Energypolicychoices ofPoland

MarekWąsińskiThePolishInstitute ofInternationalAffairs

Paris,27September 2016

Main Principles ofPolishEnergyPolicy

Energy independence

Stableandprice-efficient supply forindustry

Tackling energypoverty

Energyeffectiveness andadjustment toEUclimate policy

ResponsibleDevelopmentPlan

Inenergy

“tomodernizeenergysectorandtodiversifythesourcesofenergy”

sinequanonforcompetitivenessofPolishindustry,energyeffectiveness,reliability ofenergysupply

ResponsibleDevelopmentPlan

Goals innext 10years

Stability ofenergy supply

Decrease inconsumption ofprimary energy

Gradual andcost-effective increase inshare ofRESinenergy mix

Limitincrease ofenergy prices forhouseholds

ResponsibleDevelopmentPlan

Directions

Energyefficiency i.a.buildings,transfer,cogeneration(nuclear),distributedenergysources

Energysafety i.a.diversification ofenergy sources (RES,nuclear,shale gas),energy storage,new capacity

Modernization anddevelopmenti.a.new cross-borderlinks,smartgrid,gas hub,electromobility

Restructuring ofcoal industry i.a.increase inproductivity,cost-effectiveness,higher added value

E-mobilitypledges:

1millionelectroniccarsby2025

2.5billionPLN(about0.58billionEUR)sales ofElectronic buses

2billionPLN(0.46billion EUR) sales ofEnergyannually

E-mobilityresults

Tackling low emission (inbigcities cartraffic is causeof60%ofemissions)

Better energy safety (lower dependence onoil&gas)

Growth oftheindustry (investments inR&Dinthefieldofgreen energy)

Smartgridpotential (energy storage)

But…

50,5%

35,0%

2,0% 12,5%

Electricityproductionin2014,%

hardcoalbrowncoalgasRES

Source:Ministry ofEconomic Dev.

Modernization needs

59%ofenergy electricity machines (turbines)hasover 30years

16%has over 20years

80%oftransmission lines220kV and23%oflines400kV and38%oftransformers has over 30years

Losses ontransmission 8.2%;EU-average 5.7%

Source:Odyssee

Finalenergyintensity(atPPP)climate corrected in2014

Energyintensity 15%higher inPolandthan inGermany

Energydependency

97%ofoil is imported (fromtheEast)

72%ofgas isimported (53%ofwhich fromtheEast)

However,

GasterminalinŚwinoujściewasopened,capacitytoimportof1/3ofPolishgasconsumption

Firstimportofoil fromSnaudiArabia(withperspective ofimportfromIran ortheU.S.)

Energydependency

Energyunion waspresented asasolution

Overall EU-28imports fromRussia– 37.5%

NordStream2doesnotleadtodiversificationofsupply

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Gas prices forindustrial consumers in2015,EUR/KWh

Source:Eurostat

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Electricitypricesforindustrialconsumersin2015,EUR/KWh

2015S2 EUAverageSource:Eurostat

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Electricitypricesforindividualconsumers,2015,EUR/KWh

2015S2 EUaverageSource:Eurostat

Energypoverty inPolandin2013

According toaReportofFoundationforEco-Development:

Energycosts exceeded 10%ofthehousehold budgetof44%ofPoles

Inthecase of13%cap,33%ofPoles

Energypoverty wasproblemof17%ofPoles whencounted inLow Income HighCosts (LIHC)

Stability ofsupply

Short limits onenergy in2015

Problemofuncontrolled transmissions

Newinvestment needs

Capacity market mechanisms

But…

PolishTransmissionNetwork,30April 2015

Source:PSES.A.

But…

PolishTransmissionNetwork,Investmentsuntil 2025

Source:PSES.A.

But…

PolishTransmissionNetwork,After 2025

Source:PSES.A.

Nuclear?

Plans were forfirst reactor in2025

PolishTransmission Operatorpredicts firstreactor at2029-2030

Lackofclearplanshowtofinancetheproject.

77%

9%

8%

3% 2% 1%

PrimaryenergyproductionfromRESin2014,%

SolidbiofuelsLiquidbofuelswindbiogashydrogeothermalsolarother

Source:GUS

Climate policy

Support forParisAgreement– Polandwants allcountries tocontribute toemission reductions

Absorbing CO2 byforests

Coal-dependency andwish forenergy-independenceis declining thesupport forEuropean climate policy

Theproblemofbase-year

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GHGemission reductions,%,1988base year

Source:Eurostat

But…

Polandreduced 20%since 1990

And4%since 2005

Thechoice

PEP2050wasdeveloped in2014-2015

Assumption– annual growth ofdemand 1.1%until 2030

Threescenarios:

Sustainable (reference)

Nuclear

Gas&RES

30%

22%18%

14%

16%

Consumption ofprimary energy in2050,reference scenario,percent

hardcoalandbrowncoaloilandoilproducts

gas

nuclear

RES

Source:PolishEnergyPolicy2050

Source:PolishEnergyPolicy2050

30%

15%

55%

Consumptionofprimaryenergyin2050,gas&RESscenario,percent

hardcoalandbrowncoaloil

gas&RES

15%

10%

15%45%

15%

Consumptionofprimaryenergyin2050,nuclearpowerscenario,percent

hardcoalandbrowncoaloilandoilproducts

gas

nuclear

RES

Source:PolishEnergyPolicy2050

Thechoice

Newgovernment is developingnew policy

Two tendencies

Energyministry(independence basedoncoal)

Economic Dev.Ministry(dispersed energysources)

Threescenarios presented byInstytutJagielloński

June2016

Assumptions similar tothese ofPEP2050

Energymixshould reflect thePolish economic model

Dependence ongas,RESor nuclear means importingresources or/andknow-howandtechnologies

51%

23%

10%

0%

16%

COAL SCENARIO 2030

hardcoalbrowncoalgasnuclearRES

Source:instytutJagielloński

39%

26%

19%

0%

16%

GASSCENARIO2030

hardcoalbrowncoalgasnuclearRES

Source:instytutJagielloński

26%

20%

11%12%

31%

LOWEMISSIONSCENARIO2030

hardcoalbrowncoalgasnuclearRES

Source:instytutJagielloński

Summing up

Mostimportant forPolishgovernment are

Energyindependence

Reliabilityofenergysupply

TacklingEnergypoverty

Developmentoftechnologies supportingtheeconomy

Rising cost ofemissions

These factors will shape energy choices ofPolish governments

MarekWąsińskiThePolishInstitute ofInternationalAffairs

wasinski@pism.pl