Alerts Climate Policy Coal Environment Winter Package 28 August, 2018 7:30 am   
Editorial staff

CEO Grzegorczyk: the cost of CO2 emissions impedes the energy transition

Increasing costs of the CO2 emissions are depriving the Polish energy producers of money they could be spending on the energy transition – judges the president of Tauron, Filip Grzegorczyk. As he points out – ultimately the high CO2 prices will harm the entire national economy and Polish consumers.

The boom in emissions allowances’ prices

“We are facing an unusual situation. It has never happened before that the CO2 prices increased by 300 percent during a single year. And I cannot exclude a scenario where by year’s end this price will reach 25 euros” – Mr Grzegorczyk told PAP.
At the end of 2017, prices of the CO2 ETS emissions allowances were around 6 euros per tonne, while in August 2018 they reached 20 euros. Tauron estimates that in H2 2018 it may incur twice the emission costs it incurred in the first half of the year.
According to President Grzegorczyk, there is no doubt that “the CO2 price is a quasi-fiscal environmental charge we paying for the specific, premeditated and increasingly tighter EU policy. It is a premeditated attempt to very strongly force an energy transition” – he added. “It is not a comfortable situation for us” – stressed Tauron’s President, adding that the energy producers have no influence on it whatsoever.

Strangling Tauron

As Mr Grzegorczyk has said, for this transition to succeed, strangling those who are to execute it is not the right way. In his opinion, there is no place for violent changes in the power system, as can be seen in the CO2 prices, it is a revolution attempt. “I am afraid it is outright counterproductive” – he said. At the same time, he stressed that “In principle, we accept the direction of the transition towards the RES”. However, a transition is a process that requires both time and money.
The President of Tauron reminded that the EU has accepted the declaration by both the Polish government and the Polish energy companies that the Ostrołęka power plant will be the last large coal-firing source and after completing the coal-fired units’ constructions in progress, Poland will transition towards new-build zero- and low-emission solutions. “However, these changes take money and today we are senselessly forced to spend it on CO2, so in the end, we may have not enough left for the transition” – argued Mr Grzegorczyk.

Energy as a luxury good

He has stressed that this trend, independent of Polish companies, is dangerous to the country as a whole, as growing CO2 prices will impact the energy prices and subsequently the entire national economy, impacting investments or resulting in relocations of certain industrial installations. “Frankly speaking, this is pushing Polish citizens towards energy poverty. The CO2 policy may cause energy to become a luxury good” – said Mr Grzegorczyk.

The President of Tauron has pointed out that from the point of view of his company’s standing, the favourable events will be the commissioning of the gas-fired power plant in Stalowa Wola and the new coal-fired generating unit in Jaworzno III power plant, planned for 2019. The construction of the 450 MW unit in Stalowa Wola is advanced in 86 percent; the construction of the 910 MW unit in Jaworzno has, in turn, exceeded 70 percent. Mr Grzegorczyk has reminded that a gas-fired source is much less polluting than a coal-fired one, and the Jaworzno unit, despite being coal-fired, is state of the art with much better efficiency and lower emissions than the old sources it will replace. “Doubtlessly this will be financially beneficial as we will need fewer emissions allowances. But if their price keeps increasing at such a horrifying pace, the problem will remain in place even for the high-efficiency coal- and gas-fired sources” – he judged.

The Polish Press Agency