Data about the energy sector to 2021

Energy sector data

We are presenting some key data on Polish energy sector in 2021, significant from the perspective of changes taking place in Poland. The data comes from the report "Energy Transition in Poland. 2022 Edition".

You can download the report as a PDF file at the bottom of the page.

Main conclusions

• Share of coal in electricity generation in 2021 increased and is over 72%.
• Share of renewables fell to about 17% despite record production from these sources (30 TWh).
• In 2021, a record was set in electricity production (179.4 TWh, +14% y/y) and consumption (180.3 TWh, +5.4% y/y).
• Net electricity imports were the lowest in 5 years (at 0.89 TWh).
• Available capacity increased by 3.7 GW (to 53.5 GW).
• Capacity of conventional units has remained stable for years; RES capacity is growing (+4.4 GW y/y), especially photovoltaics (+3.7 GW y/y).
• Pace of expansion and modernisation of generation units is still insufficient to ensure energy security in the face of planned shutdowns in the conventional power generation.
• Despite high CO2 prices, coal-fired generation was less expensive than natural gas-fired generation, resulting in a record increase in the use of coal-fired capacity and a decrease in the use of natural gas-fired capacity.
• For the first time in years, wholesale electricity prices in Poland were among the lowest in this part of Europe. This resulted in high exports and production.
• The weighted average price of CO2 in 2021 amounted to 53.13 euro/t CO2. Poland’s revenue from the sale of CO2 allowances was more than PLN 25 billion in 2021.
• Natural gas prices, and in turn also electricity prices, have risen to record highs across the region.

Generation capacity

• 53.5 GW - the achievable capacity available at the end of 2021. This is 3.7 GW more than a year earlier.
• Share of renewable energy sources (RES) capacity increased to 31% (from 25%).

• The decrease in hard-coal power plant capacity results from the shutdown of 12 units (two units each in the power plants Dolna Odra, Rybnik, Łaziska, Łagisza, Siersza, and Stalowa Wola).
• The increase in lignite-fired plant capacity is due to the commissioning of a new 496 MW unit at theTurów power plant.
• The largest increase in capacity was in renewable energy, especially in prosumer photovoltaics.

• Conventional capacity has fluctuated between 32 GW and 35 GW for years, with a decline of 0.7 GW last year to 35.3 GW.
• RES capacity has quadrupled over the decade, from 4.1 GW in 2012 to 16.7 GW in 2021.

• At the end of 2021, 16.7 GW was installed as RES, an increase of 4.4 GW (+36% y/y).
• Solar PV capacity increased by 3.7 GW (+94% y/y), reaching 7.7 GW. In 2021, solar PV capacity surpassed that of wind farms.
• RES development in 2021 was mainly driven by the rapidly growing number of prosumers, and to a lesser extent, by RES auctions.

Electricity production

• 72.4% was the share of coal in electricity generation in 2021 – 2.7 p.p. more than a year earlier.
• Production from hard coal reached its highest level in 10 years at 84 TWh (+1.4 p.p.).
• Production from natural gas fell by 0.7 TWh, which translated into a 1.6 p.p. decline in the share of gas.
• Production from photovoltaics doubled from 2020 to 3.8 TWh.
• Energy production from all RES sources last year amounted to a record 30 TWh. Despite this, the share of RES in the generation mix fell to 16.7% (from 17.7% in 2020).

• Production from coal and lignite increased by 20.1 TWh compared to the pandemic year 2020. This is a result of increased electricity exports, among other things. The large scale of the increase is also due to low production from coal in 2020.
• Coal-fired generation replaced gas-fired plants, among others. The latter fell in 2021 for the first time in more than 10 years due to the very high price of natural gas.
• Among renewable sources, electricity production from photovoltaics grew most dynamically (+95% y/y, +1.9 TWh), while biomass co-firing recorded the largest decline (-18% y/y). Production from wind farms increased by 5% y/y.

• Domestic electricity production totalled 179.4 TWh. This record result is 14% higher than in 2020 and is the first increase in electricity production since 2017.
• The increased demand for electricity mostly has been met by an increase in coal-fired capacity generation, especially from hard coal.

• In 2021, 30.4 TWh of electricity was generated from RES, which is 8.5% more than in 2020.
• Wind power was responsible for more than half of the production from RES (54%), with the share of biomass at 15% and photovoltaics at 13%.
• In 10 years, production from RES has increased by 80%, from 16.8 TWh in 2012 to 30.4 TWh in 2021.
• Excluding PV, the largest increase in production was seen in wind power, at +250% in a decade.

