Higher Carbon Prices May Drive Off-Coal Transition in Poland
Higher carbon prices appear to be pushing Poland into the early stages of a post-carbon transition, with state power company Polska Grupa Energetyczna (PGE) and Katowice-based Tauron Polska Energia, tagged by Bloomberg as Central Europe’s third-biggest polluter, both talking about shifting toward a cleaner electricity mix.
The European Union has recently seen carbon prices triple to about €20 per tonne, Montel News reports, and power consumers have been hit hard. But that isn’t the deciding factor for PGE, Strategy Director Monika Morawiecka told an event in Warsaw last week.
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“Even without the recent surge in carbon prices, renewables are becoming competitive compared to coal-fired plants,” she said.
But Tauron is responding more directly to the carbon price hike, with plans to add at least 700 megawatts of “clean, regulated power to ‘improve’ its portfolio,” Bloomberg reports. “That’s the equivalent of half a modern nuclear reactor and echoes moves by European utilities from (Italy’s) Enel SpA to (Scandinavia’s) Vattenfall AB to boost their clean power generation.”
“We’re turning in the direction of more renewable sources,” said CFO Marek Wadowski. “The rising cost of CO2 makes the profitability of coal-fired plants significantly less profitable.” Early contenders include a 200-megawatt wind farm purchase, 150 MW of solar, a 400-MW gas plant, and a longer-term investment in offshore wind.
“Coal and lignite provide over 80% of Poland’s electricity,” Montel News notes. But “last month former deputy-PM Janusz Steinhoff urged the government to fundamentally change the country’s energy mix,” while others call for construction of a nuclear plant to cut carbon costs. A director with Poland’s transmission system operator, Konrad Purchala, said it would be an “excellent idea” to achieve that goal with renewables, though he cautioned the country would still need back-up generation capacity.
In a recent paid placement with Politico Europe funded by the Polish Electricity Association, COP 24 President Michal Kurtyka says his country expects coal to decline to 60% of its electricity mix in 2030 and 50% in 2050.
“Growing demand will increasingly be met with sources other than conventional coal-fired power,” he writes. “The share of renewable energy in the Polish mix is increasing. It is driven not just by our pursuit of targets to reduce carbon emissions, but also because a significant share of existing power units are approaching the end of their lifespans.”
Kurtyka adds that the shift “also results from the need to diversify the energy mix, and from technological developments. We want to make sure that in the future, Poland is using proven new energy sources and modern solutions. That’s why there are high expectations for a technology breakthrough that will allow for energy storage, the stability of supply, and grid management in the emerging era of distributed energy systems.”