Tag:
power sector

In recent years, over 600,000 households and businesses have invested in their own solar installations, and approximately 35,000 jobs have been created in companies offering services in this segment. This is the biggest, albeit unplanned, success of the Law and Justice government in the energy sector. However, further expansion of micro-installations in Poland is questionable - the government is planning changes in the rules governing this dynamically developing energy sector. This is an operation on a living organism, therefore surgical precision is needed in introducing changes - a transparent process, clear intentions and time that will allow the newly established sector and energy companies to prepare for the transition.

Poland’s energy sector is entering a period of major turbulence. The immediate question is the continued operation of the Turów power station since the EU Court of Justice recently ordered the suspension of lignite mining there. This is just the beginning of the problems. After 2025, when public support ends, the first 8 GW of coal capacity may leave the Polish system, and a little later, another 6 GW. The power plants will be shut down due to age and costs. Observing the government’s actions, one can get the impression that all hope lies in the proposed National Agency for Energy Security . Yet, this is a side discussion because no change in ownership structure will improve the situation of the failing coal power industry. Instead, difficult decisions must be made, and the possibilities of supporting the operation of coal-fired power plants with public money are already very limited.

In the film with Louis de Funès, a separate, unreal world was created for the titular hibernatus to make him feel comfortable in the new reality. With the National Energy Security Agency (NABE) that the government is proposing for coal power, it is similar. The ring-fencing of coal assets is necessary because they are making increasing losses, the power companies are in debt, and with the coal burden in the new reality they are running out of finance to invest. However, without a cost-benefit analysis for the economy and society, or an assessment of the risks, NABE, instead of unlocking the transition, may hibernate it and introduce chaos that will threaten Poland's energy security.

It is non-elastic, inefficient, unsuited to the changing realities of the energy market and the accelerating energy transition. The Polish model of network tariffs, i.e. the system of payments for delivering electricity to consumers, must be changed. In its latest report, Forum Energii, together with the Regulatory Assistance Project, analyses the principles that need to be considered when designing a new approach to tariffs.

The production of electricity from coal in Poland is decreasing. For the first time in the country’s history, in 2020 coal’s share in the generation mix dropped below 70%. Renewable sources have slowly started to play a more important role in the mix, as well as gas. In the midst of the pandemic, domestic production has fallen faster than demand, and this gap is filled by energy imports. Poland remains the most expensive electricity market in the region.