Coal Energy 7 August, 2023 8:00 am   
COMMENTS: Joanna Słowińska

Pawlak: If state coal agency NABE is off the table, what is the solution?

2017-10-18 – blok 910 z retencyjnych 1 – mały Photo from the construction site of the 910 MW coal block in Jaworzno. Picture by Nowe Jaworzno Tauron Group

The restructuring of the Polish power generation market, consisting in the allocation of coal assets of energy companies to NABE, is aimed at accelerating the energy transition. Although the creation of a large coal company may be a source of natural resistance, without this project the Polish energy sector will not the able to effectively and rapidly reduce emissions, says Karol Pawlak, PhD., from the Warsaw University of Technology.

The National Energy Security Agency (NABE), once established, will face a number of challenges. They are mainly related to the cost of generating energy from coal – let’s remember that it includes not only the price of the raw material, but also the EU ETS – and partly obsolete generation units that will drop out of the capacity market in 2025. We should also not forget about the debt for which the State Treasury has provided guarantees. All these factors will affect the energy prices offered by NABE.

However, this cannot be taken as an argument against establishing the Agency. On the contrary. All these calls would be equally, or even more, prescient if the reforms of the sector were abandoned and the coal plants remained where they are – that is, in the energy companies. In the same way, and even more so in the long run, it would increase prices.

The creation of NABE will set a new axis of competition in the Polish energy generation market – not only between individual entities, but also between conventional generation technologies in NABE and zero and low – carbon generation assets in energy companies and private entities. Such determination of the axis of competition will only accelerate the expansion of capacity in RES and investment in energy storage. So if, according to the original idea, NABE will not expand its capabilities – the winner of this competitive competition is determined in advance.

This, as well as NABE making it easier for energy companies to obtain financing for investments related to the energy transition, is the main argument for restructuring the sector and establishing NABE. We need to accelerate the energy transition, to produce as much energy as possible from cheap and clean sources. This is a civilizational necessity to preserve the competitiveness and security of the Polish economy.

What if NABE is not established? Nothing will change. Coal-fired power plants will remain part of the state-owned power producers, generation costs will rise, and investments in zero and low-carbon sources will continue at their own pace in an attempt to keep up with the economy’s growing demand for electricity.