There is a draft policy from the Ministry, an idea what should be done, but the energy strategy and national energy and climate plan do not really match together. In the end, my impression is that the Polish utilities know pretty well what is going to happen – writes Filip Piasecki from Aurora Energy Research.
– There is agenda from the state but those companies cannot escape the forces of the market, and European regulations will also push them to evolve. In our Central scenario, which is updated twice per year and used by utilities, banks and investors, we analyze in our view most probable development of the Polish power sector until 2040, depending on different factors. There is no nuclear energy in it. Current coal capacities will decrease much sooner than it is assumed in energy strategy. The first will need to leave in the early 2020s because of BREF requirements. At the end of twenties most 200 MW blocks will close. They are less competitive than gas power generation, and in addition would need to be modernized, which is not profitable without capacity payments due to the 550 gCO2/kWh rule. It would not be profitable to keep them online – writes Piasecki.
– Instead of that we expect to see a big increase in gas generation with projected gas consumption at 12 bcma in 2040 from the power sector. Renewables also rise significantly: offshore wind, solar, but also onshore, if the 10H rule is abolished. By the way, the best way to decrease gas consumption in the power sector is to build renewables to make gas power plants run less. We expect 20% of demand to be met by coal in 2040, 27% by CCGT and OCGT, 53 percent by renewables. The capacity market would ensures peak demand can always be met, mostly by new gas generation – believes the expert.
The best way for companies to survive is to fast decrease highly carbon intensive generation, which is veryvulnerable to CO2 prices. Some of Polish companies have already started to create a green sub-companies focused on less-emission generation. There is still a problem what to do with coal generation. This could be addressed by the government. The political will can make different things happen – conclued Filip Piasecki.