PGE’s solar park, Poland (PGE, Public domain)
The European Union should allocate a permanent budgetary position dedicated to the transformation of mining regions, Jerzy Buzek, Member of the European Parliament, said during the European Economic Forum in Katowice, Poland. “We are currently building broad public support in this area, we must also have innovative projects. Social innovations are of the greatest importance in the European Union,” he added.
State-owned Polish energy company Tauron said recently it may sell some of its loss-making coal mines to try to improve its financial situation. Tauron is the most indebted of Poland’s energy groups and faces costs related to a cap on electricity prices, putting pressure on its ability to sustain the mines.
Tauron’s mining business consists of three coal mines in the south of Poland — Janina, Sobieski and Brzeszcze. “Tauron wants to get rid of the mining business,” one of the sources told Reuters, adding the plan would most likely not include the Brzeszcze mine, which Tauron took over in 2015.
Coal output at Tauron’s mining unit fell to 5 million tons last year from 6.45 million a year earlier, while the business’s operating loss increased to more than PLN1bn (EUR232.2m) from PLN211m in 2017. The group’s net profit fell to PLN205m from PLN1.38bn in 2017. Tauron’s total debt amounted to almost PLN11bn at the end of last year compared with its current market capitalization of PLN2.95bn.
Though many mines have been shuttered over the years and continue to close, „the sector could use at least 15,000 more workers,” Kazimierz Grajcarek, who was once responsible for miners at the Solidarity trade union, told AFP.
Poland is now building a big, new coal-fired power plant and consumes more coal than it produces. The difference is made up by imports, including from Russia, which provided Poland with nine million tons of coal last year.
Last year, wholesale power prices in Poland, which generates most of its electricity from coal, jumped following a surge in the cost of CO2 emissions and in coal prices.
A greener future?
Green and clean energy is the future, but the process of reaching a positive energy mix is a time-consuming and a costly one, according to panel participants at the „2050 Poland for Generations”.
„Climate changes are real and are constantly progressing, but we do not always have time to think about it, let alone counteract,” said vice-president of ING Bank Śląski Joanna Erdman.
Erdman added that currently 100 per cent of the energy consumed by the ING Group comes from alternative sources. „An example of such activity is the launch of a joint project with Tauron at the end of 2018, i.e. charging points for electric cars and car sharing system in Katowice, and we have announced a program for expanding the scooter and scooter sharing network from blinkee.city in Katowice and later in Warsaw,” Erdman stressed.
However, as the panelists noted, the process of moving away from polluting sources of energy is not easy and will not happen overnight. The challenge now is to plan an appropriate path to achieve the largest share of green energy in the Polish economy.
„For today, we do not have the technology that can allow us to eliminate high-emission energy sources by 2050,” vice-president of Tauron Polska Energia Jarosław Broda, said. According to him to achieve this goal it is necessary to cooperate between business and energy producers, and choose common solutions, which — even regardless of the costs — will allow one technology or path to achieve the expected results.
“It is necessary to recalibrate our consciousness, not to think only in terms of the costs necessary today. We must remember about the longer term, and this is born of short-term goals. We should move from the expensive position to the worth site, because it will pay off in the future,” the vice-president of ING BSK agreed.
However, the vice-president of the Polish Development Fund (PFR), Bartłomiej Pawlak, raised the question of the sense of some plans and investments. In his opinion, the suspension of the idea of building a nuclear power plant should be seriously considered. “A nuclear power plant is a very expensive and time-consuming investment, and in addition it is no longer a state-of-the-art technology, we also have no experience in its implementation, so it seems more sensible to spend these funds on more modern and ecological variants,” said Pawlak.
The PFR Vice-President also stressed the importance of a common stance by all participants in this program. It is difficult to expect that a government-imposed top-down decision can be forced to specific measures by producers or independent financial institutions that will take a significant part of financing on their shoulders.
Poland and Germany lag
The governments of France, the Netherlands, Belgium, Sweden, Denmark, Spain, Portugal and Luxembourg launched an appeal to boost EU climate recently. Germany, Italy and Poland were absent from the list of signatories of the document.
A “non-paper” signed by the eight countries calls on the European Union to step up the fight against climate change and sign up to a EC’s plan to achieve net-zero greenhouse gas emissions “by 2050 at the latest”.“The EU must make ambitious announcements during the UNSG Summit, preferably on setting a target for the EU to reach net-zero greenhouse gas emissions by 2050 at the latest,” the document reads, calling on EU countries to “enhance” their national contributions for 2030 as well.
According to the UN, current pledges would lead to global warming of more than 3 centigrade, which scientists warned could have devastating impacts.
“The increased climate commitment shown by these eight countries makes the lack of concrete action on the part of some EU governments even more glaring,” said Agnese Ruggiero, from a think tank Carbon Market Watch. “It’s time for those lagging behind to step up and deliver the kind of policies that will help us keep climate change in check,” said Mr. Ruggiero, who leads the PlanUpEU project with other NGOs, including the European Environmental Bureau.
“We are heading towards climate breakdown,” warned Sebastian Mang, EU climate policy adviser at Greenpeace. But while some governments are taking this threat seriously, “the German, Italian and Polish governments still have their heads firmly in the sand,” he said.
A report by the Intergovernmental Panel on Climate Change (IPCC), published in November last year, said global warming could be stopped if resolute action is taken now to drastically reduce emissions in all sectors of the economy by the end of the coming decade.
Although time is running short, Sebastian Mang of Greenpeace believes climate catastrophe can still be avoided. “Changing course can bring us back from the brink,” Mang told Euractiv.
Renewables are the key
Scaling up renewable energy sources in Poland would benefit the economy, improve people’s health, and reduce serious environmental problems — including the worst air pollution among cities in Europe — according to a new World Bank report, Poland Energy Transition: The Path to Sustainability in the Electricity and Heating Sector.
The report says that an ambitious target for Poland would be for the share of renewable energy in power generation to reach almost 50 per cent by 2030 (versus 14 per cent now), with the share of coal dropping below 40 per cent (versus 80 per cent now).
The most ambitious scenario set forth in the report could also lead to a 25 per cent reduction in direct coal mine jobs by 2030 (20,000 jobs), however, it will be more than offset by potential 100,000 jobs a year created by improving the energy efficiency of homes in Poland. Active labor market policies can help mitigate impacts on jobs, which are expected to be negligible at the national level and modest at the local level, given a dynamic economy and tight labor market in the coal-producing Silesian region.
“Poland has already achieved success in decoupling economic growth from emissions. It has simultaneously increased its gross domestic product seven times and decreased its emissions in the electricity and heating sector by 30 per cent since 1989,” says Carlos Piñerúa, World Bank country manager for Poland and the Baltic States.
“However, Poland’s heavy reliance on coal creates serious environmental problems and imposes heavy health costs on the population, who breathe polluted air. Our analysis shows that investing in renewables now would be good for people’s health as well as economically justified,” he added.
“More than 60 per cent of Poland’s existing coal-fired power plants is over 30 years old. The replacement of these plants presents an opportunity to reduce air pollution and carbon emissions by shifting to cleaner sources,” says Xiaodong Wang, senior energy specialist at the World Bank and the author of the report. “The decisions made today will strongly shape emissions in 30-40 years, so if Poland wants to put itself on a sustainable path, the time to act is now,” he stressed.