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Climate Policy Energy Environment Winter Package 28 June, 2017 9:00 am   
Editorial staff

Winter package will determine the future of Polish economy

On 11 May, the lower chamber of the Polish Parliament – the Sejm, adopted a resolution, which said the proposals made by the European Parliament and the Council on the internal energy market go against the subsidiarity principle. The ongoing discussion on the so-called winter package will have a decisive impact on the Polish economy.

Winter package

The winter package is a collection of propositions for new EC regulations on the energy market, which was presented at the end of last November. Brussels proposed, among others, changes to the internal EU energy market to adapt it to the potential of the matured sector of renewable energy sources. Poland stated its objections against the emissions limit for coal power plants on the capacity market. The capacity market is a kind of state aid where entities that generate energy receive money, not only for the energy they produced, but also for the power they are ready to deliver.

If the emissions limit proposed by the EC at the level of 550g of CO2 per kWh entered into force, it would make it impossible to finance the construction of new, coal-based power plants in Poland from the instrument of the capacity market. The government hopes that the European Commission will let Poland create the capacity market in accordance with the old rules, which would mean we would be allowed to make an exception from adhering to the limit. This is important because the EC’s proposal states that the existing installations would be obliged to adhere to the new limits five years after the regulation enters into force.

The Sejm’s objection

The draft resolution was submitted to the Sejm on 21 April, its first reading was conducted at the Sejm’s Commission for the European Union. It was submitted for voting on 10 May and adopted on 11 May. The Commission’s chairman, MP Izabela Kloc was the rapporteur.

410 MPs voted for the resolution, 2 were against and one abstained. The principle of subsidiarity says that every level of government handles only those actions, which cannot be completed more efficiently by a lower level.
According to Teresa Wójcik, biznesalert.pl’s editor, after a heated dispute during the first reading at the Sejm’s Commission for the European Union, the MPs, regardless of their political affiliation, decided that the draft resolution adopted by the European Parliament infringed on the subsidiarity principle. This is because “the proposed resolution does not ensure that the stated objectives of will be better achieved at the EU level than at the national level.”

“If we printed all documents regarding the winter package, we would have 3500 pages,” said Tomasz Dąbrowski, Head of the Energy Department at the Ministry of Energy during the European Economic Congress in Katowice. “Member States will be obliged to prepare national plans for energy and climate, which will include all of those elements, which are currently included in a country’s energy policy. The government’s objection pertains to the fact that states are forced to make declarations about emissions and energy mix in a way, which constitutes a certain kind of obligation,” he assessed.

“We triggered the yellow card procedure against the resolution on the energy market, i.e. the so-called winter package adopted by the European Parliament and the European Council (…) We started talks with other Member States. The results are positive, but we will see to what degree the declarations will translate into decisions,” said Grzegorz Tobiszowski, Energy Vice-Minister during his speech at the 9th European Economic Congress in Katowice.
In Tobiszowski’s opinion, the winter package had a number of propositions, which could be adopted. However, Poland absolutely cannot accept the proposed CO2 emissions limit at 550g/mWh, because it would cause an actual shutdown of the coal-fired generation sector. This would happen even if we applied the latest, most advanced and efficient technologies of coal gasification, or the so-called clean coal technologies. Tobiszowski also stated that over 10 EU states had a similar position to Poland’s on the so-called winter package.

You can’t run the power sector with decrees

“Should we coordinate tasks that ensure the security of cooperating power systems? The answer is yes, we should. We are not islands, we work in a synchronous way, so we have to coordinate the allocation of transmission capacities and the operation of phase shifters,” said Eryk Kłosowski, CEO of the PGE Group.

“The question is whether we should give all competences to one coordinating center? Definitely not. Our power management center defines the needs of our country the best. The instruments that will be at the disposal of regional coordination centers will only cause more losses. A situation where the operator is deprived of the possibility to use exceptional means is unacceptable,” warned Kłossowski.

“Kirchhoff’s laws continue to determine electricity flows. You cannot force electricity to flow where you want by issuing decrees. I think that the winter package does not take into consideration the physical limits that stem from how synchronous systems work,” he said during the European Economic Congress in Katowice.
Janusz Olszowski, President of the Polish Mining Chamber of Industry and Commerce, said that the European Commission was adamant at eliminating coal, but it did not ask about the cost of this decision.

No coal means no Poland

“If Poland took professional actions, which could be called <assertive cooperation>, the European energy policy could have a positive impact on the Polish economy,” argues professor Władysław Mielczarski. “However, this will happen if the cooperation with the EU and its Member States is active and, more importantly, assertive.”
“The Commission’s approach is that every state can determine their own energy mix, but without coal,” he said. In his opinion, we should build coalitions and there are 12 states, which may support our anti-decarbonization position.
Krzysztof Jackowski from the bureau of the Government Plenipotentiary for Strategic Energy Infrastructure stated during the Polish Energy Summit in Gdańsk that “the government’s strategy is clear. The government wants to ensure energy security through coal. The discussion is ongoing. The government is looking for allies. The document we are talking about has over 1000 pages and it is not easy to work with. The government hopes that the 550 g threshold will disappear, as we cannot accept it.”

Already in March, Piotr Naimski, the Government Plenipotentiary for Strategic Energy Infrastructure, said that the proposal to create Regional Operational Centers was one of the biggest threats, from the point of view of the functioning of a domestic power system, that were included in the winter package.

In his opinion, if they were created, a “strategic shift” would take place, which would touch upon not only energy issues, but also politics. “Depriving a Member State government of its control over the national energy system creates a situation where nobody really knows how the government should fulfill its responsibility for energy supply security,” Naimski said.

“The target that by 2050 Europe’s energy industry will be carbon free cannot be achieved in Poland at all,” said Krzysztof Tchórzewski, Polish Energy Minister at the European Economic Congress. “With great effort and a cost at PLN 200 billion we may be able to reduce carbon participation in energy production to 50%,” he added.
The minister explained that trees, e.g. poplars, needed carbon dioxide to breathe and that the gas was produced by natural sources, e.g. volcanoes. The minister encouraged Maroš Šefčovič to consider this to gain some perspective when assessing global emissions.

“It was Soviet Russia who made decisions about Polish energy. It’s Moscow’s fault that we were developing the coal energy industry while nuclear energy sprouted elsewhere. We did not make decisions about the industry, it was Soviet Russia and the West is to blame for that,” accused the minister in Katowice.

“The 550 gr/CO2 kWH requirement included in the winter package will be applicable to Poland only,” he reminded. He also reiterated that coal could not be removed from Europe’s energy mix.