Europe’s just energy transition

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Filip Grzegorczyk is Vice President of PKEE, and President of the management board of the Tauron Group. [PKEE]

The transformation of the Polish energy sector is one of the biggest challenges that Poland’s economy is facing right now. This is why the members of the Polish Electricity Association (PKEE) are, already today, commencing proactively several initiatives aimed at increasing the share of the renewable energy sources in their energy mixes, and at facilitating their connection to the grid.

Filip Grzegorczyk is Vice President of PKEE, and President of the management board of the Tauron Group.

However, this process is to take place on fair principles so that its costs will not burden the citizens. The European Commission, as a follow up of the long-term 2050 strategy, should propose a fair burden-sharing mechanism taking into account compensations for EU Member States with different starting points.

The members of the PKEE are following the global trends in renewable energy developments. Tauron, PGE, Energa and Enea are implementing multiple investments of key importance to energy supply security of Poland, and aimed at the gradual transition to low-emission sources. All this, to make green energy a relevant source of supply to the Polish grid. In May 2019, the Tauron Group announced the update of its strategic directions – the TAURON Green Turn. The document assumes that by 2025 investments will be completed in onshore wind farms (additional 900 MW), photovoltaic farms (additional 300 MW), and in development of offshore wind farms. These planned measures will allow increasing the share of low- and zero-emission sources in the TAURON’ energy mix to nearly 30 percent in 2025, and over 65 percent in 2030.

The key growth projects impacting the reduction of emissivity of the PGE include investments in the new gas-fired units, off-shore and on-shore wind farms, photovoltaics, energy storage facilities, and electromobility. The company has 14 wind farms, 29 hydroelectric power plants, 4 peeking pumped-storage plants and one photovoltaic farm. The total installed capacity of all facilities is 2188.9 MW.

Meanwhile, the Energa Group at present generates over 1/3 of its electricity from  renewable sources. The corporation owns 46 hydroelectric power plants, 5 wind farms and 2 photovoltaic farms. The total capacity of these power plants has reached 444 MW. However, this is not the end of it – the company keeps expanding its wind installations, growing the photovoltaic projects and, in the long-term perspective, offshore wind farm projects.

The Enea Group is implementing similar measures too. At present, it owns 21 hydroelectric power plants, 3 wind farms and 2 biogas plants. Moreover, its power and combined heat and power plants use biomass as the energy-generating fuel.

Over the last ten years, Poland has increased its electricity generation from renewable energy sources (RES) fourfold, decreased the share of coal in its energy mix (from 95 percent to 77 percent), while at the same time cutting the greenhouse gas emissions level by nearly 30 percent compared to the Kyoto Protocol base year level. This has contributed to, among others, the improvement of the ratio of emissions levels to the gross domestic product. Additionally, the significant emissions reductions achieved in Poland in other sectors, numerous ecological and pro-environmental initiatives as well as such forms of activity as the adoption of the Katowice Rulebook implementing the Paris Agreement, during the COP24 in December 2018 – underline the huge commitment of Poland to the promotion of pro-climate initiatives.

The transformation in Poland, which started 30 years ago, was possible thanks to, among others, the huge social movement of Solidarność (Solidarity). A movement that stemmed from a desire for a change but also a fight for employment and social rights. Moreover, during the 24th United Nations Climate Change Conference (COP24), the summits’ Polish Presidency has made the ’Solidarity and Just Transition Declaration’ one of its key initiatives. Today, we are referring to this heritage when taking the floor in the discussion on the European Commission’s strategy ‘A Clean Planet for all – a European strategic long-term vision for a prosperous, modern, competitive and climate neutral economy’.

As the Polish Electricity Association – we fully agree with the idea of the EU policy assuming an innovative and low-emissions economy. However, we appeal for providing sustainable development conditions and social acceptance in its implementation. The realisation of the strategy, as foreseen by the European Commission, requires increasing the spending to 2.8 percent of the GDP of the European Union, meaning a sum of EUR 520 to 575 billion in expenses per year for the whole economy of the Community. It is worth noting, however, that in its document the Commission has not presented the costs of the transition to the individual Member States. This is beyond the doubt, that the cost will be significantly higher for some economies, and should be reflected in compensation mechanism.

In this context, it needs to be mentioned that coal continues to be an important fuel for the EU Member States and it is responsible for nearly a quarter of their electricity production. Coal is being produced in 41 regions of 12 EU Member States and – according to the Joint Research Centre report on ‘EU coal regions: opportunities and challenges ahead’-  in 2015, the entire EU coal sector and dependent sectors employed ca. 452 000 people.

Therefore, as PKEE we see a real need for developing a cost and benefit-sharing mechanism with respect to the realisation of EU’s low-emissions economy vision. We are pointing to the urgent need to create a precise map of burden-sharing and to materialise the dedicated solutions. The postulated mechanism could include as its part a new envelope in the European Union’s budget (i.e. Just Energy Transition Fund plus other new instruments) and the significantly increased Modernisation Fund, Innovation Fund and the solidarity pool in the EU Emissions Trading System (EU ETS). Equally important is the currently proceeded EU sustainable development taxonomy that should first and foremost take into account the transitional technologies on the way to achieving the 2050 low-emissions economy goal. This results from the fact that the transitional energy sources such as gas or nuclear energy constitute an important element of the energy transition.

These bridging solutions not only help with the diversification of the energy mixes of individual Member States but also allow the continued development of renewable energy sources and energy supply security. Therefore, in our opinion, also they should be provided with financial support.

We must remember that the matter of just transition to the implementation of the ambitious climate policy is of particular importance from the point of view of the citizens. Because if we will not have them on our side, we will fail. We cannot allow a situation when people in their daily lives are struggling with the declining economic prosperity that is bringing them down, because then – they will not favourably accept the intensified efforts needed for the expensive modernisation towards low emissions.

The need for a just and solidary transition and the ambitious climate policy are complementary goals. However, the bigger ambitions require ensuring the resources that will support this transition towards the low-emissions economy and ensure social acceptance for planned initiatives.

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