How is Poland progressing towards its clean energy goals, and what are the key reasons for falling behind the target set for 2020?

Poland has experienced strong growth in renewable energy since 2020, but is still falling short of the 15% target set with the EU in 2009, with renewable energy sources (RES) currently making up 11.13% of the energy mix. The problem is that coal has been protected and not enough efforts have been made to develop RES. State-owned utilities are still heavily reliant on coal, which makes up almost 80% of their market share. If the 2020 goal is not met, costly statistical transfers will become obligatory.

What can Poland rely on to increase its share of clean energy?

Wind power is still growing in Poland, with over 2 GW auctioned in December 2019 and further auctions planned for 2020. However, the distance rule implemented in 2016 has slowed down new wind energy development. Solar energy is also developing nicely, but only small scale solar until 1 MW has been awarded at auctions so far. Offshore wind farms are expected to start production in 2028, with 13 projects considered in total, and an ambition to generate 25% of Poland’s energy by 2040. The capacity market, which establishes a price for backup power through auctions, has been expensive with yearly costs of 5.5 billion zloty and has mainly awarded state-owned utilities.

What consequences can be expected if Poland does not meet the 2020 clean energy target, and how does Poland plan to back up its energy system?

If the 2020 target is not met, there will be a chance to try again in 2021. After that, costly statistical transfers will become obligatory. The capacity market auctions have resulted in investment decisions for a 1 GW coal power plant and a 1.4 GW CCGT plant, but doubts remain about the awarded coal power plant being constructed. As of this year, coal can no longer participate in capacity market auctions, and the awarded plants will exit the mechanism completely by 2034.

Could you share your views on the feasibility of nuclear energy in Poland’s energy mix?

Considering the challenges related to infrastructure, financing, and timing to replace decommissioned coal power plants, I strongly doubt that third-generation nuclear energy will become part of Poland’s energy mix. It is unlikely to start from scratch with nuclear power, especially in a democratic country like Poland.

How do you expect the COVID-19 outbreak to affect the energy sector in the short term? Has your business taken any measures to manage the crisis?

Due to sunny and less windy weather, Poland’s power mix has not changed much despite decreasing wholesale prices, which went from PLN 210/MWh in February to PLN 150/MWh in April. As 75% of electricity in Poland is still produced by coal power plants, the low production of solar energy capacity did not make a significant impact. Our organization is keeping our clients informed about the special measures implemented by the Polish government, but the RES projects are positively impacted, as projects awarded at 2018 and 2019 RES auctions have granted an additional 12 months to connect to the grid and enter into the support system.

Do you have any other thoughts on this topic that you would like to share?

We are confident that the European Green Deal will continue to stay on track, and Poland will be among the first countries to adopt green technology and prosumer solutions on a significant scale.