Energy balance

• Electricity production in 2021 was the highest in Polish history at 179.4 TWh.
• Electricity demand was also a record 180.3 TWh.
• Net imports of electricity were the lowest in 5 years.
• 99.5% of electricity demand was met by domestic generation.

• In 2021, electricity imports were 15.10 TWh, while exports were 14.21 TWh. The balance of exchange with foreign systems was 0.89 TWh.
• Electricity exports were the highest since 2016, mainly due to lower prices on the wholesale market in Poland. This stemmed from the lower cost of electricity production from coal in Poland than from natural gas in neighbouring countries (even after taking into account the high price of CO2 emission allowances).

• In 2021, GDP grew by 5.7% and electricity consumption by 5.4%.
• This is the first year in more than a decade in which electricity consumption growth was roughly equal to GDP growth. This is due to the unusual reference year (2020), which was the first year of the COVID-19 pandemic.

• Winter peak power demand in 2021 was 27.617 GW, which was 0.818 GW more than in 2020.
• Summer peak power demand also increased, in this case to 24.533 GW, or 1.5 GW more than in the pandemic year 2020.
• The increase in demand is related to the electrification of heating (heat pumps during the winter peak) and the increase in air-conditioned spaces (summer peak), among other factors.

Emissions

• In 2020, Poland was ranked 6th in the world in terms of carbon intensity of primary energy consumption.
• The country with the highest carbon factor was South Africa (3.18 t CO2/toe). Poland, with 2.85 t CO2/toe, was just behind China (2.87 t CO2/toe). For comparison, the British economy emitted 31% less than Poland (1.97 t CO2/toe) and the French economy 56% less (1.25 t CO2/toe).

• Carbon intensity of electricity production in 2020 in Poland was about 710 kg CO2/MWh and was one of the highest in the European Union.
• Such a high carbon intensity has and will continue to impact the industry due to the increasing importance of the carbon footprint in manufacturing and high sensitivity of electricity prices to the price of CO2 emission allowances, among other factors.

• In 2020, most emissions were from electricity and heat generation - 35.1% of total gross emissions.
• Transportation and industry were responsible for 16.9% and 16.5%, respectively.
• Households emitted 9% of greenhouse gases.

 

• According to Forum Energii estimates, in 2021 emissions increased by about 6% to about 397 million tonnes of CO2 equivalent, mainly in transport and electricity production.
• Land use, land use change and forestry (LULUCF) was responsible for absorbing about 15 million tonnes of CO2eq.

• In 2021, emissions from power and CHP plants are estimated to have increased by 15% to 140 million tonnes of CO2eq.
• No significant changes in emissions from the heating plant are expected.

• Hard coal was responsible for 62% of greenhouse gas emissions from the power industry in 2021 (93 million tonnes CO2 , +18% y/y).
• Lignite was responsible for 31% of emissions (7 million tonnes CO2 , +18% y/y).
• The production of electricity and heat from natural gas fuels was associated with emissions of 10 million tonnes of CO2 (-4.7% y/y).

• Poland’s total CO2 emissions in 2020 were 374 million tonnes; 46% was covered by the European Emissions Trading System (EU ETS).
• Among commercial power plants and combined heat and power plants, 116 million tonnes of CO2 (88% of all emissions from this sector) were covered by the ETS. For heat plants, the figure is 57%, with 6 million tonnes of CO2 covered by the ETS in 2020.
• 81% of industry was covered by the ETS - 50 million tons of CO2.

• 80.64 euro/t CO2 was the weighted average price of CO2 emission allowances on the primary market (EEX, at the end of 2021).
• A dynamic increase in EUA prices was observed in 2021 by 51 euro/t CO2 (+272% y/y).

• The Polish budget gained PLN 25.56 bln from auctions of CO2 emission allowances (EUA and EUAA). This is PLN 11.5 billion more than in 2020.
• PLN 60.37 billion – total budget revenue in Poland’s 10 years of activity on the primary CO2 market.

Electricity prices

• At the end of 2021, for the first time in years, the wholesale price of electricity in Poland was not among the highest in the region. Only in Sweden in the second half of the year was it cheaper.
• The post-pandemic rebound has pushed natural gas prices to record levels, affecting the wholesale price of electricity in many European Union countries.
• Despite the high prices of CO2 emission allowances, the cost of electricity production in Polish units was lower than in foreign ones. This resulted in the highest electricity exports in years.

• For years, electricity prices for households in Poland have been among the lowest of the neighbouring countries.
• Including all taxes and levies, the price of electricity in Poland in the third quarter of 2021 was 15.3 eurocents/kWh.
• The price of electricity for households is shaped by many factors, most notably government tax and regulatory policies. It is not a simple reflection of wholesale energy prices on the exchange.

