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Poland proposes accelerated cut in coal generation market share to 2030


Coal share to fall from 75% to 56% max by 2030

Share to fall to 38% if carbon prices are high

Renewables' share in production to rise to 32%

  • Author
  • Adam Easton
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  • Jonathan Fox
  • Commodity
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  • Energy Transition

Poland is targeting reducing coal's share of electricity generation from around 75% today to between 37.5%-56% in 2030 and to 11%-28% in 2040, the Ministry of Climate said Sept. 8.

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The share of hard coal and lignite in power generation will depend on the evolution of CO2 prices in the next decade, the ministry said. Higher allowance prices would lead to deeper cuts in coal generation.

The targets are included in the latest version of the Polish Energy Policy to 2040 (PEP2040) and are more ambitious than those in the previous version released last November.

Coal's share in electricity generation in the previous version was forecast to fall to 56%-60% by 2030 and to 28% by 2040.

The latest version of the policy has completed its consultation phase and will now be sent to several governmental committees for their opinion. Once their approval has been obtained it will be adopted as policy following a green light from the cabinet.

The Ministry of Climate said the new targets took into account EU climate policy, technological changes and COVID-19.

The reduction of hard coal and lignite's share in electricity production will be replaced by capital investments totaling Zloty 280 billion ($74.3 billion) by 2040 to build the country's first offshore wind and nuclear plants.

Poland's energy policy will be based on three pillars. The first, entitled Just Transition, foresees the allocation of Zloty 60 billion ($15.94 billion) of EU funds by 2030 to support the transition of coal-dependent regions like Silesia. Energy poverty is to be reduced by 30% and 300,000 new jobs are to be created in the renewables sector.

The country's coal needs would be met by domestic sources, with imports only be allowed to top up domestic supplies. The development of new lignite deposits in Zloczew and Oscislowo would depend on decisions by their investors and the evolution of carbon prices.

Atomic ambition

The second pillar foresees the creation of a parallel zero-emission energy system based on offshore wind and nuclear. Up to Zloty 130 billion is to be spent developing 8-11 GW of offshore wind capacity by 2040 (5.9 GW by 2030) and Zloty 150 billion on building 6-9 GW of generation III and III+ nuclear capacity by 2043.

The government sees the development of nuclear capacity to be essential to meet forecast rising power demand and ensure stable supply.

The first 1-1.6 GW unit is expected to be commissioned in 2033, with an ambitious target to build subsequent units every two to three years.

The third pillar involves improving air quality by banning the use of coal in home heating in urban areas by 2030 and in rural areas by 2040.

Cities with 100,000+ populations will only be able to purchase zero-emission buses from 2025 and all buses operating in those cities must be zero emission by 2030.

Solar drive

The policy also targets continued growth in solar capacity and less ambitious development of onshore wind.

Solar capacity is due to rise from 2.26 GW today to between 5-7 GW in 2030 and 10-16 GW in 2040.

Onshore wind capacity is forecast to grow from 6 GW today to 8-10 GW in 2030. Onshore wind farm growth has been hampered by distance regulations introduced in 2016, which the government is now considering relaxing from next year.

The share of renewable energy in final energy consumption is planned to increase from 13% today to 23% by 2030, with a 32% share in the power sector, a 28% share in heating and a 14% share in transport.

Baltic Pipe

Natural gas is named as a bridging fuel in the policy, with the construction of the 10 Bcm/year Baltic Pipe investment enabling Poland to directly import Norwegian gas from October 2022.

Poland is also expanding the capacity of its Swinoujscie LNG terminal by 50% to 7.5 Bcm/year by the end of 2021 and is planning to install a 4.5 Bcm/year floating storage and regasification unit in the Bay of Gdansk in 2026-27.

Greenhouse gas emissions are targeted to fall by 30% from 1990 levels by 2030.