Here you can read a summary of the online discussion from March 19th 2021 on the current debate over the review of the EU ETS. The full video is available here. Of primary concern for fossil-dependent lower income nations is the carbon price rising so high that it reduces available budget for investment in clean energy. If that happens there’s clearly a problem. The counter argument is that there are other funding mechanisms available, and more than one pathway for successful clean energy transitions. All agree that getting the regulations right is crucial. Taking part in the panel were: Adam Guibourge-Czetwertyński, Undersecretary of State, Polish Ministry of Climate and Environment; Beatriz Yordi, Director for European and International Carbon Markets, DG CLIMA; Wanda Buk, VP Regulatory Affairs for PGE Group (event sponsor); Dirk Forrister, President and CEO, International Emissions Trading Association; Philipp Ruf, Director for Energy Analytics, ICIS. It was moderated by Energy Post’s Matthew James. This summary was compiled by Sara Stefanini.
This is a condensed and written summary of the event. It includes the presentation slides and the Q&A at the end.
Adam Guibourgé-Czetwertyński — Undersecretary of State, POLISH MINISTRY OF CLIMATE AND ENVIRONMENT
Beatriz Yordi — Director for European and International Carbon Markets, DG CLIMA
Wanda Buk — Vice-President for Regulatory Affairs, PGE GROUP
Dirk Forrister — President and CEO, INTERNATIONAL EMISSIONS TRADING ASSOCIATION
Philipp Ruf — Director for Energy Analytics, ICIS
Matthew James (Moderator) — Managing Director, ENERGY POST
The highlights are a summary of the main points covered in the discussion.
The EU Emissions Trading System is at an inflection point, and its trajectory will in large part be determined by the European Commission’s package of legislative proposals in June. This will include measures for the ETS, renewable energy, energy efficiency and other areas, and aim to ensure the EU meets its new target to reduce emissions by 55% by 2030.
The power sector will continue to lead emissions reductions over the next decade, although the option to switch from coal to gas will fade as coal is phased out. This will instead drive investment in renewables and other zero-carbon sources as they reach cost parity and no longer rely on subsidies.
The decarbonisation challenge for EU member states, however, differs according to their starting point. Poland is starting in a tougher position, with a greater reliance on coal-fired power. It aims to build 40 GW of renewable capacity over the next 20 years. But, according to the government and power utility PGE, the EU’s high carbon prices suck away money that could otherwise go towards green investment. The European Commission argues Poland should direct more of its ETS revenues, and new Covid-19 recovery funding, towards green investment. The government and PGE counter that Poland faces a €93 billion gap in investment needed to meet the 55% emissions reduction target.
Price trends and forecasts
- The power sector will continue to reduce its emissions faster than industry – with an expected 40% drop between 2020-2030 for power and 9% for industry.
- The power sector’s flexibility is diminishing though, as coal phaseouts reduce the option to switch from coal to gas.
- The advantage of the EU ETS is that it gives a certain emissions reduction target and flexibility in how to get there.
- The power sector will come under increasing pressure because it will increasingly have to provide electricity to help the industrial sector decarbonise.
- Money going into the Modernisation Fund has increased as the carbon price has increased, and there are discussions about how much it should receive in the future.
- The EU will propose new legislation in June to help meet the new 55% emissions reduction target, which will include ETS reform.
- The new legislation could expand the ETS to transport and buildings, as well as create a monetary system for maritime emissions and extend to aviation.
- Fairness and solidarity should be an important part of the June package.
- The advantage of applying the ETS to transport and buildings is that it will send those sectors the same price signals that the energy sector receives, at a time when transport and buildings are electrifying.
- Taxonomy rules will make it harder for companies like PGE to attract investment despite its plans, because they will have to report carbon-intensive work from past years, PGE says.
- It will take time for the ETS to drive green investments. So far the power sector has used fuel-switching as the balance, but that option will become less available.
- Europe needs to install about 27 GW of renewable capacity per year to meet its targets, up from 15 GW now.
- The Polish government aims to build about 40 GW of zero-carbon energy capacity over the next 20 years.
- PGE aims to supply entirely zero-carbon energy by 2050. To get there, it plans to build 2.5 GW of offshore wind capacity, 3 GW of photovoltaic capacity, and another 1 GW or more of onshore wind by 2030.
- PGE spent around €1.8 billion on EU ETS allowances in 2020, which limited its ability for new sustainable and green investments.
- Increasing the emissions reduction target to 55% costs Poland €136 billion to implement, leaving an investment gap of €93 billion, according to PGE.
