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Energy 22 September, 2020 12:00 pm   

The government is bursting at the seams. The energy sector will wait for its reform

The disputes between the factions in the United Right coalition put into question the long-awaited reforms, without which the energy sector will not be able to handle climate policy and other challenges – writes Wojciech Jakóbik, editor in chief at BiznesAlert.pl.

The internal friction between the Law and Justice, Agreement and United Poland parties have surfaced during discussions on animal rights. However, that issue was just a pretext to continue the dispute, which had started earlier, but which may now enter its deciding phase, provided the rumors on the United Poland and its leader Zbigniew Ziobro leaving the coalition are confirmed.

Law and Justice is fighting with United Poland over power within the government, as well as over basic issues such as the government’s attitude towards the EU climate policy. Jarosław Kaczyński’s party wants reforms, albeit by many considered moderate, which is exemplified by the latest draft of Poland’s Energy Policy by 2040, which could not have been published without the approval of the party’s top officials. In its most pessimistic scenario for the coal industry, the energy strategy says that the participation of this fuel in the country’s energy mix will drop to 11 percent in 2040.

The document was met with a strong backlash from miners’ trade unions, which gave the Polish PM Mateusz Morawiecki an ultimatum, and a week to engage in talks on reforming the energy and mining sectors. The miners want Energa, owned by PKN Orlen, to return to the original idea to build a coal unit at the Ostrołęka power plant, and thus withdraw its recent decision to switch the planned bloc to gas. This is only one of the demands made by the trade unions, but it is the most controversial, and it may be difficult for the government to meet. However, this particular expectation may be used by the divided government factions as a bargaining chip to fight for support from the unions.

The viewpoint of the MPs from the Agreement party is yet to be revealed, but their position on reforming the energy sector has always been more radical. One example of that is the support Jadwiga Emilewicz, the Minister of Development, gave to renewable energy sources, and another is the program Energia Plus announced by Jarosław Gowin, leader of the Agreement. Therefore, if the course of events depended only on reasoned arguments, it would seem that Law and Justice together with Agreement would stand together against United Poland when it comes to Poland’s energy and climate policy. However, a stalemate is likely due to political motivations.

The future of the Ministry of Climate, which is responsible for energy strategy, is uncertain, and so is the energy and mining sector reform. The PGE Group, which is in the process of spinning off coal assets, has admitted that continuing the reform would be possible only after the government reshuffle, which in turn, depends on the coalition negotiations. Whereas, the reform itself depends on adopting the energy strategy, and on the talks with miners who criticize the document. At the same time, the talks hinge on how the conflict in the United Right right will end. This means, the politicians are cooking up hell of a season for the energy sector, which may undermine the certainty of changes that had been already announced in the strategies of state-owned companies, especially PKN Orlen, which decided it would reach climate neutrality by 2050. That deadline is even earlier that the government’s, which is still negotiating with the EC on the time frame.



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