At the end of June, the informal Council of Experts on Energy Security and Climate published a position paper on the need to update the assumptions of Poland’s Energy Policy until 2040, so that they correspond to the current situation in Europe and the escalating energy crisis. In today’s article, we look at the proposed recommendations and see if there is already a place for hydrogen.
The energy crisis is a crucial challenge for the European Union
Escalating from the war in Ukraine, the energy crisis in Europe is a non-negotiable issue. It is not without reason that the conflict across our eastern border is referred to by many as an energy war. The heavy dependence of European countries on imports of raw materials from Russia, as well as the unhurried efforts directed at the development of renewable energy and diversification of sources in most of them, resulted in dynamically rising energy and oil prices, which hit not only businesses but directly into the pockets of citizens.
Hardly surprising, for years importing relatively cheap raw materials from Russia was the most profitable for Poland and other European countries. As a result, plans to decarbonize and increase the share of RES in the energy mix took shape slowly and primarily from the perspective of long-term strategies.
Recent months have opened our eyes and shown us how strong dependence on imported raw materials is hitting the internal energy security of the country and the entire European energy system. The heavy impact of the crisis is being talked about not only in Poland, whose energy needs are almost half met by fuels imported from abroad. Since early June, there have also been talks of problems in Spain, which was struggling with the beginning of the crisis even before the Russian invasion began. According to the consulting firm Iberinform, about 20% of liquid fuel stations operating in Spain are currently facing the prospect of bankruptcy, and a total of as much as ca. 60% are in arrears on financial obligations related to price increases. The step taken by the Spanish government to combat the crisis is a reduction in electricity prices for end-users, which was approved by the European Commission in early June. It is to be achieved by subsidizing some €6.3 billion to reduce the cost of energy production at fossil-fuel-fired power plants.
The energy crisis in Poland – Recommendations of the Expert Council on Energy Security and Climate
The growing effects of the energy crisis make it necessary to intensify action in Poland and revise and update the assumptions of the current energy policy, to ensure energy security and protect end-users from the effects of the most difficult period in the energy industry in recent years.
At the end of June, the Expert Council on Energy Security and Climate released a position paper, indicating recommendations for updating Poland’s Energy Policy until 2040. The short- and medium-term perspective was particularly emphasized. As the Council points out, given the seriousness of the fuel situation and the deepening uncertainty about the stability of gas, coal, and oil supplies, it is becoming crucial to coordinate actions on various levels – reducing demand, improving energy efficiency, and reducing the exposure of economic sectors to fossil fuels.
Recommendations in the short term
The recommendations address eight key areas: energy efficiency, renewable energy sources, grid development, industry, heating, fossil fuels, analytics and data, and financing. The following section will outline the most important of these.
1. Energy efficiency
Within the area of energy efficiency, it is recommended to urgently revise the Long-Term Building Renovation Strategy adopted in February this year which assumed 236,000 thermal upgrades per year in the 2020-2030 perspective. It becomes necessary to accelerate its pace, as well as to increase the share of deep thermal upgrades and reform support programs. In addition, it is recommended that public campaigns for energy conservation awareness be implemented, as well as programs for personnel formation and support mechanisms for the provision of services by energy suppliers.
2. Renewable energy sources
In this area, we meet some of the most important recommendations, since, as experts rightly point out, it is RES that largely responds to the need to achieve the independence of energy systems and ensure the country’s energy security. According to analyses of the PSE Grid Development Plan, in 2030 at least 50% of net electricity demand should come from renewable sources. To make this possible, we need modifications in RES permitting, where planning processes at the municipal level would designate dedicated areas where permitting processes would be expedited. Among the priorities, experts also mention increasing targets for offshore renewable energy and completing energy market reform, which will in effect facilitate the integration of RES and the construction of energy storage facilities. It is also becoming important to increase the share of renewables in heating.
3. Development of electricity grids
In this area, DSOs should be required to revise grid development plans for renewables, energy storage, and electromobility. In the short term, they should propose solutions to issues related to unblocking connection capacities for RES and define criteria for granting connection conditions. The regulatory environment is to require companies to take into account so-called off-grid solutions for solving local grid balancing problems.
4. Industry
The need for the sector to become more involved in the energy transition, including by unlocking barriers to RES development (by liberalizing restrictions on wind power construction and easing investment procedures), developing voluntary and paid demand reduction programs, or clarifying regulations and defining the terms of the PPA framework agreement.
5. Heating and district heating
With soaring fuel prices and emission permits, there is a risk of financial instability. Experts point out that in such a case, expansion of district heating operations to provide thermal comfort and energy management services should be pursued. Financial mechanisms, including a guarantee fund, are important for successful implementation. In addition, experts have indicated the need to ban the installation of conventional fuel boilers in newly constructed buildings by 2026 (per REPower EU).
6. Fossil fuels
According to the Council, in the short term, it will be necessary to make cost-effective use of the existing coal-based generation infrastructure. In doing so, however, they stress, that the outlook for the use of coal must be updated so that the current crisis does not become an excuse to delay the transition to zero-carbon. Gas, on the other hand, is to be treated only as a supplementary fuel, so it is necessary to limit its use in heating, industry, transportation, and power generation.
7. Analytics and data
Another key recommendation is the creation of a transparent information platform through which the public would be kept informed about gas and coal stocks and the value of contracts. Such a platform would minimize speculation and, as a result, panic among the public.
8. Financing
Among the Council’s recommendations in the area of financing was a call for the urgent allocation of all funds flowing into the state budget from the sale of EU ETS allowances for low-carbon investments, reducing the share of fossil fuels, and supporting vulnerable consumers. In addition, the various sources of funding should be coordinated and complement each other.
Energy crisis and transition goals
The crisis we are facing means that, especially in the short term, Europe is being forced to revise assumptions and adapt current energy policies and goals to the dynamic situation. All this is to protect end-users from the risk of further costs and energy supply interruptions, especially during the end-of-year period. With the prospect of surviving the first such difficult autumn and winter, it is not easy to think about ambitious decarbonization goals, including, among others, increased use of RES or hydrogen as a new fuel and energy storage. These, however, are the ones that are ultimately supposed to contribute to strengthening national economies as energy sovereigns vis-à-vis the changing situation in the European and global markets, and thus guarantee energy security.
Learn more by reaching out to the full list of recommendations from the Expert Council on Energy Security and Climate: https://rada-energetyczna.pl/stanowisko-rady-w-sprawie-zalozen-do-pep-2040