- Poland earned €2.5 billion in ETS revenues in 2018, half of which was invested in climate projects. That’s lower than the EU average expenditure on climate of 77%.
- Poland has good investment opportunities because its infrastructure is older.
- Poland has strong potential for carbon removal, including forests and farms, and should explore technology.
The role of investors
- Investors are pushing hard on companies in their portfolios to develop net zero plans.
- Financial actors create liquidity in the ETS.
- Financial actors are often the front-runners, anticipating the change. They give the compliance sector a signal that change is coming.
- They are speculating about what change is coming and taking on the risk.
Panel discussion opening remarks
This is a summary, not a verbatim transcript, of the key points made during the online panel event.
Director for Energy Analytics, ICIS
How do we expect the next 10 years to work out? The dynamic between the power and industry sectors is changing. In 2008, roughly 60% of ETS emissions were from power, 40% from industry. This moved down to roughly 50/50 in 2020 and we expect this trend to continue until roughly 38-40% of ETS emissions come from the power sector in 2030, and roughly 62% from industry.
We expect the power sector to continue to reduce its emissions, by roughly 40% again between 2020 and 2030, while the industry sector will only reduce its emissions by 9%. We expect it to be relatively flat from 2020 to 2025 followed by a steeper decline from 2026 to 2030.
The power sector is in the spotlight. The blue bars on the slide show the possibilities for power emissions from a zero carbon price – upper level of emissions – to €120 – the lower level. That’s across Europe.
In 2020, we are in the middle of this dynamic power sector, in the middle of fuel switching. We could do more with a higher carbon price or less with a lower one.
There are two main points on this slide. First, the flexibility of the power sector diminishes drastically between 2021 and 2030, which has a lot to do with coal phaseouts all over Europe – the maximum emissions possible tend down even with a zero carbon price, because there is not that much capacity available anymore.
But also, the lower end of emissions goes down because of increased renewables, so overall the dynamics go down. We are squeezing the flexibility in the power sector, which means there is less of a reaction on the power side to higher carbon prices, which means the industry sector will have to react more.
This 39% reduction in power emissions comes alongside a 76% increase in CO2 prices, so there is a direct link.
We can see a massive decline in prices when Covid hit in March 2020, from roughly €25 to €15. Then it gradually rose back to €30 during recovery discussions in Europe, then we saw a massive bull run with all the vaccines becoming available at the end of 2020, and discussions and decisions on a higher emissions reduction target.
Then, in 2021, we had virtually no supply coming to market and we saw prices doing more or less nothing – moving horizontally. When new auctions came we had a massive upswing, from roughly €32 to €42-43, although supply suddenly came to the market.
Why we believe this happened – especially in 2021, we see a very close correlation between the position held by the financial industry and the EUA price. On 2nd February there was an article in the FT about carbon prices going up to €100 relatively quickly, and this is when the price started to spring up again, the financial industry started to build a stronger position. So there is this new player in the market outside the compliance sector.
Where do we expect prices to go? Unfortunately it depends, it’s not that easy at the moment to forecast carbon prices because there is this massive speculative element. But, given the ambition we have in terms of CO2 emissions, we see a couple of scenarios.
The red line is the most bearish, it assumes a bit of an economic crisis following the Covid crisis, which means carbon prices tend down. The grey line follows current legislation, which means we stick with the 40% target, we don’t do anything to the MSR – that is going up over the next couple of years but then we see it tending down over the second half of TP4. Then we have a high speculation scenario, the purple line, which ramps up quickly now to over €50, followed by a very quick rebasing system to set the cap at a lower level, which means we could see a price of around €70 around TP4. There are more scenarios out there.
Director, European and International Carbon Markets DG CLIMA
We are proposing new legislation in June, which will introduce changes to adapt to the 55% target, and part of this is with the ETS. The ETS is the world’s largest commodity market in environment – we have 1 billion trades per day. The ETS is working, we see decarbonisation.
The European Commission believes it is not up to carbon pricing alone, we need other regulatory measures. We need member state efforts, we need renewable policies, energy efficiency, effort-sharing regulations, etc., together with the ETS. We are now aiming for a 62% reduction from the ETS. To reinforce this we are proposing an enlargement to buildings and transport. Shall we put a European carbon price on the table that enhances decarbonisation from buildings and transport?
Maritime is already part of the ETS, but it’s only a monetary system, we do not have a decarbonisation instrument. And we’re looking at aviation and how we keep our commitment to CORSIA through the ETS.
