Poland’s top priority in coal transition – EURACTIV.com
Turów Coal Mine and Power Plant Complex “Strategic in Ensuring Poland’s Energy Security,” Says PGE, State-Owned Company at Center of Dispute with Czech Republic over Expansion of Operations mining in this country.
In a rare move for an EU country, the Czech Republic took Poland to the European Court of Justice last February to expand its mining operations at an open-pit coal mine near Turów, a Polish village just the other side of the border.
Environmentalists who backed the case have warned that Czechs are losing access to clean water because of coal mining there.
European judges are currently examining the complaint and could order the temporary closure of the mine.
With a decision expected soon, Poland fears that its electricity supplies are threatened.
The Turów mine and power plant are responsible for around 5% of the national energy production, providing electricity to around 2.3 million homes, according to PGE.
A potential shutdown “would obviously upset the Polish energy system, which will not be able to replace decommissioned generation capacity quickly,” PGE told EURACTIV in email comments.
But analysts believe more risk looms on the horizon. Coal-fired power generation has declined steadily across Europe over the years as power plants come under increasing pressure from rising CO2 prices in the EU carbon market.
A recent report by think tank Agora Energiewende found that most lignite units in Germany, Poland and the Czech Republic would become permanently unprofitable in the second half of the 2020s.
With the price of CO2 hitting € 50 a tonne for the first time this week, analysts say the days of coal are numbered.
“Carbon pricing has been a killer for coal over the past two years,” said Georg Zachmann, analyst at the Bruegel economic think tank in Brussels. “And people expect it to last,” he added, saying it was causing the phase-out of coal in Europe to accelerate.
According to Zachmann, the constant rise in carbon prices means that “the market will potentially kill coal as early as this decade”.
Energy restructuring plan
While Poland last week approved an extension of Turów’s mining permit until 2044, activists warned against opening a new 496 MW power plant in Turów, which was due to begin operations on the 30th. April.
PGE claims the new unit will be a “state-of-the-art facility” to replace the three oldest and most polluting units, but campaigners say this is not enough, given the climate crisis and the the new expected increase in carbon. costs expected with Europe’s more stringent climate targets.
“All coal-fired electricity production in the EU must stop by 2030” in order to stay within the 2 ° C warming limit of the Paris Agreement, said Elif Gündüzyeli, an activist for the Climate Action Network (CAN) Europe.
“Extending coal mining activities until 2044 and adding a new lignite-fired power generation unit to start operating now, which must also be paid for by citizens, is scandalous,” she added. , claiming that coal-fired power generation is a “dying business”.
In Poland, however, the exit from coal is expected to take longer than in other EU member states.
The country still depends on coal for 70% of its electricity, the highest share among EU countries. And even though Warsaw has big plans for wind, solar, nuclear and gas, PGE says replacing all of its coal-fired units with clean electricity is a colossal undertaking that will take until 2050.
Energy security remains a major concern for Poland, which has sought to create a safety net for coal-fired power stations to remain a backup source of electricity during the transition. In April, the state asset ministry proposed a restructuring of the country’s energy sector by nationalizing coal units and using public money to keep them alive until they were finally taken offline. .
Under the plan, 70 units of lignite coal, which produced more than half of Poland’s electricity in 2020, will be purchased by the state and handed over to a single National Energy Security Agency (NABE) managed by the state.
“NABE will be a fully autonomous entity which will ensure, on the one hand, energy security and, on the other hand, a sustainable transformation” of the Polish electricity system, PGE said.
“It will only drive the investments and upgrades necessary to continuously maintain the efficiency of operating coal-fired units, not building new ones and phase out coal-fired units,” the company told EURACTIV in comments by email.
“ Bad bank ” for coal workers
The restructuring plan, which has not yet been finalized, will have to be approved by the European Commission in accordance with EU state aid rules.
But analysts believe the project is incompatible with the bloc’s climate goals and unlikely to be approved by EU competition regulators.
“The only way for him to get the green light from Brussels would be to set a coal exit date in the 2030s,” said Paweł Wiejski, EU climate policy researcher at the Green Economy Institute based in Warsaw.
Earlier this month, the Polish government signed a deal with unions to shut down the country’s last coal mine in 2049, just ahead of the EU’s deadline to achieve net zero emissions by 2050.
However, observers believe it may be too late and incompatible with the EU’s climate goals.
Indeed, the new National Energy Security Agency (NABE) is supposed to align with Poland’s updated energy policy presented earlier this year, which assumes very high shares of coal in the electricity mix by 2040, a said Paweł Czyżak, analyst in Warsaw. based on the Instrat think tank.
“These levels of coal production would compromise the climate targets of 55% GHG for the whole of the EU,” he said, adding that the plan “aims only to extend the financing of coal capacities in Poland with EU money ”.
Still, Czyżak said that the very fact that Poland decided to create a “bad bank” for coal assets is significant. “The government finally admits that this industry is a burden for the future of the Polish energy system,” he said.
To be fair, Poland is not alone in struggling with its coal exit plans. The Czech Republic, another major coal burner in Europe, has yet to decide on a coal phase-out date, with some in government pushing for a 2033 exit and others preferring a later date of 2038.
In Germany, meanwhile, the government painfully accepted 2038 as the coal exit date last year, a target that environmentalists say is too late and provides overly generous aid to coal companies during the transition.
In March, the European Commission opened an in-depth investigation into Germany’s coal phase-out plan, saying it doubted a € 4.35 billion compensation plan for German energy and mining companies .
For Zachmann de Bruegel, these various plans show that the coal phase-out strategies of Germany, Poland and the Czech Republic are “more of a lifeline for the coal industry than plans to speed up coal-mining.” elimination”.
[Edited by Zoran Radosavljevic]