Energy Winter Package 10 October, 2017 10:00 am   
COMMENTS: Mateusz Gibała

Steinhoff: Capacity market is best for stabilizing the sector

The capacity market is the only rational solution and the best remedy for the instability of the system caused by the specificity of the existing power generation sources – says Janusz Steinhoff, former deputy prime minister and minister of economy. 

Conventional energy sources will continue to guarantee Poland’s energy security for years to come. Energy produced from renewable energy sources, because of the particular nature of their work, is not able to cover a demand generated at a given moment. “We need capacities that are always ready to cover the power gap when the demand surpasses the supply. The maintenance of readiness is costly, but one needs to remember it is crucial to ensure stable and uninterrupted power supply,” Steinhoff told ISBnews.

He stressed that in the past long-term contracts were used to ensure the system’s stability. Currently we have the opportunity to use a more efficient tool – the capacity market. “This is why we need regulations that will speed up the introduction of this needed solution in Poland. After the Ministry of Energy’s announcement we may expect that a bill on the capacity market will be soon submitted to the Sejm. The energy sector is constantly developing and implementing new technologies whose goal is to protect us from blackouts and manage energy transmission. However, the construction of modern infrastructure takes time and this is why the capacity market is necessary,” Steinhoff added.

Winter package vs capacity market 

In his opinion, the European Union is the problem because it believes that the capacity market constitutes public aid, which, according to standards, can only be granted to power plants that emit less CO2 than 550 g/kWh.

“Poland does not have such power plants. This regulation in the winter package eliminates solid fuels from energy sources. We are right to protest against this requirement, as it cannot be adopted by Poland. We are in a peculiar situation as most of our energy is produced from brown and hard coal. We do not have a nuclear power plant and we produce little electricity from gas. We are obliged to comply with the EU requirement whereby by 2020, 15 percent of energy should be produced from alternative sources, which are unstable and have to be compensated for with gas. We will be doing away with fossil fuels gradually, but this requires a lot of time, not a year or two. This is why today the capacity market is the only rational solution and the answer to the risk of system instability caused by the specificity of the existing power generation sources,” the former deputy prime minister concluded.

The first reading of the capacity market bill at the Sejm was supposed to have taken place in September. However, the Ministry of Energy announced the legislative process was moved in order to make additional arrangements with the European Commission. Yet, Andrzej Piotrowski Deputy Minister of Energy announced that the project may return to the Parliament in October.

The justification for the bill says that Poland may experience a significant scarcity of power generation capacities in the next two decades. It will be caused by, on the one hand, the forecasted peak demand increase for power and electricity and, on the other, the fact that a significant number of power plants are planned to be shut down.