Source: O Energetice Date: 29.04.2020 Author: Jana Červinková
According to PGE, Polish energy companies on their way to achieving climate and energy targets would not have become "green" without EU support, but would have gone bankrupt. Achieving the target of reducing greenhouse gas emissions by at least 50% is not possible due to technical, economic and social obstacles, the company said.
According to the Polish state-owned company Polska Grupa Energetyczna (PGE), the cost of reducing greenhouse gas emissions by 55% by 2030 for the entire Polish energy sector will amount to EUR 68.5 billion (approximately CZK 1.87 trillion). The amount includes, among other things, the investments needed to replace coal-fired units. However, companies with a high share of fossil fuels in their portfolio risk going bankrupt if the EU does not provide sufficient support.
However, PGE said that implementing targets with higher ambition should not lead to companies going bankrupt. Individual member states should set their own interim climate targets, the firm said. However, the climate legislation includes powers for the Commission to assess national action to achieve climate targets every five years.
2030 means tomorrow in the energy sector
Achieving net zero emissions by 2050 would then require significant investment. For the Polish electricity sector, PGE estimates these investments at €179-206 billion (approximately CZK 4.9-5.6 trillion). The most vulnerable regions and sectors should not face the huge challenge alone.
The European Commission's draft climate legislation lacks important details on plans to share investment costs across the EU in line with the solidarity principle, according to PGE. Of greatest concern to PGE are the proposals to radically increase the 2030 target. This would mean changing the Polish electricity sector virtually "overnight".
"Available analyses show that increasing the 2030 climate target will require an accelerated shift away from coal and massive replacement of current generation capacity in the Polish power sector, mainly due to the increased price of CO2. This is not realistic for us from a technical, economic and social point of view. If we take into account the length of the investment process in our sector, 2030 is tomorrow." Wojciech Dabrowski, CEO of PGE
According to Poland's largest opposition party, however, achieving net zero emissions in Poland in 2050 is realistic. In 2019, nearly 80% of Poland's electricity was generated from coal. PGE itself generated 88% of its electricity from coal. While it has announced investment strategies in renewables, it is still building new coal-fired power plants. It is currently building a 490 MW unit at Turow.