„The key element in all energy policies in the West is the energy market and its competitiveness. Meanwhile, in Poland, the market has been completely destroyed,” warns Grzegorz Wiśniewski, president of the Renewable Energy Institute, in an interview with BiznesAlert.pl. „So far, we are following the policy the prices of energy and raw materials being dictated by national monopolies and systemic dependence on imports from the other,” he adds.
BiznesAlert.pl: Due to the security concerns in the region, the government has decided to update Poland’s energy strategy. What is your opinion of the upcoming changes?
Grzegorz Wiśniewski: When we talked in 2015 about the possible directions of the new energy policy, I myself underestimated the security risks associated with the Nord Stream 2 project. While some analysts were able to spot this threat then, it was not common knowledge as it is now. Today, we know that it has created a threat to Europe’s energy security, to which we are only now responding. However, this argument is now being abused. Bearing all this in mind, I must say that the pendulum between the market and security has swung too far in one direction and energy security is used to explain everything, including eradicating the energy market in Poland, which motivated all of us to be more efficient.
How is the energy market in Poland being eliminated?
I have observed changes and attempts to change the definition of energy security in the energy law. In one of the government projects from 2016, an attempt was made to remove the concept of competitiveness from the definition, and to marginalize environmental issues. The government of Beata Szydło and the Minister of Energy Krzysztof Tchórzewski gave priority to security. Currently, energy policy objectives are aimed at narrowly understood energy security as diversification of fossil fuel supplies. This is dangerous, because building sustainable energy, environmental security or competitiveness of the energy industry or the economy on fossil fuels and is impossible. We’ve gone too far. There are no distinctions anymore and everything is about energy security and politics. We do have circumstances that reinforce the importance of security due to the pandemic, disrupted supply chains and war, but we are not catering to technological or raw material safety for the green transition as much as we cater to fossil fuels. One cannot blindly, or even mindlessly, take a narrowly-understood energy security banner and start drawing political plans that lack rationality that are to improve energy security. For example, we have plans to build several dozen reactors-almost an atom in every house- and the special act about investments in large reactors that are built almost without thorough permits, without paying attention to the costs and reactor safety issues that have become complex nowadays. If we had a normal, non-doctrinaire, public debate and environmental education, this approach would not pass.
Is this about elections?
Today we have a political war in the media and everything is explained away by the war in Ukraine without any answers on how to solve issues once it’s over. The first energy package of the European Union was adopted in 1996 to introduce a real energy market powered by more and more low-cost, local and clean sources. The market mobilizes to action, but it is not interesting for those who do not want to act. Since Poland’s accession to the EU, the energy sector has developed too slowly, not out of the need for transformation, but out of the desire to live off the rent of being late. Instead of seeking decentralization and support for independent energy producers, we respond first with consolidation and now with monopolization. We have implemented EU rules with delays, with transitional periods and our own solutions, which have always served to delay the transition. We have made it more worthwhile to pay penalties than to implement EU rules that make more sense. We’re late, we’ll be left behind, and there’ll be no profit. We were an exporter of fuel and energy, and we’ve become an importer. We had cheaper labor and energy costs, and all this is going away, but we did not develop new advantages. We did not take advantage of being behind, but we are paying for falling behind and with increasing effort we are protecting traditional interest groups in the energy sector. At the same time to ease the pain caused by high bills, the voters are fed with visions of the future that are not very realistic.
Have we not benefited from technological change?
Banking took advantage of these changes because it jumped right to credit cards without looking at checks. We haven’t done that in the energy sector. State-owned energy is slowly becoming the ball and chain at the feet of the entire economy. He will explain away any failures with Putin to protect our interests. Meanwhile, every day lost today in the energy sector, in a year becomes a week, and then a month, a quarter- sometimes running beyond repair. All policies in the West, whether in the EU or US, do not abstract from the energy market, because it is the energy market that entails technological changes. There is a lot of talk about energy security based on uncompetitive technologies and fuels that will not be here in a decade. However, this is not a miscalculation or a lack of awareness. There is a reason for this absurd.
What is it?
The enfranchisement of the energy sector and the overwhelming will to feed it with taxpayers’ money in order to serve the interests of a certain group. Those who did not risk anything in the past, today say that they deserve money from the budget. Updating Poland’s Energy Policy Until 2040 will not happen in a vacuum. The EU’s REPowerEU program does not envisage a retreat from the energy transition, but rather surviving several years of crisis and accelerating change in order to become independent from imported fossil fuels. Poland also has no fuel except increasingly hard-to-reach coal. It needs energy efficiency and renewable energy, and consequently decentralization and demonopolization. Every 1 kW of photovoltaics is half a ton of coal saved per year, and a kilowatt of wind power is two or three tons of unburned coal. The actual goal of the current policy is not greater energy security, but throwing a lifeline to coal and developing the atom – tasks carried out by the monopoly, which will cause even greater dependence on technology and raw materials. Two or three years ago, I would have suggested that we accelerate the transition away from coal and invest in an alternative, but we have wasted too much time. Now we have to maintain coal-fired power generation and modernize 200+ MW power plants. This is the result of neglect of the energy transition. We have condemned ourselves to having to resuscitate power plants that under normal conditions would be shut down, but at this point our economy would collapse without them. This is precisely the result of the overused slogan of energy security in practice, i.e. statism, cost and impossibilism, but under noisy slogans.
