Renewable energy is a great deal for Poland

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network.

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The last years brought Poland a major regulatory push to wind and solar energy, with the goal of significantly reducing the use of coal and increasing renewable sources share in the energy mix. Polish energy sector companies are fully on board with the green transformation, which fuels more and more economically and environmentally beneficial investment opportunities.

Offshore wind projects in the Polish zone of the Baltic Sea, which will be implemented by the PKEE members, will play a major role in the ambitious transformation of the energy sector towards low and zero emissions. The development of offshore wind projects will also play a part in the recovery of the economy after the COVID-19 pandemic, by boosting investment not only in the energy sector but also in shipbuilding and other related Polish industries.

According to the Polish Energy Policy until 2040 (PEP2040), a total installed offshore wind capacities will reach 11 GW by 2040, topped with PVs and onshore wind projects of at least 10 and 16 GW by 2040 respectively.

There is no doubt that renewable electricity should be considered as the main driver for the decarbonisation of the EU economy by electrification of possibly all end-use sectors. We see also room for renewable and low-carbon gases for the purpose of complementing the decarbonisation of hard-to-abate sectors. Given combined efforts, the Polish energy sector has the potential to replace coal with renewables. To make all necessary actions possible, we need to add two numbers to the equation.

Make ends meet

Financial stability is the first one. The entire Polish offshore program itself will cost around EUR 22.5 billion by 2040. According to PEP2040 costs of transformation of the energy sector will reach around EUR 200 billion.

Renewable energy sources development in the most vulnerable Member States should be additionally fostered via EU ETS-based instruments like Modernisation Fund and Innovation Fund, which should be increased proportionally to the new climate commitments. Those additional resources should be dedicated solely to the energy mix transformation to directly support decarbonisation, also in the field of large-scale investments. At the same time, allocating a higher share of the EU ETS-based auctioning revenues to support energy transition would help to bridge an enormous investment gap for countries with different starting points.

To fuel the development of cross-border investment projects across the EU, such as the joint projects between the Member States, defining criteria should also cover more up-to-date solutions, like carrying out investments in form of joint ventures or international and regional consortia, since currently, this is the most common way for developing offshore wind projects.

We cannot forget that to effectively integrate renewables, investments in the deployment of electricity distribution grids are of utmost importance since the majority of renewables are connected directly to them. And about a necessary backup for balancing renewables and maintaining the security of supply, which in Polish case in the upcoming years can only be assured by natural gas. We are looking forward to the new delegated act supplementing the taxonomy with criteria for natural gas. The list of environmentally sustainable investments should cover all types of economic activities, including energy and heat generation from natural gas. The use of natural gas, as the transitional fuel replacing solid fossil fuels, can significantly reduce the negative impact of the energy sector on the environment, especially given that the lock-in effect can be avoided by making installations ready for zero-emission gases, like hydrogen.

Uphill battle

The second additional number in the equation is the level of ambition which must be properly balanced to reflect burdens Member States are facing and to expand the use of renewables in a sustainable manner. The upcoming revision of the Renewable Energy Directive and other acts covered by the Fit for 55 package may bring changes that will put a small spoke in the wheel of the rapidly transforming Polish energy sector.

One of the concerns for Polish companies is the extension or tightening of sustainability criteria for the production of energy from biomass. Further limits on the type of feedstock to be used for energy production and expanding the sustainability criteria to include smaller installations may jeopardize the achievement of renewable targets. Speaking about targets, we have to bear in mind, that one of the considered options is to increase the current target relating to renewable energy in heating and cooling, at the same time making it binding, and in district heating and cooling.

This, accompanied with the possibility of amending the definition of ‘efficient district heating and cooling’ under the Energy Efficiency Directive framework to remove the possibility to satisfy the definition with natural gas high-efficiency cogeneration, may be a big burden for the development of centralised heating and cooling large-scale systems, which help meet urban energy needs, improve efficiency, reduce emissions and air pollutions and provide cost-effective temperature control. Poland has a very well-developed district heating system as approx. 40% of households are connected to them. Moreover, CHP plants may achieve efficiency levels of around 90%, reducing primary energy consumption and significantly contributing to the establishment of efficient heating and cooling systems providing clean district heat to numerous end users.

For the Polish district heating networks, the only feasible alternative is switching from coal to natural gas, since there are limited possibilities to significantly deploy renewables as e.g. biomass potential, maybe even more limited due to tightening the sustainability criteria. Also, the feasibility of mass deployment of green gases technologies in the 2030-perspective is highly questionable. The use of renewable energy and waste heat in district heating will not always be economically and technically justified since their potential is diversified across the EU.

The Polish energy sector may be green, just transition may be reality not theory. To achieve that we need some time, some financial and regulatory support and stable, gradual progress with a push enough to accelerate yet not to leave anyone behind. Because we all know that the Green Deal is a big deal for all of us.

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