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Showing posts from May, 2016

"Market power": Capacity Markets Are Not Cost Effective

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We are often told in Poland by advocates of coal that renewable energy is too expensive. They ignore the fact that onshore wind is cheaper than new coal plants right now and that PV will be cheaper during the investment life of any new coal plant planned today.

The cost of renewable energy support in Poland is about 7 PLN per month on an average consumer bill of 153 PLN. Most of this has gone to electricity producers who would have generated the electricity without support (old hydro and co-firing). Had new capacity in RES been supported, the impact on consumers is normally cut in half by pressure of prices due to increased supply.

Now we are told that consumers must pay to have old coal-plants standing by on the few days a year when extra power is needed. Studies in the United States have demonstrated that this is the most expensive way possible to meet peak demand. See U.S. Electric Power Research Institute (2013).*

Now, however, the cost impact on consumers is being finally discus…

PERVERSE INCENTIVES AND ENERGY PROBLEMS

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We live in a strange time and place. Electricity in Poland is much cheaper than it was a few years ago, but the experts are projecting power shortages in the near future. The rules of supply and demand seem suspended by the regulatory and political situation. The low price of electricity in Poland is stopping new construction and investment for multiple possible sources.

Polish government officials do not want us to follow the road of Germany and develop a higher percent of renewables. They say it is too expensive and unreliable. Yet German electricity is cheaper than Polish power and has far, far fewer outages.

The Polish Government objects to adding too much to the price of electricity to support renewable energy, but proposes to continue to use most of the support for the existing production of electricity with only a small partial switch to biomass to make it "green." This does not create any new electricity and detailed studies show that it is 100% transferred to end-u…

Reality Hits Polish Government Plans for Renewable Energy

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The Polish law on renewable energy has been a moving target for years. Originally, the law was deliberately delayed to allow the state-owned energy companies to keep receiving support which the European Commission would have stopped if the new law had been notified under the treaty. Now the delays are being triggered by the new government's efforts to amend the program on the fly.

The government has convinced itself that what RES capacity is already done and more co-firing will be all that we need. Some additional biogas plant construction (actually a lot in real terms) is strongly supported in their mix. But the classic RES technologies are on their black list. They have been completely persuaded by the coal lobby that these technologies are too unreliable to be major parts of the energy mix.


The factual basis for their assumptions is being broadly challenged by the RES sector. Poland will not meet the 2020 target without a serious program that includes the full mix of RES techn…