Energy transition in Poland | 2020 Edition

Last year's electricity production in domestic power plants was the lowest in five years and amounted to 164 TWh. At the same time, energy imports almost doubled to 10.6 TWh. The capacity installed in renewable sources is growing, at the end of 2019 it was 9.5 GW. The production of energy from renewable sources exceeded 25 TWh - and although it was the highest in history, it is still insufficient for Poland to meet the EU's obligations regarding the share of renewable energy in the energy mix. It is also worth noting that the development of RES in the last two years was mainly due to investments in prosumer installations.

- The changes in the energy sector are visible, but there are doubts whether they have been planned or are rather a surprise ¬- notes Dr Joanna Maćkowiak-Pandera, President of the Forum Energii. - Not so long ago, an increase in energy production in Poland was expected, and in the meantime we have seen a record decline. There are several reasons for this phenomenon, but the most important is the high costs of power generation in domestic power plants. If imports of energy did not continue, prices would be even higher and Poland would have problems with balancing demand. The most important question is what to do next. Polish power industry is on a verge," concludes Maćkowiak-Pandera.

Particular attention should be paid to the specific paradox of the domestic coal market. On the one hand, the share of coal in electricity production in 2019 was nearly 5 percentage points lower than the year before. The trend in decreasing hard coal exploitation in domestic mines, which has been visible for years, also continued  last year, decreasing by 2 million tons. On the other, however, the demand for thermal coal remains high. A large part of it, almost 20% of domestic consumption, is supplemented with imported coal. 10 million tons comes from Russia and the remaining 3 million tons from Colombia, the USA or Kazakhstan.

- So we have a situation where the Polish mining industry is not able to provide enough coal to meet demand. At the same time, some of the coal produced in Poland does not go to consumers anyway, but is stored on heaps, because domestic coal is more expensive and often of lower quality than imported coal - notes the President of Forum Energii.

The importance of gas in the Polish energy mix continues to grow. Its share in 2018 came close to 9%. Domestic production of this fuel is decreasing year by year, and the demand is mainly covered by imported gas. However, the progressive diversification of gas sources is clearly visible, mainly due to contracts for the purchase of liquefied gas. Imports from Russia are already less than half of the blue fuel supplies.

The big problem is stagnation in reducing greenhouse gas emissions. Emissions in Poland in 2018 remained at the level of 2017, exceeding 412 million tonnes of CO2 equivalent, and from power generation alone it was nearly 150 million tonnes.

Main conclusions from the report

• Electricity production is falling, with the biggest decrease being seen in production from lignite and hard coal. The share of coal in electricity production in 2019 was 73.6%, 4.8 percentage points less than in 2018.
• In 2019, the import of electricity to Poland almost doubled, amounting to 10.6 TWh.
• Last year, the largest amount of electricity from RES was produced - over 25 TWh. It is the highest in history. However, this result is still too low to meet EU obligations.
• The paradox of the domestic coal market: despite the constant high demand for this resource, its production in Polish mines is decreasing and at the same time its reserves on heaps are increasing.
• Diversification of gas supplies. Imports from Russia account for less than 50% of the blue fuel supplies to Poland.