoltaic surge, which translated into a 5.5-fold growth in the production of energy from solar sources in just two years. This is not the only developmental spike observed in the data. Contrary to the stereotype of “lost years”, the energy bloodstream of Poland has been constantly adapting to changes as well as responding to trends in Europe and the world, although not all ventures have been successful.
In the first years following Poland’s accession to the EU, bioenergy was the fastest-growing sector of the energy market, allowing the energy industry, primarily owing to the formula of co-incineration in coal units, to take advantage of EU subsidies, thereby minimising necessary investments. The first half of the second decade of the 21st century saw the rapid expansion of wind farms, which only came to a halt with the implementation of the distance regulations that calcified the market, namely the 10H principle preventing the erection of wind turbines near houses. Recent years have been dominated by a host of gas ventures, with the most prominent examples being the gas units developed at the Dolna Odra and Ostrołęka energy plants.
The craving for transformational acceleration is clearly visible in the industry which, in order to remain competitive, is more likely than ever to invest in its own no-emission resources. It is also observable in government strategic documents that set increasingly shorter intervals and a more ambitious mix for the future. Although the 2019 draft for the 2040 Energy Policy for Poland (PEP2040) assumed that at the end of the decade 56% of energy would be generated from coal and the share of RES would be around 33% in the mix, two years later the government agreed to replace almost half of the current energy generation from coal units with alternative sources by 2030. Another update has already been announced, and we can expect that renewable sources will play a much greater role in the newly designed mix at the expense of gas supplies, which are currently highly uncertain.
It is still less than the boldest analysts would like to see as they advocate a reversal of the existing proportions and a cut in the share of fossil fuels in the energy mix to one third and to generate the remaining energy from RES and energy imports, but the direction of change seems increasingly unequivocal. Apart from the pace of the changes, it is precisely the lack of unanimity in terms of the planning concepts of the subsequent governments that has been one of the greatest obstacles. This is what hindered the energy transformation, making it difficult for regulators to catch up with the reality, including EU policies and the changes taking place in the economy. This was the case, for instance, with the increase of the power output in photovoltaics which reached the level envisaged in the PEP2040 for the end of the decade already last year.
The few exceptions, made up of consistent promises of nuclear plants and offshore wind energy farms, have only confirmed the rule. However, both ventures are still awaiting a reality check, the first for more than half a century. ©℗
Roszkowski: Reflections Regarding the Polish Energy Sector
The war in Ukraine has forced us to reflect - on life, the economy, the future, and the past. The energy sector, with its ups and downs, is no different. Let us consider the net balance of Polish energy policies in the 21st century.
We will kick off with positive factors of the Polish transformation: notably, transformation in the Polish energy sector did not begin in 2018 when works to introduce the European Green Deal commenced. It was launched much earlier, pursuant to the Kyoto Protocol and Poland’s commitment to reduce greenhouse gas emissions.
Yet reducing greenhouse gas emissions was not the only course of action taken by our energy sector. Securing energy and raw material supplies for the Polish economy was of paramount importance. To that end, considerable funds have been invested in infrastructure-related projects over the past 20 years, such as expansion of the oil terminal in Gdańsk to cover oil demand from Polish refinery plants or extending inter-systemic connections (so-called gas interconnectors) between Poland and neighbouring countries. We own and are expanding an LNG gas port in Świnoujście, with another floating LNG plant to be developed in the Gulf of Gdańsk. These connections have afforded us a sense of security, the Russian gas supply shut-off notwithstanding. That is a major success of our raw materials policy.
Another recent success in the energy sector, in all probability the most significant one, involves incredible growth in prosumer photovoltaic installation volumes. The Mój Prąd (My Electricity) project has yielded around a million prosumers across Poland, their number reaching just under 4,000 in 2016. The project has made the energy sector a household business, so to speak. The phenomenon itself is particularly important, having given rise to a fundamental awareness of energy consumption and potential problems associated with photovoltaic installation use. That awareness translates into another success factor: increased auto-consumption. When installing solar panels, individuals are increasingly considering simultaneous investments in heat pumps, energy storage batteries, or home-based electric car chargers. This major success of the transformation now underway will modify Poland’s energy architecture altogether - from one based on central electricity generation locations into almost independent, fragmented energy cluster areas. This will lend the country a genuine sense of energy security.
While not yet implemented in practice, the swift acceleration of the Offshore Wind Farm project is an unquestioned success in the Polish energy sector. OWF will most certainly become the foundation of the Polish energy sector in future. Even pursuant to the current plan, we plan to generate over 10 gigawatts from offshore windmills by the year 2040: giant green power which may deeply affect the Polish energy sector.
Regrettably, we have seen failures as well as successes, the drawn-out process of constructing a nuclear plant in Poland being a flagship example. The idea itself is over 40 years old. Initially halted by the Chernobyl disaster, it was later hindered by the lack of a coherent vision among Polish politicians. At a time when practically all of Poland’s neighbours (Lithuania excepted) have an operational nuclear plant, we are stuck in the planning stage. Concurrently, companies responsible for building the plant have been up and running for more than a decade, burning billions of zlotys we could be using to implement genuine programmes and improve the condition of our energy sector. As a result of this multiannual deficit of coherent energy policies, we continue to generate 70% of our electricity by burning coal in the third decade of the 21st century. Practically nothing has changed since the 1970s. Misguided coal-burning policies notwithstanding, we are obliged to follow absurd regulations restricting onshore wind farm operations. The so-called wind farm distance law has practically frozen the development of new wind farm projects while damaging Poland’s image in the eyes of multiple investors. In an era of increasingly restrictive climate protection prerequisites, we have cut off a branch that could have developed and generated green energy without any particular state aid requirements. How much easier would it be for us to negotiate with the European Union, had we the capacity for a dozen more gigawatts from windmills? Regrettably, these gigawatts are missing. Discussions concerning the liberalisation of the law have continued for over two years, with no end in sight.
