Polish power plants are gaining time until the next decade for reforms. It cannot be wasted – writes Wojciech Jakóbik, editor-in-chief of BiznesAlert.pl.
An arrangement for the capacity market
Negotiations of the winter package have come to the next stage. The ministers responsible for energy in the European Union have adopted a general approach that will allow to work with the European Parliament on the package in the new year, officially, the “Clean Energy for all Europeans”.
As the Polish Press Agency rightly points out, one of the key issues from the Polish perspective was the provision about the introduction of a CO2 emission limit for energy producers supported from public funds under the so-called capacity market. The EC explained that it wanted to prevent hidden subsidizing of coal-fired power plants in this way.
The problem was that the Commission proposed that all power plants that would benefit from support under the capacity market had to meet stringent environmental standards. The EC proposed a CO2 emission limit per kilowatt hour (kWh) of 550 g CO2, which would exclude coal power plants at the current level of technology development. That is what Poland was afraid of.
According to PAP [pl. Polish Press Agency], the concluded agreement assumes that this limit will apply, but to existing power plants only from 2031. Poland, as a representative of the Estonian Presidency told PAP at night, supported these provisions.
Time for reforms
This means that the support mechanism adopted by the Poles under the Act on the capacity market will apply to coal until 2031. Politico informs that the European Commission will notify the law on the capacity market by the end of 2017. Therefore, we have a compromise that is beneficial for the Polish coal sector.
However, one should not let grass grow under its feet. The negotiated postponement of the judgment for coal should be an impulse for intensive reform of the sector so that it would be prepared for transformation. The European Commission intends to offer support for the transformation of post-mining regions. As part of the EU emissions trading system operates the Modernization Fund, whose funds after Poland’s skillful negotiations can be used to modernize coal-fired power plants. It is also worth remembering that regulations with the highest technological standards (BAT and BREF) will force investments in this area, which the Polish Energy Group alone estimates at PLN 4 billion.
Vigilance should not be dulled by the fact that mining has better results. This is the effect of the price peak in the coal market, which may soon end with a drop in demand and an increase in the supply of raw materials on global markets.