Lewiatan: Polish presidency an opportunity for Europe’s energy independence

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The Council of the European Union and its Parliament have reached a political agreement on the electricity market reform, which includes a transitional period until 2028, during which Poland will be able to support its coal-fired power plants. EU flags. Picture by pixabay.com The derogation in the agreement on the reform of the European Union electricity market design extends the permission for Poland (as well as Germany and other EU members) to apply the capacity market as a support mechanism until the end of 2028. This is the result of the actions of Polish members of the European Parliament, including Jerzy Buzek. "The compromise reached between the European Parliament and the Council is important for two reasons," says Ryszard Pawlik, Jerzy Buzek's advisor. "The first is the possibility of maintaining the capacity market support for coal-fired power plants until the end of 2028. This is good news for Poland's energy security and reliability of power supply. This is particularly important in the context of the energy crisis, which, after all, we – as the European Union – are unfortunately still experiencing. That is also why we in the EP have been pushing hard for months for the possibility of extending this derogation," he said. "The second reason is crucial, as the condition for extending this derogation is to present a clear plan of how and what we intend to replace the current coal units in the capacity market with once the derogation has expired, i.e. in 2029 at the latest. The idea is to use these extra few years to really engage in a thorough and actual energy transition, which will include a surge increase in RES availability together with the expansion of the grid and storage capacity. This is a great challenge, of which the new government is certainly deeply aware," professor Buzek's advisor told BiznesAlert.pl. The reform introduces contracts for difference as the main tool to support new energy projects. The Council of the European Union will also be able to declare an energy crisis in the event of a sudden increase in wholesale energy prices. The agreement is provisional and has yet to be approved by these EU bodies. Council of the European Union / Wojciech Jakóbik
The Council of the European Union and its Parliament have reached a political agreement on the electricity market reform, which includes a transitional period until 2028, during which Poland will be able to support its coal-fired power plants. EU flags. Picture by pixabay.com The derogation in the agreement on the reform of the European Union electricity market design extends the permission for Poland (as well as Germany and other EU members) to apply the capacity market as a support mechanism until the end of 2028. This is the result of the actions of Polish members of the European Parliament, including Jerzy Buzek. "The compromise reached between the European Parliament and the Council is important for two reasons," says Ryszard Pawlik, Jerzy Buzek's advisor. "The first is the possibility of maintaining the capacity market support for coal-fired power plants until the end of 2028. This is good news for Poland's energy security and reliability of power supply. This is particularly important in the context of the energy crisis, which, after all, we – as the European Union – are unfortunately still experiencing. That is also why we in the EP have been pushing hard for months for the possibility of extending this derogation," he said. "The second reason is crucial, as the condition for extending this derogation is to present a clear plan of how and what we intend to replace the current coal units in the capacity market with once the derogation has expired, i.e. in 2029 at the latest. The idea is to use these extra few years to really engage in a thorough and actual energy transition, which will include a surge increase in RES availability together with the expansion of the grid and storage capacity. This is a great challenge, of which the new government is certainly deeply aware," professor Buzek's advisor told BiznesAlert.pl. The reform introduces contracts for difference as the main tool to support new energy projects. The Council of the European Union will also be able to declare an energy crisis in the event of a sudden increase in wholesale energy prices. The agreement is provisional and has yet to be approved by these EU bodies. Council of the European Union / Wojciech Jakóbik

Confederation Lewiatan proposes the creation of an” EU Energy Strategy ” and the launch of a pan-European industrial transformation program, similar to the NRP, with similar funding mechanisms. According to the organization, this will make the Old Continent one of the world’s cheapest electricity suppliers.

  • The European Green deal poses a huge challenge for all industries and companies, especially small and medium-sized enterprises.
  • The organization draws attention to the need to strive for energy independence and competitiveness in the energy sector in the EU, while ensuring an appropriate investment climate and protecting the internal market.
  • It also calls for the promotion of long-term solutions for the cost-effective decarbonisation of EU economies, based primarily on renewable energy sources, gaseous renewable fuels (e.g. green hydrogen, biogas and biomethane), as well as initiatives supporting market – based mechanisms for purchasing renewable energy for industry.

The Confederation reminds that on January 1, 2025, Poland will assume the presidency of the Council of the European Union for six months. The organization has prepared proposals for the Polish presidency and for the new European Parliament and the European Commission.

„The European Green deal poses a huge challenge for all industries and companies, especially small and medium-sized enterprises, which need support to implement change. The Polish presidency should therefore focus on creating a favourable environment for achieving the ambitious goals of the green transition, bearing in mind the competitiveness of industry and ensuring the highest level of energy security. Financial support for entrepreneurs is also extremely important,”says Jakub Safjański, Director of the Department of Energy and Climate Change at Lewiatan.

The organization draws attention to the need to strive for energy independence and competitiveness in the energy sector in the EU, while ensuring an appropriate investment climate and protecting the internal market. It also proposes to develop an „EU energy strategy” to make Europe one of the cheapest markets for electricity suppliers: to increase the supply of renewable energy and low-carbon hydrogen at competitive costs.

Lewiatan also calls for the promotion of long-term solutions for the cost-effective decarbonisation of EU economies, based primarily on renewable energy sources, gaseous renewable fuels (e.g. green hydrogen, biogas and biomethane), as well as initiatives supporting market-based mechanisms for purchasing renewable energy for industry, e.g. through PPAs.

Businesses stress the need to support the regulatory environment for the development and restructuring of distribution and transmission networks, particularly in the area of investment financing and modernisation. They should not result in transferring the entire impact of this development onto consumers, nor should they negatively affect the availability of the grid for renewable energy sources (RES).

According to the organization, it is important to develop national industrial transformation strategies, which will identify opportunities to introduce new, innovative solutions that affect the reduction of CO2 emissions from industry, such as building materials. On this basis, a budget could be adopted to implement support for industry, and the EU and member states could define legal and organisational instruments to ensure the implementation of industrial policy. It is also important to provide support to entrepreneurs in the implementation of the Green Deal, e.g. financial (EU funds, access to information on funding sources), and expert advice (training, expert database, consulting firms).

Lewiatan stresses that the EU should take an ambitious approach to the regulations on the Extended Producer Responsibility (EPR), which are currently very fragmented. „Manufacturers must register, report and pay fees in each country where they place even small quantities of products sold (e.g. for online sales from another country). Lewiatan therefore calls for the harmonisation of these rules, in particular with regard to the one-stop-shop for the EPR register (as is the case with VAT legislation), which would allow SMEs to fulfil their registration obligations in one place for the entire EU. It also calls for exemptions for micro – enterprises, such as those adopted in the packaging and packaging waste regulation,” the organization wrote.