
- Poland | 22 January 2019

What is driving TPA’s interest in the power sector in Poland?
TPA’s interest in the power sector in Poland is driven by several factors. Firstly, Poland has been the cheapest power producer in Europe for a long time, but the generation mix is outdated, with around 80% relying on coal. With the increase in CO2 emission prices and no signs of change in the foreseeable future, significant investments are needed to stay competitive. Secondly, there is a growing appetite among private investors to venture into renewable energy, which requires restructuring of the conventional power generation blocks. TPA Poland has experience in assisting power generators, distributors, and grid operators in navigating industry breakthroughs in the past, and believes that their competencies will be increasingly needed in addressing the challenges the sector is currently facing.
What is the vision for upgrading these “old-fashioned” capacities in the power sector? Are there any plans to upgrade their technology?
Until recently, Poland was in the process of upgrading old coal-based generation blocks, replacing them with modern technology still based on coal. However, this approach did not fully consider the increasing economic and political pressure for more radical reduction of CO2 emissions, nor the exponential pace of production efficiency among renewable technologies. As a result, there is a need for a shift in vision and strategy to embrace more sustainable and renewable sources of energy. Upgrading the technology of these old-fashioned capacities to align with modern environmental standards and take advantage of the efficiency gains of renewable technologies could be a crucial step in ensuring the competitiveness and sustainability of the power sector in Poland.
What has changed recently that prompts the plans to move forward with nuclear energy in Poland?
The decision to move forward with nuclear energy in Poland is a complex one that requires significant investments, long-term political vision, and committed foreign technology partners. In the past four years, there has been little progress in developing nuclear capacities in the country, and there are new challenges that have emerged. One of the challenges is the financial status of state-owned companies that are supposed to sponsor the project. These companies are not as financially sound as they used to be, raising questions about their ability to advance the nuclear energy project.
However, despite these challenges, pursuing nuclear energy is still considered a reasonable approach. Poland’s energy mix still heavily relies on coal, and it is not realistic to assume that the country can transition entirely to gas and renewables in the near future. Coal-fired generation will continue to be a significant part of Poland’s energy portfolio for decades to come. However, the sooner alternative baseload plants, such as nuclear energy, can replace parts of coal-fired generation, the better it will be for the country’s economy and climate goals.
What is the current situation of renewable energy development in Poland in terms of pace?
The pace of renewable energy development in Poland should ideally be faster, but there are some optimistic developments. One notable change is the government’s shift in views on offshore wind generation, with a green light now given to this sector. Two main offshore wind projects are in advanced stages of development, and several others are following suit. It is expected that at least 2 GW of offshore wind capacity will be operational in the next six to eight years. Additionally, since there are no political obstacles, it is anticipated that the required legislation to support renewable energy development will also fall into place soon.
Could you discuss the current state of onshore wind development in Poland, given the restrictions imposed by the 10H rule?
The 10H rule has created significant challenges for onshore wind development in Poland, with only a few remaining projects benefiting from the old regulations. While there are some projects expected to be auctioned in December 2019 and possibly in the next year’s tender, further development of onshore wind capacities will be difficult without abandoning the rule. The feed-in-premium system, which started in 2016, resulted in the first volume auctioned for larger onshore wind installations being slightly over 900 MW in 2018. In 2019, it is expected to reach approximately 2.5 GW, and some 300 MW in 2020. Despite the 6 GW already installed, Polish generation mix can easily live with at least 20 GW installed wind capacity on land, which will be desperately needed as one of the cheapest energy sources to maintain competitiveness in the economy.
What led to the implementation of the 10H rule, and why has it proven to be so problematic for the wind energy industry in Poland?
The 10H rule was implemented due to the “not in my backyard syndrome” (NIMBY), which refers to people’s opposition to wind turbines being built close to their homes. In Poland, the current energy policy and legislation have been influenced by this anti-wind energy hysteria, with the party in power taking advantage of the NIMBY effect and making a promise to conservative voters that wind turbines would no longer be built. This aversion to wind energy has been at the center of the country’s long-term power generation policy, and the 10H rule has made it difficult for onshore wind development to move forward. Although the feed-in-premium system has enabled some progress, it is clear that abandoning the 10H rule will be necessary for the sector to flourish.