Over the past twelve months Energy Post has provided readers with two well-attended panels (Modernisation Fund, Just Transition Fund), sponsored by PGE Poland, focussing on EU mechanisms and policies designed to support countries like Poland (plus other carbon-intensive and/or lower-gdp Member States) with their decarbonisation strategy. Today, Anna Zalewska MEP (ECRG and member of the ENVI committee of the European Parliament) makes use of the Energy Post platform to respond in her own words to some of the overriding questions concerning the unique challenges facing her country in the context of European 2050 ambitions and defends the controversial extension to the licence for mining activities at Turów…
What is Poland doing to decarbonise its energy mix and why is it so vigorously defending coal when the rest of Europe is already switching to renewables?
Poland is investing heavily in renewables. Today, there is already more wind in Poland, 5,8 GW of installed capacity, than in Denmark, 5,5 GW of installed capacity. Thanks to an ambitious solar power prosumer programme launched last summer over 100,000 applications have already been made and a similar number of applications is expected by the end of the year. The programme helped to bring the total installed capacity of solar power in Poland to 2,1 GW, 170% growth year-on-year, and this number is expected to grow further by the end of the year. This shows that Poland does intend to modernise its energy mix in line with its international commitments at the UNFCCC forum and climate objectives adopted unanimously at the European Council summit. However, if one considers increasing ambition for 2030, which had already been agreed on at the EU summit in 2014, we, as Poland and other EU Member States in similar positions, would therefore also have the right to expect solidarity from our European partners. We cannot drop coal completely from our energy mix from the current level of over 70% in just one decade. It is simply unrealistic from an economic and security of supply point of view. We need to be able to proceed at our own pace due to our unique historical circumstances.
But there are already existing mechanisms, like the Modernisation Fund, and new ones planned like JTF which help Poland financially to decarbonise and resolve problems of coal regions like Turów, so what is the problem?
The total investment needs in Poland’s power generation alone to reach carbon neutrality have been estimated at 179-206bn Euros. The current proposal from the European Commission on the European Climate Law, in the 55% CO2 reduction target for 2030 is estimated to increase the CO2 price to over of EUR 75 / t. In this scenario the total cost of purchasing allowances for Poland’s energy sector by 2030 is estimated at approximately EUR 68.5 billion. This means that, compared to the baseline scenario (current 40% emission reduction target by 2030), the purchase of emission allowances alone will create approximately EUR 30 billion of additional operating costs for Poland’s energy sector on top of the investment needs. In this way, instead of spending funds to build new low-carbon assets, energy companies will have to allocate their resources to settle their emissions allowances and maintain the operation of generating units, which due to Poland’s energy structure cannot be changed, let alone shut down, overnight.
Only by taking into account the aforementioned estimates can one more realistically assess the real value of the currently proposed compensation mechanisms for energy companies under the EU ETS such as the Modernisation Fund or the Just Transition Fund. In this scenario of higher CO2 prices, Poland’s envelope of the Modernisation Fund will amount to about EUR 6.7 billion, which means that in order to obtain full compensation only for the additional operational costs of an ambitious climate policy, it would need to be increased about five times over. The Just Transition Fund for Poland, which is dedicated to transition away from coal mining activities such as Turów is now expected to be 8 bn Euros. Given the enormous scale of challenges both funds are largely insufficient to truly ensure a just transition.
How can you claim that a coal mine like Turów is not violating EU legislation? Do you base your views on any facts or expertise which would show that emissions to water and air are respected?
Mines like Turów cannot be closed overnight due to energy security, economic and social reasons. The mine and power plant at Turów employ about 15 thousand people directly or indirectly and the power plant supplies electricity to over 3 million households. PGE applied for a 6-year extension of the existing mining licence set in a concession first granted in 1994 and it plans to carry out its mining activities on behalf of that territory. The environmental decision to extend the licence to continue extraction in the lignite mine in Turów was made by Poland in accordance with national and international law. All comments submitted by representatives of the public and state authorities of the affected parties – the Czech Republic and the Federal Republic of Germany – were taken into account when the Regional Director of Environmental Protection in Wrocław issued a decision on environmental conditions for the project entitled “Continuation of exploitation of the Turów lignite deposit”.
Additionally, the Polish delegation took “non-compulsory steps” to clarify any doubts held by the Czech delegation, such as organisation of additional meetings, which went beyond the standard procedural obligations under the ongoing environmental impact assessment procedure. Monitoring of the impact of mining activities on drinking water has been carried out for many years by Polish-Czech and Polish-German expert teams. Approximately 500 wells are monitored, and the results of the analyses generally indicate that there is no impact from mining activities on drinking water. After thirty years of scientific observations the Institute of Meteorology and Water Management – the State Research Institute concluded in its independent scientific study, that meteorological conditions of the region, which is particularly exposed to hydrological droughts, are the major cause of any impact on water resources at the Polish-Czech border, and not the Turów lignite mine operated by the company PGE. However, in order to protect the water source in Uhelna in Czechia, additional technical measures have been taken to reduce the mine’s impact on its surroundings. The water source in Uhelna will be fully protected in the future from the negative impact of mining activities in the Turów Mine.
How do Poland’s actions compare with other Member States who have decided to quit coal?
I think that Poland is too often on the spot without any consideration given to its different starting point so that others can go under the radar. At the same time in Germany, in 2019, RES accounted for approximately 40% of electricity production whereas coal and lignite were responsible for about 28%, gas for 15% and nuclear power for 12%. Generating such amounts of energy required 122 GW of RES installed capacity and over 20 billion euros a year supporting it. The capacity in hard coal and lignite is 44 GW, in gas – 30 GW and in nuclear power only 9.5 GW. In 2019 coal generated 70% of the total generated by RES energy at a capacity three times lower. It is worth noting that Germany now has more lignite capacity installed to maintain the Energiewende than it did 20 years ago.
Germany signed the agreement on the decommissioning of coal-fired power plants by 2038 but what this date will mean in practice and whether it will not be extended further in specific cases seems open. The Czech Republic also has a difficult relationship with coal. The Coal Commission is working hard to find the most suitable phase-out date – 2045 or 2050, 2038 and 2040, or even 2030-2035. However, still no decisions are taken yet, which proves how difficult it is.