Poland needs a power capacity market to help coal-fired power plants compete with producers of renewable energy and to avoid power shortages, the energy minister said on Wednesday (18 May).
Poland generates around 80% of its electricity from highly-polluting coal power plants, mainly operated by state-run power groups PGE, Tauron and Enea, which are coming under pressure from subsidised renewables such as wind power, reducing investment in new capacity.
“We have to call on the European Commission for a system of financing conventional generation. If we do not build around 7 gigawatts of new capacities in six years, then we will have to…regulate electricity consumption,” Tchorzewski said.
Poland imposed power consumption restrictions in August after soaring temperatures and low water levels in rivers used to cool coal-fired power plants threatened to overload the grid.
“There is no energy safety or stability of supplies without conventional power generation. We can improve on emissions, but conventional generation will always have to be there,” Krzysztof Tchorzewski told a conference.
Capacity markets under EU scrutiny
In a capacity market, producers are paid by the state to keep power plants online to generate electricity as and when needed.
Britain has introduced a capacity market for power producers while Germany relies on a mix of various reserve power schemes.
Capacity mechanisms can increase security of supply, but if badly designed they can distort competition, hinder electricity flows across borders and lead to consumers overpaying for electricity, the European Commission said in a report in April.
Polish power producers have also said cheaper electricity imports, including from the hydropower-dependent Nordic region via links to Sweden and Lithuania, were pushing coal-power plants out of the system.
“When we look today at a balance of exchange on the Lithuanian power link, we can see that it’s not favourable to Poland. The electricity is coming here and it causes some disturbances in the system,” Remigiusz Nowakowski, the head of Tauron, told the conference.
Lithuania and Poland put in place the first 500 MW capacity cross-border link last year.