This story was originally published for ICIS Power Perspective subscribers on 27 November 2018 18:00 CET.
On 23 November, the Polish government published a draft document entitled “Energy Policy of Poland until 2040” (PEP2040). Based on the draft PEP2040, Poland is planning more renewable energy auctions in 2019 and 2020, but mainly bases forecast increases in renewable generation on solar capacity from 2022 and offshore wind from 2025 and decrease in onshore wind capacity after 2030. Between 2018 and 2035, approximately 16.7 GW of existing centralised coal-fired power generation is expected to be phased out of the system and around 4.3GW onshore wind capacity to leave the system, replaced by new coal, offshore wind, solar and nuclear power plants.Background The document attempts to replace the current official update of Polish energy strategy from 2009, when Poland adopted a package of legislation that included the commitment to increase to 15% the share of energy from renewable sources in total final energy consumption and to 10% the share of biofuels in the total consumption of transport fuels by 2020 One of the main purposes of the new energy strategy was to lay out a plan for meeting Poland’s increasing electricity consumption, which amounts to almost 170TWh and is expected to grow further The strategy will be used in preparing the national energy and climate plans, which will include national targets, contributions, policies and measures for each of the five Energy Union dimensions for 2021-2030 (integrated plans), required by the Governance Regulation The development of electricity generation infrastructure is addressed by part 2 A) of PEP2040, which outlines the roles of various fuels in the generation mix Analysis
Main pointsThe PEP2040 draft has been created when the majority of other EU countries that have coal have been discussing or have decided upon a phase-out of coal 10 EU countries decided to phase out coal, several more in discussion Phase-out will come in waves: 2021-2022, 2025 and 2030 The latest to announce its willingness to phase out coal was Spain this November However instead of putting a deadline, Polish government would allow the coal-fired generation to retire “naturally” – because of the old age, emission standards and high prices of EUAs Poland is also one of the last countries in Europe to still build new coal-fired power plants Whereas the PEP2040 hints at possibilities of merchant solar and onshore wind projects, it does not foresees merchant developments of onshore wind This possibly is because of the tightened regulation for new onshore wind power plants in 2016 Distance Act that is binding to onshore wind developers seeking new permits
The role of coal and lignite in the power balanceThe PEP2040 acknowledges that due to the international energy efficiency and environmental obligations “significant withdrawal of (coal) capacity is expected in several next years (especially after 2029)” The strategy expects that the energy production from existing units would gradually being replaced by production from units currently under construction In the annexes, it is clarified that between 2018 and 2035, approximately 16.7 GW of centralised coal-fired power generation is expected to be phased out of the system At the same time, by 2020, 2.5GW new coal capacity is expected to be built and by 2035 3.4GW Apart from the capacities currently under construction and the planned Ostrołęka C power plant, new coal-fired capacity can only be created in cogeneration Lignite capacity is expected to remain rather stable until 2030 Under PEP2040 coal will remain the dominant source of power supply, with around 60% of generation coming from coal and lignite in 2030, the coal coming from domestic sources The decrease of the share of generation from coal and lignite would mainly come from projected increase in consumption, as the generation would remain rather stable
The role of nuclear in the power balanceAround 2033 the first nuclear unit, with a capacity of about 1-1.5GW, will go into operation 2033-2039 Poland would build four more units with a total capacity of around 4-6GW, two more units would follow in 2041 and 2043, to reach max capacity 9GW
The role of renewable energy sources (RES) in the electricity balanceThe development of photovoltaics (solar) power, especially from 2022, and offshore wind farms (from 2025) will play a key role in this The maximum level of annual capacity growth in the system was set at 1 GW for photovoltaic sources and 1.2 GW for offshore wind farms from 2022 and 2025 respectively It was assumed that RES auctions would also be carried out in 2019 and 2020, which affects the development of RES until 2023 It was also assumed that, in accordance with the current legal status, no new onshore wind power plants would be built outside the RES auctions In the annexes, a decrease of onshore wind is predicted – from 6.4GW in 2018 to 6GW in 2030 and 2.1GW in 2035 RES in final energy consumption will reach around 21% in 2030, translating to about 27% in net electricity production Poland’s obligation for 2020 is 15% RES in final energy consumption, and Poland is at risk to miss it
The role of gas in the power balanceAccording to the draft PEP2040, gas would mainly be used as capacity for (frequency) regulation and reserve The annexes foresee the increase of gas-fired capacity to nearly 7GW in 2030 (see the table above)
Vija Pakalkaite is Analyst - EU Carbon & Power Markets at ICIS. She can be reached at Vija.Pakalkaite@icis.com
Ellie Chambers is Deputy Editor – European Daily Electricity Markets at ICIS. She can be reached at Ellie.Chambers@icis.com
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