Poland´s energy strategy further based on coal
At the beginning of February 2021, the Polish government adopted a resolution on the Energy Policy of Poland until 2040 (PEP2040). The strategy is based on three pillars: just transformation, building a zero-emission energy system and clean air. However, it has not yet been published anywhere.
According to the information provided on the government’s website, in 2030, 56-37% of energy in the energy mix will come from coal, it is assumed that greenhouse gas emissions will be reduced by 30% compared to 1990. The share of RES in gross energy consumption will be at least 23%, and the installed capacity of offshore wind farms will be about 5.9 GW. In 2040, more than half of the installed capacity will be zero-emission sources, and the share of coal in electricity production is to be 11-28%. The government has estimated the cost of Poland’s energy transformation at PLN 1,600 billion.
PEP 2040 assumes that the percentage share of coal in the power industry will depend on the EU emissions trading system (ETS). This means that the higher the prices are, the more the role of coal in electricity generation will decrease. However, it is not yet known how much, according to the Ministry of Climate and Environment, the „high price of carbon credits“ amount to, as the document has not yet been published on government websites. On 3 February 2021, the ETS credit carbon price reached €38 per tonne of CO2. The 2019 version of the document predicted that this price level of carbon credits would be reached in a dozen years. It can therefore be assumed that we are already entering high CO2 carbon credit prices and this will translate into a faster phasing out of coal-fired power generation.
The rate at which coal is being phased out of the energy sector and the rate of reduction in greenhouse gas emissions is questionable, as it falls short of the EU’s ambitions. While Poland has not blocked the EU’s goal of achieving climate neutrality in 2050, it has submitted a dissenting opinion that does not envisage decarbonising the economy to the extent of the EU’s ambitions, which could lead to support from the Just Transition Fund being halved. The 11-28% share of coal in Poland’s energy mix in 2040 contradicts the intention to completely decarbonise the EU energy sector by that year.
PEP 2040 also assumes that the reduction of coal use in the economy will occur in a manner that ensures a just transition. However, overly slow plans to decarbonise the economy indicate that PEP 2040 is artificially prolonging the life of mines. That is, new mining workers will still need to be educated to deal with unprofitable mines after 2040. A complete phasing out of the coal sector by 2035 is possible. This would require the creation of new jobs in sectors that could employ former employees of coal mines, coal-fired power plants and the surrounding industry. For example, in the renewable energy sector or in the thermal modernisation of buildings.
At this point, it is difficult to assess the content and value of the document, which has not yet been published, but the government’s plans for such a late decarbonisation of the economy do not inspire optimism. The postponed shift away from fossil fuels and such delayed development of the renewable energy or electromobility sector may lead to a loss of competitiveness of these new Polish industries on the European market. Of course, at the same time we will have to bear the environmental costs of further coal exploitation. It will result in drought or the destruction of water resources, which again affects the condition of agriculture in coal-mining regions. Delay in taking a decision on accelerated transformation may therefore lead to losses greater than the outlay on energy transformation, which should be treated as an investment in the future.