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Electricity bills will rise by more than 800 PLN, or nearly 50%, by 2030 if Poland continues to generate energy from coal, according to a new report by the Instrat Foundation. However, if electricity came mainly from wind and solar, bills would be 20% cheaper than continuing to rely on coal, despite the need for greater investments in the grid.

Experts have calculated that thanks to switching the energy sector to renewable energy sources (RES), Polish families would be left with PLN 500-780 more in their wallets in 2030-2040 than if they consumed electricity produced from coal.

Instrat’s report juxtaposes a scenario raising the ambition of RES development with the government’s Polish Energy Policy 2040 (PEP2040), which assumes only 32 percent of RES in the electricity mix. The ambitious RES development rate proposed by Instrat is more than 70 percent of RES in electricity production in 2030, which is shown to be achievable and, in addition, in line with EU climate goals. Such developments will require spending on grid infrastructure and incurring additional system costs. In the years 2021-2040, investments in distribution grids will have to increase from the PLN 180 bn announced by the network operators to PLN 238 bn in the Instrat scenario and in transmission grids by PLN 10 bn. This will not burden household budgets, however, as tariffs will be more affected in the coming years by the huge costs of maintaining coal- and gas-fired power plants in line with government plans. The increase in system costs are compensated by significantly lower costs of energy from RES.

Some increase in electricity prices is inevitable, but it does not have to be monstrous. Households may save 500-780 PLN per year in 2030-2040 if the government listens to experts and unlocks renewable energy sources. Further dependence of the economy on fossil fuels will cause the current high prices to rise. The only way to avoid this is to quickly change the structure of the energy mix to a greener one – says Paweł Czyżak, co-author of the report.

SECURITY OF SUPPLY

The implementation of PEP2040 means high energy prices, as well as the risk of a blackout, which, incidentally, has been taken into account in the government’s strategy. Indeed, in the PEP2040 scenario there is a potential gap in the power balance due to the decommissioning of obsolete coal-fired units while RES stagnates.

Any delay in the construction of a nuclear power plant and the implementation of gas projects will lead to power shortages. Only dynamic development of renewable energy sources will fill this gap – says Adrianna Wrona, co-author of the report.

Contrary to common fears, variability of energy production from renewable sources is not a threat to the balancing of the National Power System (KSE). With the energy mix structure proposed by Instrat, there are no moments of complete lack of energy production from wind and solar. What is more, these two types of RES could independently cover the entire demand for electricity for 47% of the time in a year.

The green mix will not increase energy imports either – by 2040 their volume will actually have decreased – almost by half compared to 2020. According to Instrat experts’ calculations, only during 44 hours of the year will temporary net imports exceed the currently recorded peaks, and the maximum load on cross-border links will remain at the current level. In the Instrat’s scenario, coal-fired units also help in balancing the power system, coming on line sporadically but allowing for reduced investment in potentially unprofitable new gas-fired power plants.

RECOMMENDATIONS

Instrat experts have prepared a set of recommendations that will protect consumers from the harsh effects of the government’s pro-carbon policy. To ensure energy security and counteract high energy prices, it is necessary to ensure, among other things, immediate unblocking of onshore wind energy development, timely implementation of offshore wind farms, stable growth of installed capacity in photovoltaics, incentives for the development of energy storage facilities and financial support for distribution and transmission grid operators (e.g. from EU funds). It is also necessary to update PEP2040 and National Energy and Climate Plan (KPEiK), taking into account current economic realities, available RES potential and market trends, and EU climate targets.

Key findings of the report:

  • Between 2030 and 2040, the annual electricity bill from clean sources would be several hundred PLN lower than for energy produced from coal;
  • Electricity bills for households will increase by over 800 PLN per year in 2030 in the coal scenario. The renewable energy sources scenario, which simultaneously assumes multi-billion investments in the grid, means prices lower by PLN 500;
  • In 2021-2040, investments in distribution networks must increase from the PLN 180bn announced by the operators to PLN 238bn in the Instrat scenario, and in transmission networks by PLN 10bn;
  • Implementation of the government’s PEP2040 threatens blackouts – acceleration of RES investments will help avoid energy supply problems after 2030;
  • With the energy mix structure proposed by Instrat, there are no moments of complete lack of energy production from wind and solar. For more than 4,000 hours a year (47 percent of the time), wind and solar could cover all electricity demand.

Contact:

Patryk Berus, Communications Manager, patryk.berus@instrat.pl, +48 519 466 422

Paweł Czyżak, Head of the Energy and Climate programme, pawel.czyzak@instrat.pl, +48 512 371 327

Adrianna Wrona, Energy and Climate Analyst, adrianna.wrona@instrat.pl, +48 690 160 945