No Climate Aid Can Go to Polish Coal - the Inevitable Has Happened

Poland's politicians have kept up a myth that the EU would allow special assistance arising from the climate and emissions trading scheme to go into modernizing Polish coal-fired power. This - as well as a diversion to general revenue - was the model from the last climate deal (whereby Poland abused the EU funding in ways that were not unnoticed in Brussels).

Now the new deal has a big coffer, but the projects must go through the Environmental Investment Bank for approval. Note: EIB gave up on generally supporting coal projects more than a year ago.

Thus, we have the situation - entirely expected - where the EIB will not allow this sizable fund to be used to continue projects that emit more than a small amount of CO2.

"...the EIB does not intend to recommend funding any projects whose emissions are greater than 550gCO2 / kWh, which in practice excludes all coal projects. [An EIB representative] added that the emission limit can only be made more stringent. ..."  CIRE.PL

This takes 100 billion PLN off the plate for modernizing the existing coal-fired infrastructure. Contrary to PiS rants, there was never any other alternative, especially after Poland abused the the first round of financial support to make a transition from coal.

 Add the write-down of the old coal plants which are falling apart, the pending European Commission crack-down on the illegal use of green certificates, the aversion of most investment funds to investing in coal, and the diminished equity fund raising potential caused by dumping the bankrupt coal mines on the electricity companies, and you wonder where the hell the money with come from for the new government's grand plans. The "dirty" secret is that there will not be enough money for any source to continue the status quo in Polish energy. 

Newly appointed government directors of the electricity companies will be replaced by another set of marginally qualified or unqualified political appointees in the near future. They will be hampered by the unrealistic promises of both the new and old governments. 

The fact is that Polish electricity prices are too low to sustain new investment in the existing coal infrastructure, but they are already higher than German prices. Something is fundamentally wrong here, as evidenced by the fact that the Polish politicians have stubbornly gone the opposite direction of the rest of Europe and the private investment community.  


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