In Brussels Poles discussed the capacity market. The Polish Electricity Association (PKEE) argues that there was no point in mixing the tools of energy and climate policy while implementing the market. This is how the Association defends the coal sector from the constraints imposed on the capacity market due to climate policy.
On Monday 19 September in Tallinn a high-level conference on the energy sector titled Europe’s Future Electricity Market took place. The Polish participants of the event claimed that climate policy was implemented through the emissions trading system and BAT regulations. Whereas the goal of the capacity market was to maximize support to ensure its stability.
PKEE pointed to the fact that without the capacity market unprofitable power plants would be shut down, which would cause a drop in the availability of electricity generation capacity well below the security of supply criteria. This is why Poland is against the winter package’s regulation that limits the support offered through the capacity market for facilities whose CO2 emissions exceed 550 g CO2/kWh. “We should not mix the tools of climate and energy policies. The 550 g regulation is wrong,” Jarosław Broda, speaker at the conference and Vice-President of the Tauron Group, said.
Poland is at risk of gas dependence
This is why PKEE urges to use the technologically neutral capacity market, which will improve the profitability of this solution. The Association argues that replacing the drop in electricity supply from coal-fired power plants with new gas-fired plants will lead to delays, also when it comes to transmission infrastructure. It will also increase Poland’s dependence on gas by 70% by 2040. The costs for consumers will also increase – by EUR 240 m between 2017 and 2040.
Meanwhile the implementation of the capacity market without the 550 g regulation will ensure additional investments in the demand-side response and high efficiency coal-fired power plants. After 2030, even when the mechanism will be introduced, gas-fired CCGT power plants will become more competitive on the capacity market auctions once the CO2 emissions costs go up. “There is no time to delay the capacity market. We need to establish it on the basis of trust and take into consideration the different state of affairs in the EU Member States,” Broda said. He also reminded that Germany spends billions of Euros on Energiewende and despite that its CO2 emissions have increased in the last two years.