At the end of May, the Ministry of State Assets presented the long-awaited Electricity Sector Transformation Programme for consultation. It is in it that the concept of reorganising the sector and creating a new entity - the National Energy Security Agency - is included. According to the assumptions, (contrary to its name) NABE is to be a commercial company and take over the coal assets of PGE, ENEA and Tauron. NABE is to include around 70 hard coal and lignite units, excluding cogeneration plants, together with lignite mines. The main reason for this action is the generation of losses by coal-fired power plants and the deteriorating financial condition of the companies. The state, by taking over assets and debt, wants to relieve the companies' balance sheets and enable investment in low- and zero-carbon generation sources and distribution networks. These areas need very high levels of investment, for which the companies have to go to financial institutions, which in turn do not lend money to entities with high-carbon projects in their portfolio. NABE is to maintain the units and mines, but not make any new investments. However, it is not clear what happens next. 

What is needed is a vision for change in the sector, is an idea of how and when to phase out coal capacity and what to replace it with. Changes to the ownership and organisational form - which is what NABE de facto is - are only the first step in this direction. However, without an answer to the question of on what terms and for how long such an entity would operate, where to get the money to maintain it, NABE becomes a high-risk project whose concept will be very easy to undermine. The Programme is missing a number of key elements:

• There is a lack of an impact assessment to estimate the social and economic consequences of the creation of NABE. It is not known what the costs of the whole operation will be, including those associated not only with maintaining the increasingly economically unviable blocks, but also with decommissioning them. In this context, the valuation of the assets being taken over, which will show how much will have to be contributed to pay off the liabilities of the new entity, will be crucial.
• There is a lack of definition of a timeframe for the operation of NABE. Showing a sound and economically viable path for the closure of the blocks is the only chance for the plan to be accepted by the European Commission, which under EU rules will give its opinion on the government's idea if state aid is involved.
• The timetable for closure of the units should be based on modelling of the electricity mix, which will make it possible to determine whether, and for how long, the power stations will be profitable at the expected prices of CO2 emission allowances. There is no modelling of the mix in the Programme, and the adoption of assumptions taken out of the Energy Policy of Poland until 2040, which was already outdated at the time of its publication, is unrealistic and is a manifestation of hibernating and conjuring reality.
• Modelling would make it possible to forecast the capacity that must complete the generation mix replacing the coal units being phased out. However, there are no scenarios for filling the coal gap.
• The rules for the operation of the units in the market have not been defined and the merger of the companies will affect their operation in different market segments - generation, sales or the capacity market.
• The consolidation of so many power plants under NABE will result in a very high concentration in the electricity market. However, the transformation concept does not specify the impact of NABE on competition and consumers. Meanwhile, the Ministry of Climate and Environment has not backed away from the idea of abolishing the exchange bond, which could offset the negative effects of consolidation to some extent.
• Although NABE is not described as a vehicle for decommissioning coal-fired power plants, its actual role cannot be otherwise. It is therefore important to adopt rules for the retirement of units, and the timing of the closure of individual units must take into account the timetables planned by the regions in their just transition plans.
• The Ministry does not specify whether a proper, detailed programme for the transformation of the electricity sector, addressing the above shortcomings, will be consulted.

Conclusion - let's make the strategy more realistic, because reality has already overtaken it

Although the Ministry of State Assets argues that the most important element of the electricity sector transformation programme is the separation of coal assets from state-owned power companies, this is only for starters. Such a strategic action requires seriousness and sound analysis, meanwhile the government's idea is contained in a few pages of a document. Before taking such a significant decision as the creation of NABE, consolidating more than half of the energy market and involving huge financial resources, it is necessary, among other things, to prepare a real plan to move away from coal and extinguish loss-making assets. Some energy plans are like hibernatus - no one knows what reality they are in. Therefore, instead of creating the appearance that the power industry has not changed in recent years and creating NABE as a cure for all its problems, it is necessary to carry out a real assessment of the costs and benefits of such an operation and to present a reliable, well-prepared and realistic plan for the transformation of the Polish power industry.