Lack of Energy Diversity Cripples Polish Electricity Supply
With 85% of the electricity in Poland supplied by coal, the country is in a unique position of vulnerability in Europe. While the use of coal throughout Europe is declining sharply, it is not changing significantly in Poland. Couple this fact with the steady decline in the profitability of operating coal plants,(1) and you can see nothing to suggest a very bright energy future in Poland under this policy. Recent changes in Poland also seem to clearly have stopped major new wind and PV energy capacity.
What we now see in the interim in Poland are the consequences of a lack of energy diversity in the supply. For the second summer in a row, the coal plants are struggling due to schedule maintenance in the warm weather but also due to low water levels. While the wind can also be lower in these hot and dry months, our neighbors with extensive PV capacity are seeing a nice natural balancing with the hot and clear weather. Poland does not have that asset.
Even the long-term strategy of meeting the EU renewable energy targets in 2020 and 2030 is linked now strongly to co-firing biomass in coal plants. This could be as much as 75% of the total RES in 2020 planned by the new government. Except if the coal plants themselves fail, then the co-firing as a RES source fails as well. Given so many old coal plants must be closed by the final deadline for meeting EU emission requirements, this is a very poor long-term gamble for RES capacity. In the short-term, it also means that disruption of the coal-fired plants like we have seen due to water problems, will also stop production of co-fired biomass energy. New coal plants hoped for construction in the near-term are also having difficulty securing financing from private equity and all forms of debt funding.
The surest way to drown in the ocean is to try to consistently swim against the current. The force of nature is just bigger than you are and it is a contest that you cannot win.
In the same way, fighting against the long-term economic and technological trends in energy seems like a likely way to end up dead in the water.
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(1) The UBS study in 2015 pointed to massive closures of coal-fired plants in Europe and very limited profitability of plants still operating. Bloomberg has reported a general trend to phase out coal plants in Europe.
UPDATE: Monday, June 27, 2016: The peak power load was even greater on Friday. The cooling water problem limited coal-fired power plants operations. All of Poland's neighbors did not have the problem and their prices were much lower, since they all have much higher penetration of PV in their energy mix.
What we now see in the interim in Poland are the consequences of a lack of energy diversity in the supply. For the second summer in a row, the coal plants are struggling due to schedule maintenance in the warm weather but also due to low water levels. While the wind can also be lower in these hot and dry months, our neighbors with extensive PV capacity are seeing a nice natural balancing with the hot and clear weather. Poland does not have that asset.
The surest way to drown in the ocean is to try to consistently swim against the current. The force of nature is just bigger than you are and it is a contest that you cannot win.
In the same way, fighting against the long-term economic and technological trends in energy seems like a likely way to end up dead in the water.
______________________________________
(1) The UBS study in 2015 pointed to massive closures of coal-fired plants in Europe and very limited profitability of plants still operating. Bloomberg has reported a general trend to phase out coal plants in Europe.
UPDATE: Monday, June 27, 2016: The peak power load was even greater on Friday. The cooling water problem limited coal-fired power plants operations. All of Poland's neighbors did not have the problem and their prices were much lower, since they all have much higher penetration of PV in their energy mix.
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