Photo: Maciej Miniszewski

Climate and Energy advisor Maciej Miniszewski on transforming Poland’s energy mix

Polish electricity is predominantly powered by coal. What can be done to change this?

You can read this article in 12 minutes

Forecasts by Polish decision-makers indicate that achieving 51 GW of installed capacity in wind and solar energy is feasible. Analysis by the Polish Economic Institute suggests that up to 67 GW is also possible.

However, we must remember that this cannot be achieved overnight. Moreover, from the perspective of energy security, stable, low-emission energy sources are also important,” emphasises Maciej Miniszewski, a senior advisor from the climate and energy team at the Polish Economic Institute.

Dorota Ziemkowska-Owsiany: Currently, the Polish energy mix relies heavily on coal, which accounted for 63% of the share last year. What do you think the energy mix should resemble in the near future to be optimal for Poland?

Maciej Miniszewski, a senior advisor from the climate and energy team at the Polish Economic Institute: The term optimal” holds great significance here as it denotes the existence of an ideal situation wherein greenhouse gas emissions are significantly reduced while ensuring energy security.

In the National Energy and Climate Plan, decision-makers aimed for a share of renewable energy sources in the electricity sector exceeding 50% in final gross energy consumption. When analysing potential development scenarios at PIE, we calculated that achieving up to 55-67 GW of installed capacity in wind and solar energy is feasible compared to the forecasted 51 GW.

However, it’s important to remember that this transition cannot occur overnight. Additionally, from an energy security standpoint, stable, low-emission energy sources hold importance. Therefore, in our analyses of potential development scenarios, we also considered the role of nuclear energy.

In the report you co-authored, PIE analyzed three scenarios – coal, renewable energy, and the Polish Energy Policy scenario until 2040. The latter is based on the development of the nuclear power plants you mentioned. What conclusions can be drawn from these analyses?

Thus far, we’ve prepared two reports – one focused on electricity mix scenarios until 2040, and the other on the costs of lack of decarbonisation. In both reports, we emphasised accelerated investments in renewable energy sources, increasing the role of nuclear energy, or maintaining coal-based energy in some form.

Let’s first examine the last scenario. Although it’s not frequently discussed in the media, it’s essential to note that maintaining coal-fired power generation entails significant costs, such as investments in the maintenance and modernisation of coal-fired units. These costs could be 18-22% higher by 2060 compared to scenarios based on renewable energy sources or nuclear energy. Therefore, maintaining coal-fired power generation is unfavorable both environmentally and economically.

However, when it comes to determining the correct scenario between accelerated investments in renewable energy sources or nuclear energy, it’s challenging to provide an unequivocal answer.

When analysing scenarios not involving investments in coal energy, we observe that the greater the proportion of low-emission sources in the electricity mix, the lower electricity prices on the wholesale market will be in the future. By 2040, electricity prices on the wholesale market could be 56-70% lower than in scenarios maintaining coal-fired energy. This translates to lower costs for households and increased competitiveness for our economy. It’s evident that calculating profits and costs isn’t straightforward. This complexity is evident in the conclusions of your report regarding the scenario of strong development of renewable energy sources. While it aims to achieve the lowest energy prices by 2040, it’s associated with implementing the most expensive investments.

Today, not only the Polish Economic Institute but also various institutions in the country are engaged in modeling the electricity mix. The conclusions from these analyses are relatively consistent. However, we must acknowledge the challenges associated with certain changes. The issue of network development is a challenge not only for Poland but for the entire European Union and the world.

According to forecasts by the International Energy Agency, achieving net-zero emissions by 2050 will require nearly doubling the global energy network’s extension. In the case of the EU, the current electricity network’s length would need to increase by 38%, from 10.8 million km in 2021 to 14.9 million km in 2050. However, 40% of European distribution networks are over 40 years old. What are the implications? Wind farm projects with an 80 GW capacity were halted in the EU due to permit issuance issues at the end of 2022.

Moreover, most current electricity networks were designed for large, centralised power plants and do not meet the needs of distributing electricity from decentralised sources.

Another aspect is interconnectors, or international network connections. Increasing their capacity would enable higher exports and imports of electricity between countries, facilitating a greater share of renewable energy sources in electricity production.

As you mentioned, the final profit and cost calculation isn’t easy due to the need to consider both quantitative aspects and social and political factors. Energy transformation will only be possible with society’s support. Additionally, besides financial resources, human resources such as industry specialists, technicians, and raw materials are necessary, as outlined in EU plans, which aim for partial independence from imports from a single source through intra-community production and recycling processes.

Here, Poland can play a crucial role through its coking coal mining or copper production, essential for manufacturing wind turbines, for example. Polish coking coal production accounted for over 90% of total EU production and nearly 30% of EU demand in 2022. Polish plants also produced over 390,000 tons of copper in 2022, the highest amount in the EU, meeting almost 10% of EU demand.

Therefore, we’re dealing with an interconnected system that decision-makers must consider when making strategic decisions regarding the energy mix.

Could any European country serve as a model for Poland in this regard today?