This legislative proposal will include an important element – the distribution and solidarity mechanism between member states and inside member states: how an extension to buildings and transport affects citizens, how we give the right signals, which types of instruments we put on the table to cope with energy poverty and other possible problems. Fairness and solidarity will be an important part of the package.
Undersecretary of State, POLISH MINISTRY OF CLIMATE AND ENVIRONMENT
The Polish government has adopted a clear path for the transformation of the energy sector. We are looking at building about 40 GW of zero-carbon energy sources over the next 20 years, comparable to the system today. It will bring down emissions in the Polish energy mix significantly.
In setting this, we analysed the costs of different pathways. One element that has some impact on the results is whether your modelling reflects the possibility of making investments in time and the time it takes to build renewables, energy storage capacity, nuclear – all the parts of this new system. That limits what you can do.
We found in our modelling that the carbon price has an impact on how many emitting sources of energy are burnt in the time it takes to develop new energy, or whether you build new ones. If the price is too high, it’s not worth even building new blocks because you will never be able to use them.
Our national energy path follows what we consider to be reasonable, realistic and cheaper. It is going to be challenging and costly, but we think it is possible in the timeframe we’ve given.
President and CEO, INTERNATIONAL EMISSIONS TRADING ASSOCIATION
IETA is a business association, my members are about 150 companies involved in emissions markets in the EU, China, Korea, California, Quebec, etc.
The attraction of the policy model Europe has shown is one that gives an assured environmental outcome but gives flexibility. By having clarity on the emissions requirement, it focuses the mind and enables participants in the system to get there together at a lower cost. Yes you’ll see the market price fluctuate over time but it sends a signal that you know where you’re going.
What has changed in recent years is the focus on net zero. Poland is part of the quest for net zero, as all members of the EU are. It’s starting to affect companies, and it’s not just driven by policymakers. The investment community is pushing hard on companies they are invested in to develop net zero plans. In the US, I’m surrounded by power companies that have commitments to net zero even though there is not a law requiring it yet. And they’re under pressure to demonstrate how they are going to achieve that goal. This has been a fundamental change.
I’m curious to see how the EU begins to embrace the removal side of things. What does the ‘net’ in net zero mean? It means you can tap into reductions that are available in Europe’s forests or agriculture, and those sectors are going to be important service providers for removals in the future. Engineered solutions are also going to be important. We can get there at lower prices as you bring in removal technologies.
In terms of the expansion of the ETS, there are examples out there of bringing transport into the system, such as California and Quebec. Energy companies are going to be under pressure to electrify more and more, both for industry and personal transport. There is value to applying the pricing signals to both at the same time so that entrepreneurs and smart business guys will see and adapt to the signals.
As Europe deepens its targets it’s inevitably going to have to look over its shoulder at what its peers are doing. China – that will be a dramatic development. The US – we’ll see what the Biden administration brings to the table, expected in April. For Europe’s competitiveness agenda it needs to have two prongs: the stick – border adjustments, alongside the carrot – connectivity with countries that develop good systems. We’re a big supporter of links with other carbon markets.
Vice-President, Regulatory Affairs, PGE GROUP
By 2050 PGE will provide to its customers with 100% green energy. To achieve this we intend to build 2.5 GW of offshore wind farm capacity, 3 GW of photovoltaic, and expand onshore wind by at least 1 GW by 2030.
We plan to transition from coal to gas, using gas as a transition fuel. PGE is the biggest energy company in Poland and our plan requires almost €17 billion in capital. We aim to provide renewables and energy storage facilities for end users in the long-term.
Nevertheless, we still need to cover our operational and carbon costs. Last year we spent about €1.8 billion on EU ETS allowances. That translates directly to limiting our capability for new sustainable and green investments. Even in light of this operational cost we cannot simply shut down our conventional plants because of security of supply. So we cannot commit to making more green investments just because the prices rise to about €40/tonne.
Increasing CO2 prices will not speed up our green investment agenda. On the contrary, even though the current carbon price has led to lower energy demand, we still observe higher electricity prices due to the need to surrender CO2 allowances. No matter what the European Commission says, the existing EU finance mechanisms are insufficient to ensure a faster implementation of the new emissions reduction target and a just transition in coal-reliant regions.
Increasing the emissions reduction target to 55% costs Poland €136 billion to implement. The necessary investment gap was identified to be €93 billion.
