New review of Poland’s energy policies

The International Energy Agency has recently published its 2016 review of Poland’s energy policies and programmes. Energy policy is complicated because of the country’s dependence on domestic coal. While Poland has made some progress on improving energy efficiency and installing renewable energy, it is obvious that much more is needed, even if the IEA’s executive director praises Poland for considering investing in nuclear energy. The summary below includes the IEA’s recommendations on energy efficiency.

 

IEA urges Poland to clean up its energy sector while balancing energy security, environment and affordability requirements

Poland’s new energy strategy should put the country on a pathway towards a cleaner energy system while strengthening energy security, the International Energy Agency said in its latest review of the country’s energy policies. The forthcoming energy strategy is likely to prioritise long-term energy security, placing a strong emphasis on reducing greenhouse gas (GHG) emissions and air pollution, increasing energy efficiency and decarbonising the transport system.

The new energy strategy will require significant investments to reduce the share of carbon-intensive power plants and increase the share of low-carbon energy, including nuclear energy and renewables, said Dr Fatih Birol, the IEA’s Executive Director, at the launch in Warsaw of Energy Policies of IEA Countries: Poland 2016 Review.

The executive summary states that local air pollution is one of the largest environmental health risks in Poland today.   Household heating is a major source of local air pollution in the country, and emissions from this sector are difficult, if not impossible, to regulate. The European Environment Agency estimates that household heating produces approximately 40% of particulate matter emissions. The key factors are ageing and low efficiency of combustion in heating units and, to a lesser extent, the behaviour of household consumers.

The review notes that according to the government coal will remain the cornerstone of the energy system of Poland for the long term. The mining sector is a major source of employment and policies affecting the sector have a large social and regional impact. Dr Birol said that the new energy strategy must determine the long-term role of coal in the economy.

Coal combustion remains the largest source of greenhouse gas emissions and local air pollution in Poland. Many of its coal-fired power plants are old and inefficient: the replacement of these plants by plants with the newest technology represents an economic challenge for the sector, but at the same time offers an opportunity to reduce GHG emissions, air pollution and the carbon footprint from power generation. Coal use in household heating, together with waste burning, is a major source of local air pollution and “the government must ensure that less-well-off households are provided with the means to switch to cleaner solutions, such as natural gas or district heating where available,” said Dr Birol.

Poland’s energy efficiency policies have been strengthened by the adoption of measures such as the white certificate scheme, and have incentivised industry to increase energy savings. These measures represent a solid starting point, but the government needs to broaden the scheme while at the same time developing and implementing new measures targeted at the buildings sector. In the electricity sector, Poland must step up investment in new generation and strengthen interconnections with neighbouring countries if the country is to satisfy future demand for electricity.

There have also been changes in siting regulations and reductions in the support mechanisms for renewable energy which have created uncertainty, and have had negative implications for investor confidence. “The future of renewable energy in Poland looks uncertain” Dr Birol added.

On the other hand, Dr Birol welcomed the country’s decision to pursue nuclear energy as a means to reduce emissions and strengthen energy security while highlighting the importance of making the correct technology and partner choice in a timely manner.

The recommendations in the report for energy efficiency are:

Industry

• Monitor the outcome of the revised WCS to ensure efficiency in the application process and include cost effectiveness in the evaluation of energy efficiency measures.

• Energy savings could be achieved through greater use of ESCOs, which need to be supported by dedicated measures such as standard contracts.

Residential and commercial

• Develop a long-term strategy for existing buildings in accordance with the EU strategy for heating and cooling and Article 4 of the EED (energy efficiency strategy for buildings). This strategy should be connected with communal activities and contain renovation roadmaps. These can be embedded in local energy plans.

• Channel   EU   structural   funds, or   other   suitable   financing   sources,   towards   the   introduction of a long-term funding programme for support (loans and grants) of energy efficiency measures in residential, communal and social housing and redesign the national tax system to allow for reimbursement of some investment costs spent on energy efficiency of privately owned buildings.

• Prepare a coherent system for monitoring energy consumption and energy savings in all relevant sectors and improve the database and the energy statistics on local level, especially in the buildings sector.

• Extra points in the white certificates should be awarded for investments in the housing sector and energy-poor households.

Transport and electro-mobility

• Develop a policy package to enable reaching the very ambitious EV targets of the EDP.

• Market-based mechanisms (e.g. bonus-malus) and a combination of financial and non-financial incentives should be considered to lower the costs.

• Develop investment incentives for EVSEs   (private and/or public charging station) in parallel to EV support. Identify strategic locations for fast chargers and consider specific investment incentives or state investments for fast charging infrastructure.

• Plan for efficient integration of EVs in the power grid, e.g. through facilitating a forum for discussion together with DSOs, utilities and other stakeholders.

District heating

• Introduce a stable market-based support scheme for high-efficient CHP investments in bio, waste and gas, to stimulate replacing small heat boilers and ageing thermal plants with new modern plants for high-efficiency co-generation in line with the EED.

• Replace the current tariff approval of the ERO with a mechanism that allows for higher profit margins to incentivise investments in CHP and network reinvestments.

The report can be downloaded here.