The net balance in the Polish energy sector is ambiguous. While some developments have been extremely favourable, others remain a crying shame. The key imperative would be to re-examine the past and the mistakes that have been made to avoid repeating them in future. ©℗
Polish Energy Transformation at the Crossroads
Poland stands a chance of becoming one of the most dynamic laboratories of energy transformation by transitioning from coal to renewable energy sources. The Russian war in Ukraine will speed up the process of moving away from fossil fuels despite the political declaration of a return to coal.
Poland is a country of paradoxes. It is the fifth largest economy in the EU with prospects for further rapid growth and modernisation. At the same time, it is the third largest country in the world with the highest dependence on coal in the energy sector. Not long ago, the share of coal in the production of electricity in Poland was over 80%, more than 75% of systemic heating, and more than 50% with respect to household heating. Many politicians have claimed that coal is a domestic and cheap energy source and will satisfy demand for another 100 years.
The diversification of sources of production and gradual development of the renewable energy sector did not begin in Poland until a few years ago, a significant delay when compared to other countries. Pressure to implement changes in the energy sector is growing. Renewable energy sources are becoming cheaper, and people have started to worry about the future of their children in connection with climate change and very poor air quality, especially in the winter. Domestic coal has also become scarce and is insufficient to meet the energy demand. Imports of this raw material, primarily from Russia, have increased and now amount to 20% of annual consumption. In a short period of time, coal went from being considered ‘black gold’ to being a ball and chain for the Polish economy. The Russian invasion of Ukraine and subsequent sanctions imposed on Russian energy raw materials have temporarily elevated the coal-related enthusiasm of Polish politicians. However, this will not cause an inflow of coal to Poland, nor will the resource begin to generate fewer emissions.
Poland has a hard nut to crack in coming up with a new, safe, and low-emission energy system adjusted to existing market conditions. Moreover, there are inevitable problems related to the condition of the coal-dependent energy infrastructure to tackle. The plants generating energy from coal are old and inefficient, emit enormous amounts of carbon dioxide, and elevate the costs that energy users have to incur. Over the next few years, some of these old energy plants will have to be shut down. The construction of new facilities is the number one issue that the Polish energy sector is currently facing. However, there is a shortage of new developments. Energy efficiency has not been considered as a tool for increasing energy security to date, and this is likely to change.
Renewable resources, despite being zero-emission in nature, and offering local, unlimited energy generation from wind and sun are still treated as inferior to coal. Still, the share of solar energy has grown considerably in Poland in recent years, and Poles have come to love generating energy locally on the roofs of their own homes. However, the wind energy sector has been stagnating in Poland over the past few years due to spatial regulations that significantly curb growth opportunities. One silver lining is the fact that offshore wind energy resources are on the rise, although we will not be able to avail ourselves of this energy output until 5 years from now. Also, Poland has the potential to generate biomethane and green hydrogen, and increase the consumption of biomass, but these are still a matter of the distant future, and the government is not seriously considering these options for the time being. According to the forecasts of a network operator, by 2030 roughly half of all electric energy in Poland will be generated from renewable energy. Today, the share of RES is approximately 17%.
A few years ago, Poland took an interest in liquid gas as an energy source. For many years, this raw material was not considered viable or worthwhile, mainly because it originated primarily in Russia, and the authorities were opposed to increasing its consumption. However, the projects aimed at diversifying gas sources initiated a few years ago are now producing effects. Due to liquid gas supplies from Qatar and the USA, and the pipeline to Norway which should be completed by the end of this year, Poland will be able to do without Russian gas. Given the fact that the country was completely cut off by Gazprom, this was not entirely a matter of choice.
The Polish government has been advocating for the construction of a nuclear energy plant and is considering two technology providers from the USA and France. Work on the project is very slow, though. The manner of financing and the costs of the investment appear to be the most problematic issue, alongside a realistic deadline for the construction of the plant. Whether the investment succeeds depends a great deal on the condition of the technology provider and not the determination of the Polish government or the extent of the energy sector’s problems. Even if a nuclear energy plant is built, it will not solve the most urgent problems the Polish electric energy system is currently facing.
It is obvious that the Polish energy sector is at a crossroads; it needs to modernise quickly in a rapidly changing environment. At present, the fundamental issue is to save energy, but the next step assumes an acceleration of the decarbonisation process. There is no doubt that the war in Ukraine will accelerate the process of abandoning fossil fuels not only for political but primarily for economic reasons. Low- and zero-emission technologies considered expensive to date will become an attractive alternative given the rocketing prices of coal, crude oil, and liquid gas. Poland will be an interesting case to follow because it is bound to become a laboratory for a quick transformation of the energy system and has proven capable of mobilising all its resources during times of crisis.
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