We need to look at other funding sources, such as using the EU ETS to finance the energy transition in Poland. In line with the taxonomy rules, we will have to report our share of environmentally sustainable activities in our turnover – which due to decisions from past years are still highly carbon-intensive. That will make investors more cautious, even though our new agenda shows a clear transition plan. The increased level of ambition should go hand in hand with an increase in the Modernisation Fund.
Matthew James (Moderator)
Managing Director, ENERGY POST
To Adam – we’ve heard from Wanda that the taxonomy and ETS rules make it harder for companies to invest green. How does it affect the energy sector overall in Poland?
AGC: The impact of the ETS on new investment in Poland has been quite limited. There have not been enough new installations for us to be in a position to turn off polluting plants tomorrow. We’ve seen a tremendous increase in renewables, for instance in photovoltaics in houses, but that was largely due to investments by households supported by the Polish government, not EU money.
The big-scale investments we need to see in terms of energy production and storage are not yet at the levels that would put us in a position to safely reduce polluting plants.
Some people may think that since PGE is paying the €1.8 billion to the government, it can then put the money into green investment. But that’s not the case today. Today the resources that are generated from installations in Poland are not only going to be used to fund the transition in Poland but also in Sweden – which is a paradox given that the Swedish energy mix has much less far to go than the Polish.
We’ve seen in the past that the price signal has not been enough to generate investments. We need to influence both the investments we don’t want to see and those we do.
PR: It will take time for these investments. So far the ETS has been able to balance based on the existing flexibility in the power market, because we have been able to fuel-switch. This will be gone in the future, we will need investments in the power sector as well as industry, because industry doesn’t have as much short-term flexibility.
We see this, for example, in Spain and Italy where we don’t talk as much about subsidies for renewable energy investments. This will happen in other countries too – companies will be able to make an investment based on the money we get back for the power.
That’s why it’s important for sectors to get ready now – because industrial abatement and renewables take three, four, five years to build. It’s important we lift prices now in advance of a fundamental decline in available allowances now.
BY: We are working very close with China – carbon neutrality, decarbonisation and an end to coal exports are on the table, from Europe’s side.
It is undeniable that the carbon price is leading decarbonisation, it’s making coal use more expensive. But there are many opportunities, not just from the ETS. Poland in 2018 had €2.5 billion in revenues, half of it was invested in climate projects, but the EU average expenditure on climate is 77%. So there is an invitation there to spend more of the revenues on climate action.
Europe has made another historic decision to inject funds and loans into the economic recovery, so this is another invitation to Poland to use the loans to raise its climate and energy investment.
MJ: For Wanda – PG Baltica, a subsidiary, has invested in wind technology and plans to do more. Are you saying that under certain conditions those plans couldn’t go ahead, due to a lack of funding ability?
WB: It has been stated that the EU ETS works. Maybe it worked in the past, but how will it work in the future? First thing we need to cover is our carbon cost, then we can invest in renewables. We can’t increase our debt.
We are not only afraid, we know that if the price of CO2 emissions rise we will not be able to speed up our investment plans. There is almost €4 billion in the Just Transition Fund, but we know PGE doesn’t have access to this fund because it’s not dedicated to the energy sector.
This is the right time to think about how to create regulation in the future, because the EU ETS cannot look like it did in the past.
MJ: Dirk – this is a Catch-22. You have to have sympathy with what Wanda is saying, no?
DF: We all have different starting points, and the starting point for Poland has always been challenging. In the system overall, when you’re looking at a net zero pathway across Europe there is a good opportunity for investment in Poland because the infrastructure is older.
The price levels in Europe now are running past the simple coal-to-gas switching possibilities of the past, renewables are coming to cost parity in many parts of Europe. The next phase of activity will be to decarbonise the industrial sector, which has been getting free carbon permits. All of a sudden it looks like those low-cost abatement opportunities may be in Europe, although not necessarily in power.
It does put pressure on the power sector, because increasingly it will have to provide electricity to the industrial sector as it electrifies. But that’s what the system is supposed to do, squeeze out carbon and find the lowest cost abatement opportunities.
The removals potential in Poland is also significant, whether it’s forests or farms, and we need to explore technological solutions.
The longer it takes a region to decarbonise, the more it puts them on the buy side. There is potential to get ahead so you’re in a position to be a seller. By 2050 Europe as a whole could be a seller on the global system because it started early, but it depends on removals too.
MJ: Dirk – the Modernisation Fund receives 2% of the value of the market. Can you explain how an increasing carbon price presents more opportunities there?
