You can’t disagree with the Polish government: Poland needs a sustainable energy system, which will boost the national economy and fully serve the needs of Polish people and business. Unfortunately, the new Polish energy plan to 2050 focuses on short-sighted support to the mining industry, instead of investing in Carbon Capture and Storage (CCS) technologies, the only possible future for a coal-based Polish economy.
The Polish government are set to continue supporting unabated coal in their new energy plan. From 2015 – 2018 Poland will create a new capacity mechanism favouring coal power generation, and plough more taxpayer cash into an unprofitable mining industry to reduce coal imports to zero. The chosen scenario sees renewables, gas, and nuclear with less than 10-15% share of the national energy mix in 2050, respectively. Whilst the Ministry of Economy recognises the importance of “clean coal technologies”, it plans no investment in the coming years.
The strategy is a bad deal for Polish consumers, and without CCS, a very bad deal for the climate. The costs of building new coal power stations and keeping existing coal mines running will be immense. The latest report by the Warsaw Institute for Economic Studies (2014) “The Hidden Coal Bill” indicates that between 1990 – 2012 the mining sector alone received PLN 135.944 billion (€32.368 billion) in direct and indirect government subsidies. Only in Q1 2015 Polish hard coal production recorded a $389 million net loss. In face of declining global coal prices, with 26% decline in 2015 and unprecedented drop below $50 a metric tonne for 2016, it is highly unlikely that expensive Polish coal will compete with the imports. Poles should prepare their piggy banks for higher electricity bills, or higher taxes from ever increasing subsidies for coal mining.
You may wonder by now what the Polish government could possibly get out of this strategy. The answer is always the same: energy security. Energy security can be understood in many different ways, but in Warsaw it means independence from imports and foreign influence. But real longterm independence can only come from moving to a more balanced, mixed energy system, or investing heavily in CCS.
It might take shock therapy to wake Poles up to the message: unabated coal is not going to be the future of the Polish economy. The strategy should not hide its costs; the public should be made aware of how much the government’s position is costing them. Imagine cutting back coal subsidies and putting all costs into energy prices; Billions of euros invested in loss-making industry could be channelled into economic sectors of the future. Indeed, Poland has a chance to lead Europe on Carbon Capture and Storage, the technology the plan so desperately needs to achieve its economic and climate objectives.
Sandbag proposes the following ways to improve the energy strategy:
· Cut back subsidies for coal power generation, and ensure all costs of the proposed energy strategy are put onto electricity prices (mining restructuring costs and capacity mechanism payments).
· Keep costs of restoring adequate energy supply low for consumers by encouraging all forms of capacity in the system.
· Take action to close 6.4 GW of old coal capacity and place caps on construction of new coal units.
· Invest in Carbon Capture and Storage & Utilisation (CCS&U) as soon as possible.
Polish energy policy needs to change. Read our full consultation response (in Polish or English) and tell us if you agree with Sandbag’s take.
All pictures used under Creative Commons Licence. Credit Greenpeace Switzerland and Polish Ministry of Foreign Affairs