2022 was another year of unexpected events. Russia’s full-scale invasion of Ukraine changed Europe’s approach to fossil fuel imports, particularly from Russia. The resulting energy crisis triggered by high gas prices and the decline in nuclear and hydroelectric production led to record high energy prices across Europe. These events are changing the way European countries look at the energy transition. Meanwhile, the modernisation of the Polish energy sector is still very slow. An overview of the increasingly comprehensive data on the energy sector is published by Forum Energii in the sixth edition of the report ‘Energy Transition in Poland. Edition 2023’.
This year's edition analyses not only the electricity sector but also the energy balance of the economy as a whole, which remains highly energy-intensive and increasingly dependent on fossil fuel imports. Now that Russian supplies have been cut off, these supplies are from new, often politically uncertain sources. As commodity prices rise, the need to import fuels translates into huge financial transfers from Poland. In 2022, it spent a record PLN 193 billion on energy materials. A year earlier it was around PLN 100 billion.
Contrary to popular belief, 2022 wasn't a renaissance of coal in the power industry. Domestic thermal coal production is declining year on year, and the shortfall is being made up by increasing imports of the raw material, which reached almost 17 million tonnes last year. Coal supply constraints, its high price, and the declining availability of coal-fired power plants have led to a 6% decline in hard coal generation compared to 2021. At the same time, unprecedented high gas prices have forced the output of gas-fired power stations to be reduced by a quarter. The growing demand for electricity is met by renewable energy sources. In 2022, production from photovoltaics increased by 4 TWh (+102% y/y) and from onshore wind farms by 3 TWh (+19% y/y).
The security indicators for the Polish energy system are deteriorating year after year. The level of reserves is falling and last year it was 1.4 GW (about 6%), the lowest in seven years.
‘This year, the government should prepare an update of the PEP (Poland’s Energy Policy) and the NERP (National Energy and Climate Action Plan). These documents should not only respond to the current situation but also should be subject to public consultation—this was always the case in the past, but now there is no willingness to discuss. This is particularly important now when we can see the turning point in the Polish energy sector. Without consultation, the document will be perceived as unreliable, especially in the context of the elections,’ said Dr Joanna Mackowiak-Pandera, president of Forum Energii.
At the moment, there is a lack of realistic energy targets to motivate market players to make investments that are sufficient to meet the growing demand and the conventional capacity that is being phased out. Investors must be mobilised to limit the costs of the transition to society, which are now particularly high.
‘It is crucial that the government, when updating the energy policy and the National Energy and Climate Action Plan, takes a holistic view of the energy balance of the whole economy from the point of view of energy demand. Questions need to be asked: how much coal, gas, oil do we (Poland) need, not just in the power sector itself, but in the whole economy—industry, services, households, heating? It is clear that we can reduce their use through energy efficiency and renewable sources’, said Dr Pandera.
Taking a holistic view of the country’s energy balance is all the more important as Poland has not made any progress in reducing greenhouse gas emissions for years—in fact, they are increasing. Last year, Poland’s CO2 emissions increased by 0.3% compared to 2021. As a result, the country ranks 7th in the world in terms of unit emissions of the entire economy, with a result of 2.84 tonnes of CO2/toe—only slightly lower than the worst emitters China, Malaysia, and Kazakhstan.
Access to reliable and verified data is essential for proper planning of the energy transition. That is why this year’s edition of the Forum Energii report ‘Energy Transition in Poland’, with a new chapter structure, collects key and unique data that allow us to look at energy across the economy from a broad perspective: through the prism of its consumption in individual sectors, energy carriers, generation sources, prices, emissions, and import dependence. The report’s conclusions point to one thing: the energy crisis overlaps a political decision-making crisis. Many projects are waiting to be implemented. Meanwhile, the security parameters of the system continue to deteriorate.