Unsurprisingly the Russian invasion on Ukraine sparked a discussion about the need to revise the energy strategy, but it also caused another dispute in the ruling coalition on bringing back an energy ministry, writes Wojciech Jakóbik, editor-in-chief at BiznesAlert.pl.
Revision of the energy strategy
Poland has announced a revision of its energy strategy, i.e. Poland’s Energy Policy until 2040. This first came to light when it was decided that some of the coal-fired plants that were supposed to be decomissioned will actually see their lifespan extended. The Russian aggression on Ukraine means that Poles cannot shut down any working power plant, especially in view of the calculations made by the Energy Regulatory Office about the scarcity of such facilities in Poland, or the electricity supply gap that is to reach 4.6 GW. The 200+ program involves the maintenance of coal fired plants. This week the Prime Minister is expected to present a plan for an accelerated phase-out of Russian hydrocarbons in Poland. Russian coal is not important for the Polish energy sector, but for regional and household heating. Poland had already decided to terminate the Yamal contract with Gazprom and not buy more gas from Russia as of the end of 2022. The country also dropped its oil import to about 50 percent, and the CEO of Orlen had not so far decided whether he would extend the contract with Rosneft, which is to expire at the end of the year. “We have not yet entered into negotiations,” admitted the president of PKN Orlen Daniel Obajtek on the occasion of receiving another cargo of oil from outside Russia in the Naftoport, which was attended by BiznesAlert.pl. The Prime Minister’s revolutionary plan may therefore be more about oil than gas, because in the gas sector the plan has been known at least since PGNiG’s refusal to renegotiate the Yamal agreement in the last negotiating window in 2019.
However, the plan may also change Poland’s approach to gas itself. The new gas-fired power plants have won contracts on the capacity market for about 4 GW, and have become the focus of a political dispute between the factions of the United Right: the camp of the Prime Minister, supporters of Zbigniew Ziobro (the Justice Minister – ed.) and other participants of this debate. The current energy strategy assumed that it was possible to develop gas energy to a degree that would guarantee the possibility of making deliveries entirely from outside Russia. For this reason, even before the Russian attack on Ukraine, the Poles had planned a second LNG terminal, a “floating” one, in the Bay of Gdansk. Thanks to it, the LNG terminal in Świnoujście, the Baltic pipeline and cross-border connections, these 4 GW of gas plants would have access to fuel from outside Russia.
I would like to present a plan “5×0 – independence from Russian fuels”, and I invite BiznesAlert.pl readers to take part in a discussion about this proposition:
- ZERO shutdowns of operating power plants
- ZERO additional gas-fired power plants
- ZERO delays in NPPs construction
- ZERO unjustified barriers to RES
- ZERO waste of energy.
A gas or a coal trap?
The energy crisis that is raising gas prices to a level that undermines the profitability of new gas projects (see the problems of investments like Ostrołęka C) and the idea to return to coal raised by some in the ruling camp, have led to a new discussion about energy strategy. The faction led by Zbigniew Ziobro is calling for the abandonment of new gas and instead proposes supporting coal-fired power generation with new technologies, which is to result in eventually them being replaced with nuclear and renewable power. This will help to avoid the gas trap, but the proposal also poses the risk of stepping into a coal trap, which will slow down the energy transition, which has an objective character that has not changed despite the Russian aggression by the Dnieper.
The strongest manifestation of this debate is the return of the idea of the ministry of energy. Former minister responsible for energy, Krzysztof Tchórzewski, chaired the proceedings of the Permanent Subcommittee on Energy Industry Restructuring on 23 March, during which he criticized the shortcomings of the system whose participants are the Ministry of State Assets and the Ministry of Climate and Environment. He warned that the unclear division of competences threatens the Polish nuclear energy program and energy strategy.
The number of politicians in the ruling coalition who support the rebirth of the energy ministry is growing. It is no secret that the circle of the Minister of State Assets, Jacek Sasin, would see in this role, for example, the former president of PGNiG Paweł Majewski, who resigned on March 25. However, Zbigniew Ziobro’s team also has a permanent candidate – Janusz Kowalski, who is in favour of returning to coal. Yet, some suggest a completely different solution, namely the transfer of a superministry of energy to Piotr Naimski, the Government Plenipotentiary for Strategic Energy Infrastructure. His position is growing due to the Russian invasion, which has been confirmed by the fact that he participated in the talks between Poland the US during Joe Biden’s recent visit to Warsaw.
It’s time for a reform, not splitting the spoils
A system-wide solution in the form of the ministry of energy, which would concentrate all competencies in the energy sector, would be more effective under two conditions. This department should, in fact, concentrate competencies in the energy sector, but not be at odds with EU rules providing for the separation of supervision over regulations from supervision over the companies that are to implement them. An energy ministry cannot become a lobbyist for the interests of the sector, it needs to regulate it. Just as the Ministry of Climate and Environment was not the result of an energy management reform, but the result of a new distribution of spoils between the factions of the ruling camp, so the return to the ministry of energy would be the consequence of such arrangements. This would be especially true if the department was created only to transfer part of the environmental competences to one of the factions and if all the necessary powers were not concentrated in the new department. The reform should be about streamlining the work of the administration, not redistributing the spoils. The decision will be made in the coming days.