• After deducting VAT and all recoverable taxes and levies, the price of electricity for industry in Poland was 10.79 eurocents/kWh.

Power sector fuels

Most data ends in 2020 due to the late publication of GUS reports for the previous year.

• In 2020, steam coal imports totalled 11 million tonnes - 2.2 million tonnes less than in 2019.
• 82% of imported steam coal came from Russia. Other import destinations were Colombia (8%), Kazakhstan (8%), and Australia (1%).
• In 2020, 2 million tonnes of steam coal were exported. The main customers were Czechia (59%), Slovakia (11%), Germany (11%), and Austria (9%).

• In 2020, both coal production and consumption were lower than in previous years.
• Consumption was 63.5 million tonnes (5.3 million tonnes less than in the previous year), domestic production was 54.7 million tonnes (7.4 million tonnes less), and net imports were 8.2 million tonnes (4.1 million tonnes less).
• In contrast to previous years, domestic production and net imports were approximately equal to consumption in 2020.
• In previous years (2018 and 2019), coal (mostly domestic) was stockpiled.

• 55 million tonnes of hard coal was mined domestically in 2021.
• Compared to last year, production increased by 0.3 million tonnes.

• In 2020, natural gas imports (both pipeline and LNG) totalled 17.4 bcm, the same as in the previous year.
• About 55% of the imported natural gas came from Russia. Other import destinations were Germany (21%), Qatar (13%), and the USA (6%).
• In 2020, 1.4 bcm of natural gas was exported. Practically the only customer was Ukraine (98%). The remaining 2% of exported gas went to Germany.
• LNG imports accounted for 22% (3.8 bcm after regasification) of all imported gas fuel. The main suppliers were Qatar (60%) and the USA (26%).

 

• In 2020, the upward trend in natural gas consumption continued, with high-methane gas responsible for the increase. Nitrogen-rich natural gas consumption remains stable at 3.7-3.8 bcm.
• Total natural gas consumption was 20.9 bcm, of which high-methane gas was responsible for 18.4 bcm.
• The increased consumption was not associated with an increase in production or net imports (which fell by 0.6 bcm to 15.5 bcm ), so inventories had to be reduced by 0.5 bcm to close the balance.

• Domestic production of high-methane gas is declining slightly. In 2020, 2.7 bcm were extracted, with 62% coming from minig and the remaining 38% from transformation output or returns.
• Domestic production of nitrogen-rich natural gas did not deviate from the long-term trend. In 2020, 3.7 bcm were produced, with 96% coming from mining and 4% from transformation output or returns.

• 45% of the energy consumed in Poland comes from coal: 36% from hard coal and 9% from lignite.
• 88% of final energy consumption is covered by fossil fuels.
• Renewable sources provided 7% of energy, with as much as 5% from biomass (wood). Water energy, photovoltaic, wind energy, geothermal, and ambient heat covered 2% of energy needs.
• Over the decade, there is a decrease in the share of coal (-8 p.p.), an increase in the share of oil (+3 p.p.) and natural gas (+5 p.p.). The share of wood remains stable.

• The largest consumer of gas in Poland is industry, which in 2020 was responsible for 40.2% of domestic consumption. For years, this sector has been responsible for 40-43% of demand.
• A decrease in the share of gas in final consumption was recorded only in transport (-11% y/y) and among other customers (-23% y/y).
• The largest increases in the share of gas were recorded in agriculture (+16% y/y), electricity and heat production (+8% y/y), and households (+6% y/y).

• The largest consumer of steam coal is the electricity and heat production industry, which was responsible for 71.1% of domestic consumption in 2020. For years, this sector has been responsible for 70-74% of total demand.
• Transport (-25% y/y), electricity and heat (-10% y/y), and industry (-10% y/y) saw the largest declines in their share of final consumption.
• Only households and agriculture (+2% y/y each) saw an increased share.

• Since mid-2021, an historically unprecedented rise in energy commodity prices, especially natural gas, has been observed.
• Natural gas futures contracts rose by more than 500% y/y on the Polish exchange, while the European TTF index rose by more than 570% y/y.
• Strong increases in natural gas prices were felt most strongly in Europe. The U.S. Henry Hub index also rose, but on a very limited basis.
• Coal became more expensive on the broader European market, while it became cheaper on the Polish market. ARA API2 recorded a dynamic increase (to 38 PLN/GJ). The Polish index in 2021 was on average PLN 0.5/GJ cheaper than in 2020.

Energy transition in Poland | 2022 Edition
Date of publication: may 2022
Elaboration: Marcin Dusiło, Forum Energii

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