Each country has its own unique characteristics and experiences. On one hand, we could look to Scandinavia for transformation leadership, particularly in terms of the share of renewable energy. However, they utilise entirely different technologies, and the possibilities vary.

On the other hand, we could analyze France’s policies from several decades ago, which positioned the country as a leader in nuclear energy today. Nonetheless, it’s unlikely that this transformation path can be replicated.

Currently, the entire European Union is transitioning towards developing renewable energy sources, but support should be allocated fairly to countries based on the pace of implementing changes. Presently, national energy and climate plans are being submitted in the EU, and they vary significantly.

Poland, with the most carbon-intensive electricity mix in the EU, could emerge as a leader in energy transformation, as evidenced by investments in photovoltaic panels. The production of electricity from solar energy in Poland more than doubled from 3.9 TWh to 8.2 TWh between 2021 and 2022, marking a 107% increase – the third largest globally.

We’re also witnessing a gradual decline in the share of coal in our energy mix. Last year, this share was the lowest in the history of the Polish power industry. However, the think tank Instrat noted in one of its reports that our pace of phasing out coal is inadequate to meet the CO2 emission reduction goals set by the European Union. It’s simply too slow. How do you assess this?

As I mentioned, the transformation must be fair and socially acceptable while also accelerating. The average age of a coal-fired power plant in Poland since the launch of the first unit is approximately 50 years. Coal-fired energy necessitates costly modernisation. Moreover, our hard coal mining sector is less productive compared to other regions globally. It takes about 10 times as many miners to extract 1 ton of coal in Poland than in the United States or Australia.

With rising coal mining costs, we’re increasingly reliant on imports. Therefore, we must recognise that each investment in renewable energy sources reduces our dependence on third countries.

Let’s discuss the European Union requirements concerning the charging network for heavy vehicles. By 2030, there should be a charger available every 60 km along the core Ten-T network and every 100 km along the comprehensive network. It’s estimated that by 2030, around 200 public truck charging stations will be established in Poland. Presently, there are none. Do you consider this feasible?

It’s certainly a significant challenge. However, few analysts would have anticipated such a rapid decrease in costs and increase in solar energy production just a few years ago.

The AFIR project (EU regulation on the development of alternative fuels infrastructure) is the outcome of a well-considered process aimed at developing the entire transport and logistics sector in the European Union. It indicates the direction for the sector’s changes and what the Polish transport and logistics sector should focus on and prepare for. Currently, we lead in international heavy road transport, and it’s worth preserving this position. However, to achieve this, we must adapt to changes.

This is evident in the modifications to tolls in Germany, where emissions-based road tolls for heavy vehicles could impact our competitiveness if we don’t invest in zero-emission vehicles. Nevertheless, I believe our industry comprehends the challenges it faces.

There’s often a question regarding why companies should invest in electric cars when public infrastructure is practically non-existent. However, let’s consider Germany, where about 1,800 electric trucks were registered between 2021 and 2022, compared to just eleven in Poland during the same period. Companies are prioritising zero-emission vehicles to prepare for imminent changes in the industry once the infrastructure is established.

While the goals you mentioned are ambitious, decision-makers are confronted with the task of achieving them. Nonetheless, we see that the industry isn’t waiting, and companies are investing in charging points at warehouses or distribution centers themselves.

Returning to the EU requirements, charging zones must include at least one station with a minimum output power of 350 kilowatts. Given the anticipated high number of these stations, do you foresee any challenges with connections to the distribution network?

Indeed, these requirements pose a considerable challenge. Depending on whether it’s a core or comprehensive network, the output power should range from a minimum of 1,500 kW to 3,600 kW by December 31, 2030.

By then, according to forecasts by the Polish Economic Institute based on the potential electrification of heavy transport, electricity consumption in the country may rise by approximately 4%. This will pose a challenge for the entire economy, particularly for the power system and network infrastructure.

Additionally, it’s evident that connection issues present a significant obstacle for companies wishing to install chargers independently. They often face delays of 2 to even 4 years for connection conditions and the possibility of connecting to the network.

Why does it take so long?

Primarily, it’s due to costly and time-consuming investments and ensuring the power system’s security. Complicated administrative procedures also contribute to the delays. In summary, distribution network operators must meet various requirements and consider the entire power system holistically. For instance, ensuring that a truck charger doesn’t disrupt the local community’s electricity supply while charging.

The scale of the problem is illustrated by the fact that in Poland, distribution network operators refused to issue connection conditions for a total of 10,775 sources (mainly renewable energy sources) with a combined capacity of 65.6 GW in 2021-2022. This is nearly three times the capacity installed in photovoltaics and wind energy in 2023.

However, such challenges aren’t unique to Poland. In some EU regions, it takes up to 9 years to obtain a permit for connecting an installation. In the UK, 140 projects with a total capacity of 300 GW are waiting to be connected – three times more than the currently installed wind capacity.

If the network were adequately prepared to accommodate numerous new chargers, we could witness much faster development in this sector. Nonetheless, it’s essential to view the transport and electricity sectors holistically to be optimally prepared for changes affecting not only selected industries but the entire economy.