What is missing from Poland’s energy policy?
There is a lack of competition and market. Despite many energy crises, the energy market is at the center of all policies in the West. On the other hand, the energy market is missing from all the satraps built on the export of fossil fuels. Unfortunately, the energy market in Poland has been seriously marginalized, and this will lead first to the loss of competitiveness of the energy sector, and then the economy. The capacity market and PSE (grid operator – ed.) are trying to keep old coal sources in power, so that the price of energy paid to them does not fall, and compensation should be paid for RES shutdowns at generation peaks. Prices do not reflect the value of energy over time, and the market without price information does not work. The authorities that are supposed to guard the energy market – the Office of Competition and Consumer Protection and the Energy Regulatory Office – do not work or do not work effectively, because the problem is higher, at the level of state policy. Why do we need so much rhetoric about security, if in such conditions a significant number of small businesses will not survive. If we do not get out of the manual control of prices, it will eventually be like in the days of Maduro in Venezuela, where the military was responsible for making sure that stores adhered to prices set by politicians. Fuel prices are falling, the profits of our monopolies are growing, and we are subsidizing energy consumers out of the taxpayer’s pocket.
What should be done?
If someone really cares about energy security, it is worth realizing that we are still a country with a small share of zero-emission RES per square meter, that is, we have untapped potential and a small share of RES per million inhabitants. In this situation, it should be easier with social acceptance, but due to the blatant propaganda, people do not fully recognize this fact yet. We have massive resources of solar and wind power generating the cheapest energy. In this situation, blocking it with the Distance act goes against the raison d’etat, the interests of the economy and energy consumers. It is also a blow to the energy security of the country – we do not take advantage of our natural location and we are becoming dependant on regimes from all over the world. If we had more onshore wind farms, we would now have the space to act and we would not have to operate under the pressure of time and loss of competitiveness. Instead, we have a litmus test of how strong our commitment to energy security is.
What else?
Already the government of Jerzy Buzek and AWS understood that energy security had to be built from the bottom – up-from the municipal level to the next, and this idea entered the Energy Law Act of 1997 in the form of a triangle of goals with components: technical, economic and environmental. Why was this forgotten and distorted? Even in the time of Jarosław Gowin, an industrial policy was adopted to provide equipment for renewable energy. There is no such element in the new energy policy of the state, we have a silo policy with an alienated energy sector. You can miss a Ministry of Economy, in which the energy sector was subordinated to the economic goals of the country, was supposed to be a servant. It is designed to provide as much energy as needed at an affordable price at any given time, and not to stink half the country by leading to either the direct burning of high-carbon fuels by residents or the use by industry of the most expensive energy from high-carbon power plants. That is, we have energy poverty with a rich monopoly in the middle, which is all the more important and the more it earns the smaller the power reserve due to the lack of its previous investments in RES.
Is this about state-owned companies participating in the energy sector?
This is not just about monopolization in terms of market concentration. I am also thinking of the impact of anti-EU rhetoric and national regulations that arise under the dictates of the energy sector. It’s a positive feedback loop. There is no one to stop this madness. The law is created for the interests of a narrow group, money is burned to support a sector that is losing competitiveness at our expense. Why do citizens need an energy policy that shows that in 10 years there will be what conservatively-minded power engineers already have in the databases of issued permits for connecting RES to the grid? The policy should encourage the approval of new connections, and not deal with the accounting of what the monopoly has already done. What is needed is a concrete plan for changes on the scale of each municipality, voivodeship, and not consolidated plans of several barons fighting for influence in Poland. We are killing any private initiative, and the power industry eats its own tail. Never before in a free Poland has any group mastered so perfectly the art of being rewarded for not taking action other than a destructive influence on regulations to block competition and new technologies. But it is impossible to pay endlessly, because the budget will not allow it and we must rebuild the energy market, because the economy will lose international competitiveness. So far, we are following the policy hat dictates energy and raw material prices on the one hand and systemic dependence on imports on the other. It’s easy to get into the comfort of a monopoly and the addiction of subsidies, but rehab will be painful, for everyone.
Interview by Wojciech Jakóbik