The need for energy transition stems from many factors such as: aging of the existing generation and network infrastructure; the aim to ensure fair and competitive energy prices; and environment and climate protection. In all these areas the climate-neutrality objective is a serious impetus for change.
EU targets for greenhouse gas (GHG) emissions reduction, share of renewable energy sources and energy efficiency were adjusted to the new political reality framed by the ongoing climate crisis, unfinished post-pandemic recovery and the large-scale war in Ukraine. In that context I would like to stress that it was good that many actors in the EU recognized that energy sources could be easily weaponized and that a more collective approach towards building resilience by, for example, the phaseout of the dependency on imports of fossil fuels from Russia and building local supply chain is a must. Incidentally, we must be careful not to become dependent on other countries, especially China for raw materials, components and technologies. Thus, there is the need to strengthen the implementation of objectives of the Net Zero Industry Act and the Critical Raw Materials Act by building long-term technological independence and local supply chains, but this will also require a change in the approach to purchasing procedures and the broader application of the non-price criteria.
Polish energy transition path
Poland has made remarkable efforts to reduce GHG emissions, which required multibillion investments. The reduction of GHG emissions in electricity generation sector from 2005 to 2022 was 25 percent. The share of coal in electricity production has significantly declined over the past two decades. Renewable energy sources have witnessed unprecedented growth, with installed capacity more than doubling since 2020 (from 12.5GW in 2020 to reach approximately 26GW in 2023). Photovoltaics have been the driving force behind this surge, with installed capacity increasing from less than 0.3GW in 2018 to around 15GW in 2023. Onshore wind farms also play a significant role, contributing a capacity of 9GW. However, rapid development of renewables, especially rooftop PVs is a challenge for the distribution grid operators while the grid is becoming the main bottleneck in the further RES development. Year after year the number of approvals for connection to the grid has been increasing, but the number of refusals has been growing as well, because the number of households eager to invest in a PV installation is still growing. I believe that this issue is common for the entire Europe, but just to give you an illustration, in Poland, in years 2017/18 there were less than 300 refusals issued, and in years 2021/22 more than 3,400, which translates in missing 37 GW of the RES capacity only for those two years. According to the Polish officials — about 60-80 percent of requests for connection are being refused due to limitations of the distribution network, which shows why distribution grid is a key to effectively implement the new 42.5 percent EU renewables target.
We need a stable regulatory framework: less legislation, more implementation.
From plans to action
Offshore wind farms will soon play an important role in the Polish power system. It is forecast that in 2030 their installed capacity will reach 5.9GW and, 10 years later as much as 18GW. There are several nuclear projects being developed by the state-owned companies and the private ones with the initial goal of having the first reactor operational in the 2030s. Poland’s minimum target is to have at least 6-9GW of nuclear energy by 2040. The goal is to achieve deep technological diversification, and for carbon free sources (RES and nuclear) to represent almost three-quarters of the energy mix by 2040. Also, the district heating sector is moving away from coal by replacing it with low and zero-emission solutions based, for example, on power-to-heat, which could serve an important role in balancing power system based on variable renewables generation and manage surplus of RES energy, which could not be accommodated by the power system in certain periods of time by transforming it into clean heat. This direction has been rightfully recognized in the new Renewables directive.
Transmission and distribution grids must be strengthened and adapted to new challenges.
What’s next for energy?
The ambitious goals of the European Green Deal will not matter if they are not implemented, and that is where we should focus now. The new climate target for 2040 cannot mean another revolution in the just-agreed acts adopting the 2030 targets. We need a stable regulatory framework: less legislation, more implementation. The new European Commission and the European Parliament should try to carefully fill legislative gaps. To ensure that we have enough electricity for electrification of the hard-to-abate sectors, further development of RES and nuclear is necessary. At the same time, we must invest in the reliable capacities that will ensure security of supplies, such as nuclear power plants and energy storage. Producing electricity is one thing, but delivering it to consumers is another. Transmission and distribution grids must be strengthened and adapted to new challenges. We need to simultaneously increase the flexibility of the power system and to invest in the grid infrastructure.
The scale of the transition is huge and requires gigantic investments. In the Decarbonisation Speedways study, Eurelectric estimates annual investment in the EU-27 and the U.K. for the period 2020-2050 at €100 billion in electricity generation and €69 billion in distribution. In case of Poland investment outlays for new generation capacities exceed €156 billion, and for the development of network infrastructure another €107 billion. These investments must be financed not only from the energy companies’ own sources, but also from increased EU funds. In addition, the permitting process — including environmental permits — should be optimized to ensure timely implementation of investments. Furthermore, decision-makers must take into account the priority of ensuring the energy security, stable energy supplies and energy prices acceptable to consumers.