DF: There is a decision coming up about how much money goes into the Modernisation Fund going forward. This gives a pathway for attracting investment for early retirement, conversion or upgrade. We would like to see it moving towards engineered removals. Three or four years ago we were looking at €5 per tonne, now it’s €43, and part of that goes to the Modernisation Fund.
BY: The Modernisation Fund was a solidarity mechanism that emerged from ETS discussions, and it goes to the 10 poorest member states. There is also 10% of the auctioning, which is distributed to the 16 poorest member states. If I was PGE I would go broader to the larger pot of money.
We have 15 GW of renewable capacity installed every year in Europe, we need about 27 GW, and the question is what will Poland do? There is a clear alignment for decarbonisation opportunities – and I’m talking about trillions in European funds.
MJ: It’s about how fast the progress is and how to manage the realities of finding finance.
Questions from the audience.
Qasam Sultan, National Grid: Given the limited flexibility from the power sector to rising CO2 prices, does ICIS expect the rising CO2 prices to directly lift power prices?
PR: Directly is a tough one – it depends on the power market. Yes, power prices will go directly into the costs for certain plants, so if it’s a fossil fuel plant which is on the margins and which sets the price, it goes directly onto the market. Overall, higher carbon prices for fossil fuel-intensive plants means higher power prices too.
Julian Schorpp, German Chambers of Commerce: On the increasing activity of financial actors – how do you judge the trend and what are the main risks?
BY: The ETS is an open market, it has a healthy level of liquidity and is giving the correct market signals. For the last two years, the ETS falls under stricter MiFID rules – for market abuse, oversight and transparency.
PR: The ETS needs the financial actors, it’s necessary to create liquidity. From my perspective, as long as prices are still linked to the fundamental need, all the science tells us prices need to be higher, then financial actors are front-running or anticipating future changes. It gives the compliance sector signs of future change – a sign to start making changes and investment.
Yes it is speculation but these companies just anticipate what will happen and take the risk for it.
Michiel Van Dessel, ExxonMobil: As most of us recognise, there is a need for industry to invest in things like CCS and low-carbon hydrogen – technologies that you cannot turn on and off, cost billions in investment and need years to develop. The innovation brings something to the table but cannot be the answer, given its size. How do you see the tension? How does the Commission plan to incentivise the development of those technologies?
DF: I recognise the long-term importance of having nature-based removals that I think are possible across Europe. They don’t happen overnight, they need to be cultivated. In California, when the programme was set up to include transport fuels, it was important to have this shock absorber – nature offsets. In the California system it has not driven investments in farming yet, but in forestry it has created new financial flows for forests that were at risk.
That’s one way to think about it – when the system is expanded, create a pathway for removal offsets to play a role.
Dariusz Dybka, European Roundtable of Climate Change and Sustainable Transition: We hear the June package will introduce 12 or 13 legislative tools. How can the ETS work with those, including the border adjustment mechanism?
BY: On the interaction with other policies, our new package will represent a coherent approach. This is a must. We have just approved the regulation on benchmarks for stage four, and there will be a liquid see-saw – if we increase the carbon border adjustment, we will have a proportional reduction on free allocations. It needs to be WTO-compliant.
MJ: Final thoughts?
AGC: This discussion shows there are a number of things that the Commission can improve in the functioning of our climate policy to ensure we do reach our targets. That should be our aim, to make sure the tools we have encourage reductions in all sectors, not just those covered by the ETS. We need to ensure the system enables us to finance the transition and make sure investments actually happen and resources that are generated by the ETS in Poland can be used for Poland’s transformation of the energy system.
We also need to bear in mind when we design these systems that this will have tremendous social impacts and we must not create an instrument that imposes an extra burden on the poorest households.
WB: There are some member states that are not willing to share with us the burden of the transformation, but what we are calling for is solidarity. We should remember that we have different starting points. Poland has made a huge effort in the last year, we are decarbonising even faster than Germany, and it should be acknowledged.
We cannot forget that the transformation is not going to be done overnight. Right now, Polish companies buy more EU ETS allowances than what they receive, and this imbalance will grow throughout the fourth trading period. The only thing we’re calling for is to acknowledge the different situation.
BY: I want to extend a personal invitation to Wanda and Adam to introduce geothermal heat pumps in homes in Poland. The Green Deal has changed society and changed the economy. Change, opportunity and solidarity.
PR: We’ve all delayed our holiday from June, we’re all looking forward to digging into that policy.
