Page 14 - Poland Outlook 2022

4.4 Energy and power

Poland’s energy transformation is facing another turbulent year in 2022, as the
country’s coal-fired power generation fleet will come under more pressure from
the EU’s climate policy, the emissions trading system EU ETS in particular.
Already in 2021, the spiking cost of carbon dioxide emissions – a major cost
component in coal-based generation – proved a headache for Poland’s
state-controlled utilities, which hiked power prices for households by an
average of 24%.

Companies are in for even bigger increases, as, unlike households, they have
to pay market prices. Poland’s power generation structure could also become
an ever bigger problem in terms of foreign investment, as companies are more
and more keen on entering markets with a less obsolete energy mix, i.e.
dominated by renewables with gas or nuclear as base load, rather than coal.

That said, progress is expected in Poland’s offshore wind programme, which
assumes that electricity from turbines in the Baltic Sea should start flowing in
the mid-2020s. Elsewhere in the renewable sector, solar power installations
are expected to keep adding new capacity despite some regulatory moves
weakening the incentive to invest in solar panels for households. Companies,
however, will remain interested in solar power as a means to replace at least
some of the coal-based electricity and gain partial independence from the grid.

Poland should also affirm the planned location of its first nuclear power plant
on the coast of the Baltic Sea after picking it preliminarily in December 2021.
That development should be followed by picking a technology provider from
the US, France, or Korea – the three countries bidding to participate in
Poland’s nuclear power programme, worth an estimated PLN150bn (€32.7bn).
The nuclear project’s going from paperwork to securing a deal with a
technology provider is going to be the single most important energy
development in Poland in 2022 (assuming no delays).

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