Poland’s energy transition is progressing, and 2023 was a year of real records. Although coal remains the main source of electricity production, its share in the mix fell to an all-time low of 60.5%, down 10 p.p. from a year earlier. Production from RES reached 27% for the first time. At the same time, energy production from natural gas increased, by more than 40%. This is a result of falling fuel prices and the flexibility of gas generation. Wholesale energy prices in Poland compared to other EU countries remain very high, and the economy’s dependence on imported fossil fuels is growing rapidly. In the latest, seventh edition of the “Energy Transition in Poland” report, Forum Energii presents the state of transition play and a broader look at the overall process.

Wind power is playing an increasingly important role in Poland's electricity system. Onshore wind farms are expected to become the second source in the electricity production mix this year, overtaking lignite. And as early as 2026, the first terawatt-hours from offshore wind turbines in Poland's Baltic region will be added to the Polish mix. In a new report by Forum Energii, we outline the state of the game: whether offshore will be launched on time, how to improve processes so that investments are made without delays, and how to realize the real potential of offshore wind energy on the Polish coast. 

In October 2023, the European Union adopted a revision of the directive promoting the development of renewable energy, setting new, higher targets for the community. In Forum Enegrii's report "Understanding EU's and Poland's Renewable Energy Goals", we analyze how the EU targets translate into the realities of Poland and other EU countries.

At the end of December, one of the last power market auctions took place. Under this form of state aid, contracts so far concluded have been for nearly PLN 90 billion (nominally), which will be repaid until 2044. Financing for them comes from electricity consumers, in the average household electricity bill, in which the power market fee accounts for about 7%. This mechanism, although costly, allows maintaining capacity in the power system. So far, however, it has mainly generated subsidies for existing and new coal and gas-fired power plants. The eighth auction turned out to be different from the previous ones: it was decentralised, clean, cheaper and battery-based. Instead, there is no new generating capacity.

Poland’s new coalition government has declared a new opening in energy policy and offers much more ambitious transition goals, although the details of which are yet to be worked out. One of the first tasks of the new government is to propose a series of climate and energy strategies. Polarised opinions, attempts at disinformation, and political tension will make creating these guiding documents quite difficult. The preparation of the country's new energy and climate policy should be underpinned by sound analyses to justify the choices made. A council composed of the country's leading experts should be established to be a substantive voice in the process.

The new government has a long list of decisions to make. Neglected power plant repairs, the poor condition of distribution networks, an unfinished project to spin off coal assets, and a declining mining industry. On top of that, there is downward pressure on electricity prices. Each of these areas requires immediate decisions and large amounts of money.

To lead an effective energy transition, you need not only regulations, but also good, modern computing tools. The world is changing rapidly - the winner will be the one who is able to plan strategically, but also react to changes and minimize costs. In order to meet these challenges, the Energy Forum, together with Enercode, has taken on the task of building an open energy model that will support the planning of the modernization of the Polish energy sector, taking into account the acceleration of the development of renewable energy sources.  

The development of renewable energy sources is one of the most urgent needs of the Polish energy system. RES lower energy costs, reduce emissions and increase energy security. However, although energy companies, industry, local authorities and individual consumers are interested in investments in RES, the further development of new, emission-free energy sources has been a challenge. One of the main problems is the denial of connection capacity to new RES investments. In addition to the necessary grid investments, a more efficient use of the existing infrastructure is needed to solve this problem. One of the tools available is cable pooling - enabling the interconnection of RES sources.

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’.

If Poland does not come to an agreement on the NRP in the coming months - it will be too late for sensible spending of the money available to the country. By the end of June, the Polish government may present to the European Commission changes to the spending plan for the National Recovery Plan - completed with investments to increase resilience to the energy crisis. Consultations with the EC are just starting. This is the last bell for Poland to reach for loans and grants under the the Recovery and Resilience Facility and the REPowerEU plan. How to change the Polish NRP to make it a practical response to the energy crisis?