Transition of Poland’s Energy Sector: A Work in Progress

 Poland is the second largest producer of coal in Europe after Germany. Since coal plays an important role in the energy sector, the topic of energy transition to clean energy can be controversial. Besides coal there are also other fossil fuels used as a source of energy in Poland. Having coal as a natural resource makes Poland less dependent on energy from Russia than other countries in the European Union (Ćwiek- Karpowicz, p.1). In 2018, energy production in Poland was estimated for 2650 PJ, comprising 57.9% of hard coal, 18.1 % of lignite, 5.5 % of natural gas, 1.6% of crude oil and 16.9% of renewables. The amount of consumption for that year was 4500 PJ and following that 50% of it was from hard coal and lignite (trade.gov) Recently we can see growing demand for gas in Poland. Domestic production significantly decreased and Poland needed to import natural gas. Russia benefited as the principal exporter of gas to Poland, but  provided less than 50% of Poland’s domestic gas needs, so Poland decided to make a deal with the United States (trade.gov).

When Poland became a member of the European Union in May of 2004, there was more pressure to meet European standards of energy sufficiency. Ecology became one of the most important contemporary issues with increased awareness that fossil fuels are a depletable resource, and that renewables are a more sustainable source of energy. Renewable energy sources are readily available in Poland and are becoming more popular. One  prevalent form of renewable energy in Poland is wind power. The attractiveness of wind energy started with the 2005 amendment of the Energy Law Act, which separated trade in electrical power from trade in “green certificates”, which allows energy producers to earn income from two sources instead of one.  This means that energy delivery companies are appointed as the last resort and are obligated to  purchase electricity from renewable energy sources. On the other hand, “Green Certificates” are certificates which can be converted into property rights and can be traded in power exchanges (Stawicki, p.214-215). If Poland focused on energy renewables it could have a positive effect on energy security and efficiency.

In the past, Poland imported natural gas and crude oil from Russia at a reasonable price because two of the energy routes to Germany passed through Poland. In 2011 and 2012 a new oil terminal was created in Ust-Luga, and Russia was able to directly transport its resources to Western Europe bypassing Poland. This had a negative effect on Poland’s energy security as Russia can  cease exporting to Poland at any time (Ćwiek-Karpowicz, p.2-3). Because Poland shares a difficult history and complicated relations with Russia, the former tried to find other suppliers of natural gas, like Norway, to minimize its dependence on Russian energy resources from the 1990s until 2004, but it was without success. In 2005, this changed because of internal and external developments. Internally, the process of securitization had an influence on energy policy, and with a new president, energy security became a priority for the Polish government. Externally, in 2004 the Yamal-Europe gas pipeline was surprisingly turned off for a day due to  problems between Russia and Belarus. But this was not the end of the Kremlin’s weaponization of natural gas. In 2005 Germany and Russia signed a contract for the North European Gas Pipeline which avoided transit through Polish territory. An additional problem was a conflict between Russia and Ukraine which also led to a reduction in supplying some of the EU countries (Wyciszkiewicz, p.18-19). These reasons forced Poland to think about energy security as a top priority, and to plan energy efficiency improvements.

A new contract between Poland and U.S. companies called Polish Oil and Gas Company (PGNiG) and Venture Global Liquified Natural Gas (VGLNG). Polish Oil and Gas Company (PGNiG) is the leader in Polish natural gas market which also provides heat and electricity to Polish citizens. The contract is to purchase 1.5 million tons per annum of liquefied natural gas, and the beginning of the operation is expected for the year 2023. This agreement will help Poland become less dependent on energy resources from Russia, and Poland will receive 3.5 million tons of LNG for a competitive price (VG LNG). A contract like this will have an impact on Polish policies as Poland will become more independent from Russia regarding critical resources provided for its citizens at home.  The downside is that LNG is far more expensive than natural gas.

Another important step which qualitatively will improve energy resources in Poland was the Strategic Agreement on U.S.-Poland Cooperation Towards Developing Poland’s Civil Nuclear Energy Program which was signed in October 2019 between the U.S. and Poland. This Agreement will be valid for the thirty years from 2019 and is intended to give Poland the promise about long-term relations with the U.S. In the Polish government’s opinion, Poland and its businesses will benefit from that project as this will give the opportunity for the country to have clean energy and also will help develop energy security supply apart from its dependence on natural resources from other neighboring countries. This project is intended to meet the long-term goal of improving Poland’s economic growth, geopolitical security and technology (energy.gov). 

Europe is trying to decarbonize its economy by the year of 2050, and forecasts show this goal is achievable. In Poland, by the year 2030 it is possible to reduce power emissions by approximately 40%. There are two ways to achieve this, and the first one is a technology mix which would be less expensive than nuclear by using only a carbon price scenario based on carbon capture storage, which could be built easier.

The second option is a Technology Support scenario. This option would focus on renewables and increasing carbon price. Renewables are safe and there are less possibilities for unpredictable accidents (Zorlu, p.2).

The transition of Poland in the energy sector and its security is going in the right direction to implement energy policy changes. There is a high demand for changes in Poland and all countries of European Union as pollution is a collective problem. In order to have a better future for other generations and a more sustainable planet, countries need to take action and make changes in their energy sector and CO2 emissions which have a tremendous impact on our environment.

by PAC Intern Paulina Rezendes

References

75. (n.d.). Poland – energy sector. Retrieved March 08, 2021, from https://www.trade.gov/country-commercial-guides/poland-energy

LNG, Venture Global. PGNiG and Venture Global LNG Agree New Purchase of 1.5 MTPA of LNG, 12 June 2019, www.prnewswire.com/in/news-releases/pgnig-and-venture-global-lng-agree-new-purchase-of-1-5-mtpa-of-lng-803106968.html

Ćwiek-Karpowicz, J. (2012). Poland’s energy security: Between German nuclear phase-out and energy dependency from Russia. International Issues & Slovak Foreign Policy Affairs, 21(1-2), 44-55. Retrieved March 5, 2021, from https://www.jstor.org/stable/26590308

Stawicki, A., & Kulczyk, W. (2010). Poland: Changes in the Supporting Scheme for Renewable Energy Production in Poland. Renewable Energy Law and Policy Review, 1(2), 214-217. Retrieved March 6, 2021, from http://www.jstor.org/stable/24324862

Wyciszkiewicz, E. (2009). Polish Perspective on the EU’s Energy Policy and the Security of External Supply. International Issues & Slovak Foreign Policy Affairs, 18(1), 15-28. Retrieved March 5, 2021, from https://www.jstor.org/stable/26591211

Wyrwa, A., Figórski, A., & Gula, A. (2004). POLICY INSTRUMENTS FOR SUPPORTING ENERGY EFFICIENCY IN POLAND. Energy & Environment, 15(2), 261-270. Retrieved March 5, 2021, from http://www.jstor.org/stable/43735485

Zorlu, P. (2013). (Rep.). E3G. Retrieved March 6, 2021, from http://www.jstor.org/stable/resrep17931

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Paulina is a junior majoring in International Relations with a minor in Political Science at Loyola Marymount University.

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