Poland’s planned energy restructuring set to hasten coal demise

The €17.5 billion fund is designed to support the EU's most fossil fuel dependent regions, most of which rely on coal, in their transition to a low-carbon economy, while limiting the economic and social impacts. [EPA-EFE/Andrzej Grygiel POLAND OUT]

Poland could phase out coal as early as 2035 under a “business as usual scenario,” according to Greenpeace, which performed an analysis of the latest government plans to restructure the country’s virus-hit energy sector.

The Polish government is currently preparing a major restructuring of the country’s three state-controlled energy utilities.

“Our plan is creating from the three energy groups – Tauron, PGE and Enea – two entities. One would be coal (based) and the other non-coal. We are consulting on this with the European Commission,” deputy Prime Minister Jasek Sasin said earlier this month.

The government plan includes a restructuring of the country’s biggest coal producer PGG, and involves the closure of two mines, Reuters reported earlier this month. PGG has been hit by falling demand for coal, lower prices, and the rising number of coronavirus infections, which led to the temporary closure of some mines in June.

Sasin admitted that the restructuring plans were also precipitated by fast-changing policy developments, including an EU-wide target to reduce global warming emissions to net-zero by 2050.

“We are all surprised by the pace of climate policy changes … Today we need to reevaluate some comments due to what is happening around us,” Sasin said.

Under government plans, coal power plants would be placed under the authority of the National Energy Security Agency (NABE), with a view to closing them down by 2040. Until then, NABE would subsidise the plants’ operations under the so-called “early decommissioning mechanism”.

But Greenpeace argues that most of these power plants already have closure dates in place and that Poland could phase out coal by 2035 in a Business as Usual (BAU) scenario driven purely by economics.

“It is clear that without new lifelines and subsidies, coal is at a dead end even in Poland,” said Joanna Flisowska from Greenpeace Poland, which conducted an analysis of the government’s plans.

“Instead of distorting the reality and pretending that Poland could run on coal for a few more decades, the government should focus on accelerating the clean energy transition and speeding up coal phase-out by 2030 at the latest,” she said.

Once finalised, the restructuring plan for Poland’s energy sector will be submitted to the European Commission for approval under the EU’s state aid and competition rules.

[Edited by Zoran Radosavljevic]

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