Mott's Blog

There are no real surprises in the latest Bankwatch/Friends of the Earth report on Central European Governments use of EU climate change and environmental funds. "... Polish energy policies and strategies continue to follow a path which centres almost entirely on sustaining the existing energy system...."   CLIMATE’S ENFANTS TERRIBLE SHOW NEW MEMBER STATES’ MISGUIDEDUSE OF EU FUNDS IS HOLDING BACK EUROPE’S CLEAN ENERGY TRANSITION (January 2016) p. 24. "77% of heat energy comes from burning coal, with other fossil fuels such as gas and oil adding up to cover almost 90% of heat production. The energy system is an oligopoly, with four out of five coal mining companies fully or partially state-owned and the production market mostly shared between four companies where the state is a majority stakeholder. A workforce of 100,000 hard-coal miners, 240 trade unions with significant political power as well as many interconnections between the government and the energy sector ...

As new management boards are appointed in the big energy companies owned by the state in Poland, the new Law and Justice Government seems bent on accelerating the politicization of these companies.  The agenda is to continue and accelerate investment in new coal based energy plants and to use the cash flow of the electricity producers to under-write the bankrupt state-owned mines (15 billion PLN in debt with an annual rate that is growing). The policy is to force the state-owned firms or firms where the state has the biggest block of shares to make decisions that are contrary to the economic interests of the company's shareholders and supportive of the politicians; agenda. This is, of course, highly illegal. The immediate impact of PO and PiS manipulating the Government's ownership of energy company shares has been to destroy the value of the equity of the companies. Polish state-owned energy companies are losing value much faster than the sector globally or the private c...