Energy Renewables 27 June, 2019 10:00 am   
COMMENTS: Mateusz Gibała

Śniegocki: Industry can choose RES. A signal from the authorities is needed (INTERVIEW)

Without a permanent, predictable policy for the development of renewable energy, the share of Polish producers in the RES market will be relatively small. A coherent vision of the RES market development presented by the government is needed to encourage Polish companies to be more actively involved in the supply chains of low-emission technologies. Without a clear plan, we are threatened by unpredictable, one-off calls, like this year’s auctions. In this situation, the share of Polish suppliers will remain smaller than our real potential – said in an interview with portal Aleksander Śniegocki, head of the Energy and Climate Project at WiseEuropa, co-author of the report “Contribution of domestic suppliers to the development of onshore wind power and its impact on the Polish market work until 2040”.

BiznesAlertpl: Could you summarize the conclusions from your report?

Aleksander Śniegocki: There are three conclusions for the Polish energy strategy from our study. Renewable energy sources, in particular the wind sector, are characterized by a high level of domestic supplies for the construction of new installations. In case of offshore wind farms, they currently exceed 50 percent, but domestic suppliers can satisfy up to 2/3 of the industry’s needs over the next 20 years. This is due to the fact that, unlike conventional energy, you do not need to import fuels or buy CO2 emission allowances at the electricity generation stage. On the other hand, Polish companies are already active in the supply chain for wind power on land. Moreover, if the possibility of building new offshore wind farms is unblocked, thousands of new jobs may be created indirectly and directly.

How much exactly?

In case of direct employment in the construction, production and assembly of components for onshore wind farms, the number of new jobs may exceed 10,000. The entire supply chain can reach up to 40,000 new jobs in sectors directly and indirectly related to the industry.

What must be done to increase the number of jobs?

The fundamental issue is the creation of a stable legal environment for wind energy. It is also necessary to plan the path of a gradual increase in installed capacity, which will be a clear development signal for the industry. After such a declaration, it should be expected that within 5-10 years the share of domestic production in the construction of wind farm components on land will increase significantly, along with the adaptation of Polish companies to new, attractive market opportunities. There is also a connection with the development of supplies for the benefit of the offshore wind farm sector. This will be an important signal for centers of traditional energy, including for Silesia, where the electromechanical and metal industries play an important role. These industries can find themselves as suppliers for onshore and offshore wind farms.

How many companies in Poland can participate in energy transformation?

In a large plant producing elements for wind farms can work from 1000 to 1500 people. Such companies, present in Silesia and also in the north of the country, export their products to the European market. You can talk about a dozen large Polish companies that can find themselves in this industry and about hundreds of smaller companies. Ultimately, the industry may jointly maintain approx. 40,000 posts.

So what is missing for these jobs to be created?

As I mentioned earlier – the key is whether companies will follow new trends. This, in turn, will depend on whether Polish entrepreneurs and international concerns will perceive the will of the government to sustain market development. In the report, we show that companies with both Polish and foreign capital are already in the supply chain of wind energy. There could be many more if we did not have the legislative carousel.

What must happen so that companies which were suppliers to the mining sector to become suppliers to the wind farm sector?

The electromechanical industry produces not only for mining. It also supports such industries as the chemical or metallurgical sector. However, companies are beginning to see the nascent potential of onshore wind farms. The role of the state is not to create an all-encompassing, precise, top-down plan to create Polish technology suppliers. Instead, it should focus on a clear signaling of the direction in which the energy industry will follow. If the direction of sustainable development is outlined, medium and small companies, as suppliers and sub-suppliers, will focus on this sector. The uneven investment cycle may be a problem. Such a situation took place in Germany. Instead of a constant trend, growing in subsequent years, there were shortages of orders. Unless the government has set a fixed growth prospect for the sector, potential suppliers will not risk building new wind technology competences – and it’s hardly surprising.

If we assume a chaotic expansion of RES power by a gradual increase in subsequent gigawatts once every few years, it is difficult to count on the fact that domestic companies will be able to adapt their production offer for the needs of wind farms in such a short time. This situation will not allow new suppliers to enter the market. If we already knew what the industry development path would look like in the 1920s and 1930s, then companies, suppliers and sub-suppliers would be able to prepare for this period. Such problems are not only found in Poland, but also in Europe, even in Germany.

In which industries we can be competitive?

Poland can focus on competing with the quality of regulation. It is clear that the energy transformation towards decarbonisation of the economy will accelerate. Demand for electricity will grow, accelerating in the 1930s. This will result from the elimination of conventional energy carriers in other industries through their electrification. Therefore, it will be necessary to expand the transmission networks, prepare the system for a large share of dispersed sources, as well as dialogue with the public allowing for social acceptance.

The report shows that by 2040 the installed capacity of wind farms on land could reach 24 GW. Is this level achievable under the current distance law restricting the construction of new wind farms on land?

It is possible to achieve, but not with the current law. The issue of expanding the network or increasing social acceptance is something that the rulers have an impact on. This should be an element of active shaping of the Polish energy policy, and not a passive response to the existing problems of individual technologies.

Maintaining the current path of energy development will be impossible due to rising prices of CO2 emission allowances. It is worth working now on designing a new energy vision for Poland. Already in 2030, it may turn out that throughout Europe it is starting to accelerate zero-emission electrification of the entire economy, and we will not be ready for this process. We should start preparations for this new reality right now, not to act at the last minute and not to bear disproportionate economic, social and political costs. Remember that if there is no dialogue with interested parties today – including local communities – about the direction in which the Polish energy industry is heading, when the crisis comes, the time for a peaceful conversation will simply be lacking.

Interview by Bartłomiej Sawicki