The Possible New Government in Poland Seems to be Struck on Coal

While throughout Europe, the sun is setting on coal-fired power plants, Poland's likely new governing party seems eager to double down on "black" at the energy table. The Katowice convention of Law and Justice saw their key people repeat the plan to replace the coal-fired plants closing in Poland in the next few years with newer versions of the same thing. Of course, a pulverized coal plant meeting EU requirements on emissions has a levelized cost of production higher than onshore wind mills. See U.S. Energy Information Agency "Levelized Cost and Levelized Avoided Cost of New Generation Technologies,in the Annual Energy Outlook 2015. By the time all of these coal-induced dreams could actually be built, solar PV will also likely be near the same cost as well.

In the same vein, the coal that will be burnt in Poland in ten years is far more likely to be foreign than Polish. Polish coal production is half of what is was in 1990 and is dropping every year. The state-owned mines are not economical to operate and world coal prices are not expect to grow significantly to cover such inefficient producers. This is on top of the fact that CO2 penalties will be growing after 2020 to levels more than twice the current 7 Euro/ton and that free allowances generally will run out. No one else is  building new coal-fired plants in Europe and most of those still operating are in some plan to be divested from the parent utility or are being shut-down by the national government.

Where will the next 100 billion Euro to modernize energy come from? Not the national budget. Not the European Union that is on the path for decarbonization. Not the net revenue of the state-owned power companies which is far too small for the task. Not even their debt capacity in a world where more and more major lenders have opted out of coal. And last and least likely, not from foreign capital.

These are brutal facts that no one in Poland can change. The only discussion should be on how to transition to "next thing" and not how to fight an expensive and futile rearguard action against every trend in energy in Europe. Coal-fired plants will, of course, be around a long time in Poland. But they will decline in significance every year until they disappear altogether. No politician in Poland is willing to have an honest discussion based on the facts.

Law and Justice says that they will push Brussels into allowing a separate set of rules for Poland on these issues. Apparently they have been getting free lectures from the Tsipras School of European Negotiation Skills. Every other Member States should pay the freight for emissions reductions but Poland (who until recently claimed some special place by virtue of its adherence to Roman Catholic ideology). Oops, Roman Catholic ideology just went the other way!

Finally Law and Justice does not like large wind farms. I am not a huge fan either and I prefer distributed energy (for which new opportunities in Poland loom large) ....but to meet 2020 targets Poland needs about 4000 MW of wind energy. Breaking this wind number down into "friendly," small neighbor and backyard windmills as PiS hopes to do is economically and technically impossible. Where will PiS find its renewable energy?

Another election will pass in Poland with no serious discussion of the future of energy in this country. Locked into empty slogans, bankrupt coal mines, aging coal-fired power plants, economic ignorance and lost causes, Poland seems to be waiting for some hard lesson in life to bring everyone back to reality.


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