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Energy 2 October, 2018 10:00 am   

Poland is fighting for a transition period for the energy sector

The event “Polish Energy on the 100th Anniversary of Independence” is a good opportunity to think on how independent Poland’s energy policy can be – says Wojciech Jakóbik, editor-in-chief of BiznesAlert.pl.

The independence of energy

The gala dedicated to the century of Polish independence from the point of view of the energy sector was organized by the Polish Electricity Association in the main building of the Warsaw University of Technology. It gathered representatives of energy companies under the control of the Minister of Energy. The minister himself talked about the long-standing tradition of Polish power industry, thanks to which Poles are not short of electricity, and thanks to constant modernization, it will not be missing in the future.

According to minister Krzysztof Tchórzewski, the industry will not grow without efficient energy. It is a response to the accusations of his heated critic Wojciech Myślecki, who accused the power industry that the high costs of energy burden the industry. This means that in the current realities the energy sector will be more expensive or it won’t be any at all. In this context, industry response has already emerged. Steelworks declared that they are looking for opportunities to import cheaper electricity from abroad. The Ministry replied that PSE have limited possibility of supporting them in this undertaking.

However, how can Poland’s energy policy be independent? A good opportunity to digress on this subject was the ceremony at the Polytechnic, as well as a discussion with the participation of energy minister Krzysztof Tchórzewski at the Nafta-Gaz-Chemia conference in 2018, which I had the pleasure to chair.

During the panel I was conducting, Minister Tchórzewski explained his vision of energy in depth. In his opinion, the burden of energy transformation can not fall on households in Poland. This is where his policy of blocking the calls of electric power companies to the Energy Regulatory Office for raising farm tariffs comes from. According to the minister, Polish citizens can not afford to pay for energy transformation, unlike the wealthy Germans. An alternative is the burden on the industry, as well as the weakening of energy companies which, due to the lack of compensation for rising costs through higher tariffs, will hinder investment expenses. This policy can be explained by preparations for local elections or a vision of energy in the French form. President of the URE Maciej Bando appealed for a clear declaration in this matter in the panel.

Who will the costs of energy transformation fall on?

It turns out that more and more will depend not on Warsaw, but on the decisions of Brussels. The minister admitted that the support for energy necessary to maintain a stable reserve based mainly on coal will depend on negotiations with the European Commission, which approves all public aid. Tchórzewski explained that the success of the talks is to guarantee stable supplies in the “transition period”, when the Polish energy industry will undergo a transformation, but an evolutionary path that will require maintaining a black reserve. It is not known how much time the European Commission will give to Poland. It is not known whether it will agree to limitations of electricity imports from abroad, which from the point of view of PSE are crucial for maintaining system stability, but for the market are a limitation, and a burden for the industry looking for cheap supplies.

Time for energy

Krzysztof Tchórzewski once again talked about an important element of negotiations with the European Commission. Poland is striving to ensure that support in the power market that guarantees the survival of coal capacity during the transitional period is not limited by a rigid limit of 550g CO2/kWh. This would mean that coal would be excluded from support. According to Tchórzewski, Germany is in favor of this solution, including the reserve for renewable power in the form of lignite energy. There is therefore a significant chance that the limit will be introduced by the so-called regulation. winter package, but it will be averaged for the entire production park. Then, coal units from Poland can squeeze through the bottleneck of the compromise regulation 550g. Words of the president of PGE Energia Ciepła Wojciech Dąbrowski sum up the efforts of the Minister of Energy. He admitted during the Congress of the New Industry Expo in Katowice that energy transformation is inevitable. This is the opinion that most experts will agree with, but it has not been popular in the power sector so far. – We want to adapt to it, but we need more time. Partners in the EU want to end decarbonisation in 2050. It can be deadly for our economy. We need more time and understanding – said Dąbrowski.

Energy must keep up with reality

However, it is not known whether the compromise with the European Commission will be maintained for the entire transition period for which Poland is counting. It may be undermined in the future in the course of the next negotiations on the winter package. The Commission has the ambition to further tighten the climate policy. This in turn will mean a steady increase in burdens from the emissions trading scheme and an increase in energy prices from coal. The changes will intensify the phenomenon of new consumer behavior, which, like the smelters will not look at the country of origin, but on the price, or for image or ideological reasons, will choose energy with a certificate of origin from green sources. Will changes in the Polish energy keep up with reality?



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