DF: In the Paris Agreement, when we saw that concept of net zero and the temperature target, it was a moment to think about when the chickens will come home to roost. The ETS has come a long way, but it can do a lot more in deepening and broadening, involving other sectors gradually and increasingly showing the connectivity to the removal side and ultimately international connectivity.
Q&A submitted and answered after the event
These answers were provided by PGE GROUP.
Joanna Flisowska, Greenpeace: How is PGE is planning to achieve carbon neutrality without a plan for phasing out coal? When will PGE will phase out coal?
PGE: Even not taking into account coal spin-off, lignite deposits in Poland are to end by 2040. And the development of new deposits would be unprofitable under current regulatory and market conditions.
Along the way, PGE will develop net zero-emission gas sources, which are necessary to support the development of RES and transform the district heating.
- PGE’s new strategy is our future-proof response in the light of EU commitments to achieve climate neutrality by 2050. By 2050 PGE will provide its customers with 100% of green energy.
- To achieve this PGE Group intends to build 2.5 GW of new capacities in offshore wind farms, 3 GW in photovoltaics and expand the portfolio of onshore wind farms by at least 1 GW by 2030. One of the key issues for PGE is the transition from coal to gas in district heating cogeneration plants using also natural gas as a transitional fuel.
We have prepared a comprehensive investment plan to switch to gas fuel in the heating sector – with a capacity of 1,000 MWe. Thanks to the planned modernisations and development of the distribution network, we will create opportunities for the development of RES and prosumer energy.
In 2020 we increased the installed wind capacity by over 20% and currently with this technology we have 700 MW of capacity. We have close to 150 MW in frozen wind projects, in very good locations.
In line with our previous statements – in our opinion all hard coal and lignite power assets should be transferred to the new state-owned entity, which should play a key role in the coordinated coal phase-out. Decision on the coal phase-out of certain assets should be made only after thorough discussions with social partners and economic considerations taking into account not only the entire power system but also the need to ensure just transition for particular regions and communities. This is why this discussion should involve a much more broad audience in Poland than one company only.
Joanna Flisowska, Greenpeace: PGE says it wants to extend the operation of the Turow lignite coal plant to 2044. How is it compatible with the carbon neutrality target?
PGE: The operation of the Turów lignite plant is expected to be continued beyond 2040 but the area of factual exploitation will not be extended. After 2044, in accordance with the European Union’s Green Deal Policy, the site of the Turów energy complex will undergo re-cultivation.
Coal spin-off within all Polish power companies may be carried out soon, which means that our portfolio could become green sooner.
We have prepared the Group for transformation and we are waiting for ownership decisions regarding the future of conventional assets.
Today, the energy sector in Poland faces two main challenges – investments in Polish renewable sources are necessary, but we also need to have stable energy sources until the construction of a nuclear power plant in Poland.
This can be ensured by a strategic carbon reserve. These two goals are impossible to achieve in one entity. It is necessary to create a strategic coal reserve managed by the State Treasury and parallel investments by energy companies in Polish renewable energy sources.
The transformation of the Turów lignite power plant and mine will be an enormous economic challenge as 60-80 thousand jobs rely on their operation currently. This is why the region will require access to the Just Transition Fund and other EU financing to get beyond the energy transformation challenges successfully in the next couple of decades.
Joanna Flisowska, Greenpeace: Why is PGE is still pursuing a new lignite coal mine, Zloczew? How is it compatible with the energy transition?
PGE: PGE has already declared this investment to be economically unjustified.
The Złoczew deposit will remain in the energy reserve for Poland, which means that it probably won’t be used as the primary source of energy in the foreseeable time perspective.
In the present economic situation the construction of a new open pit mine would be unprofitable.
If there are technologies in the future that will capture CO2, the issue of constructing a mine in Złoczew remains an open question. But today there are no such technologies and the construction of a new mine there at the moment would be to the detriment of the company. And we cannot go in this direction.
Joanna Flisowska, Greenpeace: How much money will PGE’s coal plants receive from the capacity market (funded from the taxpayers pockets) within next 15 years?
PGE: We will receive approximately €6bn until 2035. This is a small amount in comparison with other RES-dedicated schemes, and most of the payments will be ceased after 1 July 2025. These funds are linked to the conventional coal power plants and together with them they would be eventually transferred to a new state-owned entity, which should play a key role in the coordinated coal phase-out.
To compare it with our involvement in the Polish energy transition our investment portfolio covering low and zero-emission sources until 2030 is approximately €17bn.
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