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Coal Energy 12 December, 2018 10:00 am   
COMMENTS: Janusz Steinhoff

Steinhoff: Question marks around the energy strategy (INTERVIEW)

Poland should diversify the sources of obtaining electricity. Dr eng. Janusz Steinhoff, Deputy Prime Minister and Minister of Economy in Jerzy Buzek’s government, in an interview with BiznesAlert.pl, emphasizes that basing the energy industry on coal has no economic justification.

BiznesAlert.pl: Should Poland continue to invest in the coal sector and connect its future with it?

Janusz Steinhoff: Poland no longer invests in the coal sector, we do not build new mines. For many years, we have been limiting coal mining for economic reasons. Throughout the transformation period, we had to liquidate permanently unprofitable mines or those in which resources ended. As a result, the number of active mines has fallen, and with this decrease, the level of extraction and the number of employees have been reduced. In 1990, we extracted 145 million tons of coal. Last year it was already about 65 million tons. Employment in the mining sector is also falling. Sometime around 380 000 people worked in this industry, currently around 80 000. Whether we will build new mines will depend on economic factors. The announcement of the Ministry of Energy regarding the construction of coal-fired power plants is unambiguous. The 1,000 MW unit at the Ostrołęka power plant – if created – will be the last coal block. The share of coal as an energy carrier in our energy mix should start falling quite quickly. At the same time, by 2020, RES’s share should amount to 15 percent. Unfortunately, we will not be able to achieve this. The government’s failure is to weaken investment in wind farms through irrational regulations and the uncertainty of investors caused by it. In turn, due to the need to compensate for unstable energy sources, such as RES, it is also necessary to develop gas energy. Therefore, there is no rational justification to increase the share of solid fuels in the power sector.

In my opinion, it was a mistake that previously no diversification of energy carriers in the power industry began. We have practically a carbon monoculture – based on hard coal and lignite. Poland is and will be burdened with the costs of CO2 emissions, i.e. the consequences of the energy and climate package. As a result of the conscious climate policy of the European Union, prices of CO2 emission rights increased from 5 to 20 euro per ton. At 1 MWh, Poland emits a ton of CO2. This significantly raises the cost of energy production, and this will be strongly felt by our economy and the recipients of the communal facilities. The compensation offered by the government can not be a long-term solution. The Polish position presented by the government at the climate summit in Katowice is definitely more rational than the position of President Andrzej Duda. Unfortunately, I get the impression that the president did not read the signs of the times and took a position far from the expectations of the representatives of countries that are going to fight for better and fairer tools of atmosphere protection in Katowice. Because it is a global problem, not a local problem, and it can only be solved by common forces.

Is it possible to mine coal in Poland for 200 years?

The extraction of each mineral from the deposit must be economically justified. We do have relatively large reserves of hard coal, but its extraction is likely to be economically unjustified in most cases. This is mainly due to the fact that coal seams are located deeper and deeper from the scale of mining and geological threats and the potential effects of mining damage. Talking about the fact that we will mine coal at all costs to guarantee energy security is not consistent with the modern vision of energy and any economic rationality. The world is constructed so that individual states are often forced to import energy carriers. The level of Poland’s dependence on the import of energy resources is relatively small, among others because we have a coal-based electrical power plant. Although in recent years we have been importing it more and more – this year we will close imports at the level of approx. 18 million tonnes. It’s a big volume. It will remain so because we do not build new mines. The Polish government refers to potential foreign capital investments with insufficient activity.

The President’s words on Barbórka’s occasion that he would not allow “murdering Polish mining” are a misunderstanding and an example of a quite effective rhetorical figure with a populist color. Nobody wants to “murder” any mine, but economic activity must be embedded in the realities of economics. Poland spends large budget resources on further mining restructuring programs. There are also large transfers to the Social Insurance Fund, which we support the pension system for miners and their families (this applies not only to miners employed in hard coal mines). Mining must be discussed in isolation from populism, based on economic realities and respect for the hard and dangerous work of miners. Our politicians fall into two extremes. As there is an accident in the mine, there are opinions that they should be quickly eliminated in order to avoid tragic events in the future. In turn, on Barbórka they say that we will carry out the planned level of extraction without looking at the economy. I would advise the political class to take more responsibility on our energy policy.

Minister of Energy Krzysztof Tchórzewski presented the draft energy strategy until 2040, which assumes that the share of coal in the energy mix will fall to 2040 from the current 80 to 60 percent. How do you assess this assumption?

This is just a step in the right direction, but not enough. I think that the project requires serious discussion, for example in the field of nuclear energy or RES. We do not know whether we will be able to support the atom because the investment costs of nuclear power are much higher than in the case of gas, renewable energy or coal. There is an announcement by Minister Tchórzewski that the block in Ostrołęka will be the last coal installation in Poland. It is not known, however, whether it will arise. We should definitely lead to the diversification of energy carriers in the power sector. It would be a strategic mistake to base it on a monoculture of high-emission solid fuels.

Interview conducted by Piotr Stępiński



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