What goes on in Poland on the 24th of August.
Electricity bills may increase by a staggering 20%
GDP slowdown, loss of energy independence, surge in gas import and electricity bills up by 20% – these are the potential results of introducing in Poland only one of the European Commission’s proposals included in the winter package. Poland has a few weeks left to arm itself with arguments for further negotiations.
After the summer break, the European Parliament will go back to working on the regulation on the internal electricity market. In July 2016, the EC proposed as part of the so-called winter package to forbid Member States to financially support power plants that emit over 550 g CO2/kWh. In practice this kills financial support for coal investments.
Currently Poland is introducing the capacity market, which is a new allowance for energy producers. When will the new regulations enter into force? Nobody knows, perhaps once they are notified to the EC. The goal of the capacity market is to fill in the financial gap which hampers investments in new generation capacities and thus increase the security of power supply.
Introducing the capacity market in Poland is controversial. Is this really the best model and will an additional cash injection for the sector actually bring in new investments? If the 550 g limit enters into force we will have to stop financial support for coal-fired power plants. The costs for the consumers and the entire economy may turn out to be a lot higher.
Government discord on OFE shutdown? Labor Ministry’s counting costs
The Ministry of Family and Labor is working on assessing the impact and detailing the final shape of the changes to the retirement system. Elżbieta Rafalska the Labor Minister wants to cooperate with the Ministry of Economic Development on shutting down open pension funds (OFE), but in an interview with TV Republika, she said that she was not sure whether the amendments submitted by her ministry had been included in minister Morawiecki’s project.
On Tuesday the Gazeta Prawna dalily reported that the Ministries of Labor and Development reached an agreement on the changes to the retirement system. According to the daily, Mr Morawiecki convinced Mrs Rafalska to his ideas. This means about 25% of the funds sitting in OFE will be taken over by the state Demographic Reserve Fund and the rest will go to institutions that will replace OFE. The money of future retirees will become their private savings, which means they will be able to decide how to invest them.
On Wednesday Rafalska commented on the daily’s report in TV Republika and stressed that it was not about Morawiecki convincing her to his ideas, but about a compromise and cooperation between the ministries.
„We made our expectations and conditions clear, but so far we have not received the final draft to comment on. I have already said that the cooperation was more intensive when we were working on the project and now we are looking for a good solution, but the works on assessing the impact of the regulation and making it more detailed are still ongoing,” she pointed out.
She also added that the project has not been consulted yet and she has not seen it, which is why she did not know whether all of her ministry’s conditions had been fulfilled.
Grupa Azoty will build a new research center in Tarnów
„This is a huge chance for Lesser Poland and Poland’s economy at large,” Deputy Prime Minister Jarosław Gowin said at the ceremony of laying of the foundation stone for a new research and development center, Grupa Azory will build in Tarnów. The investment was inaugurated on Wednesday.
Grupa Azoty is hoping the center will allow it to improve competitiveness. „Poland’s chemical industry has a big potential and the company’s engagement in developing this kind of facility testifies to the innovativeness of the business and region. This is also an opportunity for Polish science and a chance to tighten the relationship between industry, science and higher education,” Gowin said. He also added the investment is to be ready in 2020.
Jadwiga Emilewicz, Undersecretary at the Ministry of Economic Development, stressed the project received PLN 20 million as part of the Intelligent Development program. „We are treating this as an investment in the innovativeness of Polish companies and consequently improved competitiveness of Poland’s economy in general,” she said.
The new center will conduct research in areas such as new materials, modern fertilizer products and technologies, as well environmentally friendly products. „According to the assumptions of our updated development strategy the expenses on research, development and innovation will reach 1% of our profits by 2020,” Wojciech Wardacki, PhD and Grupa Azoty CEO said. „We want to put in order our research across all of our companies. We want to specialize, we have centers in Kędzierzyn and Puławy as well. We want to coordinate this. We do not want to compete against each other,” he added during the ceremony.
The company is hoping that the investment will allow it to expand its cooperation with start-ups, research organizations and NGOs.