Page 15 - Poland Outlook 2024

most probably – rising carbon prices, is going to leave Poland’s competitiveness at risk.
The remedy to the problem of coal weighing down on the Polish economy has long been clear: it is to accelerate energy investments in low-carbon generation so as to create a resilient mix of weather-independent generation – ie nuclear and renewables.
The new government has taken some steps to liberalise rules for onshore wind development (which did not come without controversy) and has pledged to continue the nuclear power project that the previous government had begun.
The construction of the country’s first nuclear power plant appears on track to start on schedule in 2026, with the completion date set to 2033.
Poland is also developing offshore wind power in a number of huge projects in the Baltic Sea. Those appear to be on track as well to go on-grid by 2030.
Poland also needs better lawmaking to fine-tune support for renewable technologies, massive investment in the national grid, and a well-devised strategy exiting coal – all challenges that the new government should take up this year or risk more delays in transforming Poland’s energy sector.
“High carbon-intensity [of electricity generation] may provoke an adverse chain reaction at the corporate level due to ESG risks,” ING warned, pointing to “blue-chip companies searching for a reduction of carbon content of final products or services in the entire supply chain”.
One of the paths forward for Poland is to use EU money and sustainable financing from the private sector to catalyse scaling up of energy investments. The new government has made unlocking the EU finds – which Brussels held up in the wake of the previous government’s tinkering with the judiciary – one of its top priorities.
“Because of high capital costs and long investment lead times in the energy sector, public money may crowd-in private financing, both bank lending and capital market instruments, such as green bonds,” ING wrote.
3.5 Construction
The Polish construction industry is entering the new year with cautious optimism, buoyed by the prospect of disbursements from the EU's Recovery and Resilience Plan, the EU’s post-pandemic recovery vehicle, known in Polish as KPO. The imminent release of these funds, coupled with increased investment by the General Directorate for National Roads and Motorways (GDDKiA), is expected to fuel growth in the energy and infrastructure sectors.
While the KPO will predominantly benefit the energy sector and the REPowerEU programme, which aims to accelerate the energy transition, other segments of the construction market are also poised for growth. The industrial and logistics sector, in particular, is expected to continue benefiting from the ongoing relocation of production chains from Asia to Europe.
The upcoming local elections – due in April – could dampen enthusiasm for a while, as local governments may be hesitant to announce tenders in the face of political uncertainty (although there will not be a shortage of promises of new investment during the campaign). Additionally, the still elevated inflation may restrain private investment.
15 Poland Outlook 2021 www.intellinews.com