Energy 3 December, 2019 10:00 am   
COMMENTS: Piotr Naimski

Naimski: Energy policy must ensure security to Poland (INTERVIEW)

If it turns out that individual member countries will be able to calculate the costs of energy transformation, it will be a signal for the second round of discussions, not only with the participation of Poland but all member countries – says the government plenipotentiary for strategic energy infrastructure Piotr Naimski in an interview with How do you assess the removal of the Ministry of Energy and the establishment of new ministries: for state assets and climate?

Piotr Naimski: The change of organization in the energy sector at the government level results from several premises, two of which are the most important. First, the experience of the last four years indicates that the supervision of the Treasury over state-owned companies was to be improved. Hence the decision to establish a ministry of state assets and focus supervision in one place in order to maximize synergies among the activities of various companies. It will be a kind of capital group belonging to the state. Energy and coal companies, large companies that are important for the economy, have the potential to focus the strategic supervision over them in one place. The financial resources involved in these companies should bring the greatest profit for Poland. After four years, it turned out that supervision can be implemented better and this is an attempt to improve the situation. May it succeed.

And the second element?

Secondly, energy policy in the coming years will have to be quite strongly reconciled with the European Union’s climate policy. Hence the decision to establish a climate ministry. In the political sense, the creation of such a ministry puts our government in the mainstream of discussions and negotiations on this subject in the EU. Ultimately, Minister of Climate Michał Kurtyka will have two departments: climate, which will be created as part of the amendment to the Act on administrative departments, as well as the energy department. The supervisory function over energy companies has been separated from all energy regulations. It will be the same with responsibility for the country’s energy security, which will be where the energy department is located. This function must be in line with climate policy regulations. These issues are mixed up and overlapping so much that a quick response from the government will be possible thanks to such a ministry. Coordination of this policy with companies must take place at government level.

What role will the other ministers play?

There were no changes in the position of representative for strategic energy infrastructure. It was a good move resulting from the EU principles of ownership unbundling of energy transmission system operators from supervision of energy companies.

Will Mateusz Morawiecki’s second government be the period of implementing infrastructure projects such as Baltic Pipe and Harmony Link?

The second term will allow the completion of projects started four years ago that require more than four years. The Baltic Pipe, initiated with a strategic decision in 2015, will be implemented in the next three years. We have almost all the necessary environmental permits for the construction of this huge pipeline from Norway, through Denmark, and in Poland from Niechorze on the Baltic Sea to Przemyśl. In the next four years, Gaz-System will spend about PLN 14 billion on transmission investments, out of which the Baltic Pipe alone on the sea section will be about PLN 3 billion. This is a huge construction site. Everything is to be ready in 2022. We need to carefully watch the schedules. I don’t see any threats to Baltic Pipe.

How is the progress on Harmony Link?

Construction of a DC submarine cable between Poland and Lithuania is initially set with a deadline of 2025. We are not sure if we will keep it. A lot depends on partners in the Baltic States. Harmony Link is a technical element required to synchronize the power systems of the Baltic States with Europe through Poland. We are preparing for this investment. Talks on synchronization are conducted in parallel. There is a lot to be done and many political and commercial risks on the way to synchronization regarding the energy policy of individual countries involved in this process and concerning the entire European Union. The synchronization conditions will affect the entire energy market in Europe.

Do you want to reduce energy flow?

It concerns the problem of energy imports from third countries into the European Union.

Is it that Poland does not want to import energy from Ukraine or Belarus, so it would not like to import it from Russia through the Baltic States?

We have stated in the Polish energy strategy that we will not become a system importer of energy. We need enough energy sources in Poland to fully cover our needs. We cannot become dependent on foreign energy supplies. We are not freeing ourselves from the gas monopoly so that we can fall into dependence on energy supplies from countries where the price of energy will be dictated administratively.

Is there a chance for a consensus on this matter?

This is an open question.

Will the continuation policy announced by Prime Minister Mateusz Morawiecki be visible in the energy strategy? Will we adapt it to the accelerating climate policy in the European Union?

The next version of the Polish Energy Policy until 2040 was consulted by the Ministry of Energy after preparing an environmental impact assessment. These activities are coordinated with the National Plan for Energy and Climate, which should be ready by the end of the year and presented to the European Commission. The works are going in parallel, and they are superimposed on a new idea discussed in the European Council, i.e. the postulate of climate neutrality until 2050. It will turn out how the possible adoption of this postulate will affect the already binding binding objectives of the European Union and how they will affect the path of energy transformation in the Polish economy. It is still an open question. The December European Council summit will be dedicated to climate neutrality. Much depends on the outcome of these talks. Poland wants different starting points for individual European countries to be included. The zero-carbon transformation will require hundreds of billions PLN for investments. Such decisions cannot be imposed on the Polish state.

The European Investment Bank proposes an ambitious solution, i.e. lending only for renewable investments. There is a discussion about whether to label investments in terms of environmental impact. How will this discussion affect Poland’s plans?

The EIB does not really want to support gas investments from 2021. There is ongoing debate as to whether this approach should be adopted at European level. However, opinions about nuclear energy in Europe are divided. An increasing number of voices indicate that the zero-emission plan and acceleration of the development of renewable energy sources will not succeed without nuclear power. There must be sources working in the base that are stable in the system. If they are to be emission-free, then everything points to the nuclear.

Germany indicates gas in this context.

This is, among others discussion between the German government and the EIB. We’ll see what the result will be. Gas is less emissive than coal, but CO2 still forms during combustion. The conversion of all power plants to gas does not give zero emissions and there should be no illusions about this. Nuclear energy in combination with non-carbon renewable sources can theoretically give such an opportunity. Sweden is a country approaching this goal. It has nuclear power – around 30 percent – and renewable sources, including water. For Poland, security of raw materials, energy and financial security is important in the context of the entire economy. You can’t forget about the financial aspect of security. Our strategy includes a plan to maintain energy production from coal. There is no reason for us to give up because it gives us security. However, if we wanted to accept the postulate of zero emissions, then huge costs for the economy must be taken into account, which will not only upset the security of the energy sector, but also the public finance sector. This is a topic to consider in Brussels.

The social aspect is being raised in France experienced by Yellow Vest protests. Financiers, in turn, suggest moving the coal sector to the social assistance department.

It is an attempt to look for alternative solutions to the problems created by the climate strategy that is beginning to dominate in the European Union. This strategy, which aims at the violent and revolutionary ejection of carbon dioxide from the energy sector, leads to significant social costs. They can be implemented through subsidies, compensation etc. We are at the beginning of a discussion on this subject in the European Union. If it turns out that individual member countries will be able to calculate the costs of energy transformation, it will be a signal for the second round of discussions, not only with the participation of Poland but all member countries. Treaty provisions say that energy policy is a responsibility of a member state. Meanwhile, there are attempts to introduce the same solution for everyone, applying it without looking at the specific needs of individual countries. This diversity must be taken into account. You can not ignore the realities. There were already ideas in the European Union that were promoted with great political impetus at the legislative level, and then you had to forget about them spreading awkward silence around them. We remember the fate of the European defense community or the Lisbon strategy, which is no longer heard during lectures at universities.

Interview by Wojciech Jakóbik