Shale Gas Fades, Nuclear Energy Remains Illusive and Coal Remains Problematic in Poland; Government Stays in Denial

As the Government in Poland makes glorious plans for shale gas in the country's long-term energy plan pipe-dream, the actual number of active wells in exploration drops to 13 (a 50% reduction from last year). The Government plan for was 80 wells this year. By contrast, the United States has 27,000 active wells. "Experts say that around 300 test wells are needed to get a proper estimate of Poland's gas reserves." The major international oil companies have generally pulled out of Poland.

The leading political party has long held out to the public that shale gas would be a critical part of 
Poland's energy mix. Now the Ministry of Economy at least concedes that it is uncertain. But the politicians have not taken it out of their election speeches.

The only plan is to remain dependent on coal and lignite with the illusory promise that Poland will somehow make deep-mined coal competitive with surface-mined imports. This premise is essential farcical. The "material and supply costs for underground mines are 50% more than those of surface mining and that labor costs are five times higher. As well as, the capital costs also shows higher costs for underground mines." The relative cost of deep mining is approximately three times higher. 

I think that only in a former communist country or in some authoritarian regime could the government so systematically lie about basic economic facts.  It may, however, be that the government only assumes it can be so disingenuous.See below. 



And somehow coal-fired power plant capacity now closing will be replaced or even expanded.[1] With no major international investment in coal in Poland, and European firms closing newly-built coal plants elsewhere, this seems to be a dubious proposition. The government has pressured its state-owned power companies to build new capacity, but this will be hard-pressed to keep up with closure of Soviet-era plants.

The plans for nuclear plants seem just as uncertain. Originally sold to the public as cheaper energy, it turns out that new nuclear plants are more expensive right now than some renewables. 


This is an ironic contrast to the statements by the Polish Government that renewable energy cost too much. The fact is that only the  government-controlled energy firms are "interested" in doing nuclear plants in Poland. The commercial investment market may have already rendered its verdict.

The bright spot is that the Polish public overwhelmingly supports green energy and the political parties are simply locked in a time warp that has distorted their vision. Attitudes in Poland are changing under the political radar,but will manifest themselves in the near future. 

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[1] It seems unlikely that Poland can reverse the European trend for declining prospects in new coal power construction. Here. Investment analysts point out "Poland is one of the biggest primary energy producers in the European Union with the country's energy sector accounting for over 20% of its GDP. The obsolete capacities of the sector, however, are posing a threat to the future stability of the country's energy balance. More than 60% of Poland's electricity generation facilities have been in use for over 30 years now. According to economy ministry estimates, 12% of all generation facilities will have to be taken off the grid and upgraded or replaced between 2014 and 2017.Closing old generation facilities before new ones are built puts Poland's energy supply at risk and may cause blackouts."
- See more at: http://www.securities.com/emis/insight/polands-energy-sector-living-borrowed-time#sthash.oMUYgZBl.dpuf

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