Climate Policy Environment 22 April, 2020 10:00 am   
COMMENTS: Michał Kurtyka

Kurtyka: Poland wants to protect the expansion of renewable energy sources from coronavirus impact (INTERVIEW)

“Poland was one of the first countries to propose an initiative to sustain investments in and supply of renewable energy sources in Europe. We want to take action to maintain the supply chain for the wind and PV sectors impacted by the coronavirus epidemic,” Poland’s Climate Minister Michał Kurtyka said in an interview with You have recently talked to other EU climate and energy ministers. What were these discussions about?

Michał Kurtyka: Our day to day activities are currently dominated by the epidemic, which has necessarily become the subject of the talks. One of the main issues I discussed during my talks with EU climate and energy ministers was the necessity to ensure the continuity of energy supply during and after the pandemic. In Poland the situation is under control – supply systems work continuously, we are not concerned about electricity, gas and fuel shortages. Additionally, the Ministry of Climate is constantly monitoring the grid and making sure it works properly, so that it is able to adjust to the developing situation.

Already at the beginning of the coronavirus outbreak, the supply chain of components necessary for RES development in Europe has experienced disturbances, as the products are mostly manufactured in Asia. This impacted RES investors in Europe and in Poland, who asked for help in tackling this issue. This situation was an important part of the talks with the EU energy and climate ministers. Additionally, earlier I had written a letter addressed to the European Commission, its Vice President F. Timmermans, the European Commissioner for Energy K. Simson and the Croatian presidency, where I talked about coordinating the management of key investments impacted by the epidemic at the EU level. I wrote about this because it is necessary to ensure the liquidity of companies that are about to face issues with the supply of components. So far the situation has not changed. Due to the restrictions on transportation and travel, factories are still unable to ensure the continuity of work. We want the EU to notice this problem and rethink the energy transition from the perspective of our industrial policy. My letter to the EC proposes to launch protective measures and rebuild investments and economic incentives.

The next planned EU summit will take place in June. The 2050 climate neutrality goal will be one of the topics. Is the meeting at risk because of the coronavirus? Will Poland’s position remain the same?

Nobody knows when the coronavirus epidemic will end and how the work of the EU Council will carry on. So far, the Council meetings have been taking place online. The coronavirus crisis has demonstrated the importance of the energy sector and the continuity of electricity supply. At this point the epidemic has not impacted any proposals on energy transition, but because of the coronavirus its shape will be heavily affected by industrial policy and the need to protect the poor. There has been no talk on new interpretations, or changing the conclusions of the December 2019 summit. The general climate target is to be implemented jointly. During the meeting in June we were planning to discuss actions whose goal would be to rebuild the European industry in the spirit of a just transition. Our partners have acknowledged the specificity of Poland’s energy mix, which was reflected in the conclusions of the December 2019 EU summit.

According to the proposed climate legislation released last March, every five years the European Commission will conduct a review and if a member state fails to comply with the green targets the EC will be allowed to issue requirements. However, the document does not say anything about financing the just transition after 2027, when the Just Transition Fund will run out. Will any financial support between that date and 2050 be available?

This is one of the problems we have recognized and we acknowledge that it has not been addressed in the climate legislation. We should bear in mind the impact of the epidemic, its consequences in the form of energy poverty, and instruments that should be implemented. We should also make decisions on financing energy transition in the 2030s and 40s. This is a long-term process that requires a financial vision.

We still don’t know what the new EU budget will look like. Before the negotiations in February in Brussels, the EU Council President Charles Michel had proposed to subject the extent of support to member states to them signing up to the 2050 climate neutrality goal. Will this proposal be accepted?
In the conclusions of the December EU summit, in the third paragraph, there is a statement that Poland’s situation – a different starting point for our energy transition – should be reflected in legal acts. We are talking to the EC about increasing funding, which is necessary if we really want to protect those regions and jobs that will be most affected by the negative impact of the energy transition. The budget needs to take into account investment needs and capital investments. We understand that the economic recovery plan will have to incorporate the construction of new power capacities. We also realize that those will have to be either low- or zero-emission sources. We won’t be able to achieve this without support.

The budget talks have not ended yet. We will go back to them after the epidemic. The Just Transition Fund will receive €7.5 billion, out of which Poland will be awarded €2.5 billion. According to some analysts this is a drop in the ocean. This will be supplemented by the Just Transition Mechanism worth €100 billion, which will mostly offer loans and guarantees. Will this be enough to modernize Poland’s energy sector?

Whatever the support scheme will be – subsidies, low-interest loans or cash we are always talking about easy access to capital. The pilot program managed by the National Fund for Environmental Protection and Water Management is an example here. The program’s name is “Sunny roofs” and its goal is to grant loans for purchasing PV panels for multi-dwelling buildings. The investment is repaid after 6-7 years and starts to pay off. For green investments to pay off, the loans need to be on preferential terms. Cheap loans should not be perceived negatively. On the contrary. For Poland this is also a huge challenge when it comes to planning the budget. We have PLN 100 billion available for investing in five regions. We need good plans to use this money.

In a recent interview with Reuters you said that Poland’s energy sector may choose to follow the German green energy reorganization path, where we will separate the less profitable coal assets from networks and renewable assets. Can the state treasury, as co-owner of energy companies, include such changes in the companies’ strategies? Should we expect such changes to take place, if yes when?

Poland’s energy sector has been transforming for many years. Our current PV installed capacity is 1700 MW. This is a 181% increase year to year. In 2019 Poland was the third biggest investor when it comes to wind capacity. This means new zero-emissions sources are emerging. However, legacy fossil fuel plants will continue to operate. Otherwise, our energy system will lack adjustable energy sources. Having said that, coal fired power plants will have to gradually make more room for renewables. The idea to generate spare capacities is, in my opinion, worth considering and implementing, with the provision that the specificity of Poland’s energy sector will be taken into consideration.

Considering the possible updates of the state budget caused by the coronavirus, is it possible they will impact the “Clean air” and “My electricity” programs?

Last March we introduced changes to both programs to make them simpler. These schemes are important for Poland and its citizens. They are being implemented and the money is being paid out. We are not planning any other changes apart from what we had already announced and introduced last March.

Interview by Bartłomiej Sawicki