With around 95% of its electricity generated from coal, Poland comes up higher in coal statistics than Australia, the US, South Africa or even China. The coal intensity of electricity generation in Poland is not only a legacy from the past, but also a conscious choice of consecutive Polish governments. As the most abundant energy resource in the country, coal is considered an important pillar of Poland’s energy security. Polish Energy Policy until 2030, a document published in 2008 by the Ministry of Economy, states that:
“National resources of hard and brown coal play an important role of energy security stabilizers”.
And yet, despite the central position of coal for the energy sector and the environmental pressure from Brussels, there is little enthusiasm for carbon capture and storage (CCS) technology among Polish decision-makers and energy sector stakeholders (see 1 April 2010: Poland and CCS). Even though Poland is hosting one of the six CCS demonstration projects financed by the European Union through the Economic Recovery Plan, strategic government documents envisage merely one or two CCS demonstration plants through to 2030 and there is no mention of deployment once the technology is demonstrated.
Given the carbon intensity of Poland’s electricity mix, weak CCS policy could not only prevent Poland from reaching its climate targets, but also prove harmful for electricity consumers and the energy security of the country. A 2008 report by New Carbon Finance, The impact of auctioning on European wholesale electricity prices post-2012, warns that status quo within the electricity generation in Poland could lead to a 150% increase in electricity prices. To prevent this from happening, Poland needs to consider introducing low-carbon technologies now. As a coal-rich country with relatively modest sunlight, little wind and no experience with nuclear power, Poland could turn to CCS for its low-carbon electricity generation. Difficult political relations with Russia, the biggest supplier of natural gas to Europe, constitute an additional argument in favour of a sustained use of coal in Poland and reinforce the case for clean coal technologies such as CCS.
Stronger support for CCS could bring many benefits to electricity consumers and to the Polish economy, not to mention the country’s carbon footprint. And still CCS is not considered a top priority by the decision makers. Instead, the technology is often dismissed as costly, inefficient and immature. This criticism is usually based on four myths, which are addressed below in an attempt to show that Polish energy policy is still in need of a clear direction and that CCS could be the right way to go.
Myth 1- Nuclear power can solve Poland’s energy problems
According to Polish energy policy targets, nuclear power should account for 15% of electricity produced in 2030. The first nuclear project is expected to add 3GW to Polish generation capacity in around ten years and another nuclear power plant is planned shortly after that. This will allow for greater diversification of energy resources, but it will not provide enough electricity to fill the emergent electricity generation gap. Since 60% of the entire electricity generation capacity of the country needs to be replaced by 2030, nuclear projects planned by the Polish government only represent a quarter of the replacement needed. Political vision and guidance are needed for the remaining three quarters of investments to take place within this essentially, state-driven energy market. CCS should be part of this vision.
Myth 2- CCS is too expensive
When compared to other low-carbon energy technologies, CCS comes out as a cost competitive option. While carbon capture and storage is still an expensive technology, its costs are expected to go down as more experience is gained from demonstration projects and technological progress allows more efficient CO2 capture. If the technology develops according to the expected learning curve, coal-fired power plants with CCS will generate electricity at a competitive cost in comparison to gas-fired power stations or wind turbines. The International Energy Agency (IEA) states in its 2010 report Projected Costs of Generating Electricity that generating electricity from natural gas and from wind now costs €70/MWh and €110/MWh respectively, while electricity from coal-fired power plants costs €45/MWh. This is without CCS. In 2008, the IEA’s report CO2 capture and storage – a key carbon abatement option forecast that the additional cost associated with CCS technology for coal-fired power plants could be €23 per MWh. So coal power plants with CCS could generate electricity for only €68/MWh, which is less than gas power plants or wind turbines. In addition, the necessary capturing of CO2 from gas power plants will further increase the competitiveness of coal as an energy resource in the future.
Myth 3 – CO2 cannot be stored in Poland
Poland has exceptionally favourable conditions for storing CO2 (R. Tarkowski, 2008). This is also the case in Germany, France and Denmark. According to European Commission data, Poland has enough storage capacity to store CO2 from the widespread deployment of CCS within its energy sector. The only issue identified so far is that CO2 from emission points, situated mainly in the south and in the central part of the country, will have to be transported to relatively distant storage points (European Commission, ‘CCS directive – Impact Assessment’, 2008). However, this challenge can be overcome with the existing technology and the European Commission is already working on a European CO2 transport network, which could significantly decrease the overall cost of transporting CO2.
Myth 4- Poland cannot be a CCS leader
Some people argue that Poland does not have enough resources to excel in CCS. However, even without being home to large energy companies, a country can envision itself as a CCS champion. In a speech in the House of Commons, the former UK secretary for energy and climate change, Ed Miliband, said he expected 50,000 jobs to be created within the next 20 years in the UK thanks to CCS technology development. This activism on CCS came in the midst of a severe economic crisis in a country that is not home to any of the European energy giants. The UK’s example proves that there should be no obstacles stopping Poland from aspiring to become a leader in CCS technology.
Perhaps, instead of proving that there are no barriers to Poland’s success in CCS, it is more important to put emphasis on what could ease Poland’s position as a CCS front-runner. In fact, with its long term tradition in mining engineering and research, as well as its coal mining industry, Poland has got the right know-how and the energy context needed for clean coal technologies to thrive.
Weak CCS policy in Poland – possible explanations and impacts
One of the major obstacles to CCS development in Poland is that the Polish energy sector is still predominantly state-owned. Electricity prices continue to be centrally regulated and there is little competition among electricity suppliers. This makes Polish electricity generators less responsive to carbon pricing. Climate change scepticism also exists on the political level, making it very difficult for appropriate mechanisms to be established to support low carbon technologies. So, neither the market nor policy framework is helping to push CCS forward.
Although there is no active opposition to CCS in Poland, technology scepticism is present and adds to the climate change disbelief. As a result, many people within the Polish energy sector and Polish NGOs advocate a wait-and-see attitude towards CCS. They argue that Polish electricity generators should wait until CCS is demonstrated and then buy the technology for national deployment. Such a development would be great for companies and countries that have been investing in CCS, but a disappointment for the Polish economy.
However, the above scenario is still not the worst possible scenario for CCS in Poland. In the absence of any political signal in favour of clean coal technologies, unabated gas-fired power plants might emerge and lead to a gradual substitution of the Polish coal industry. This would be bad for Polish energy security and also four times as high in carbon terms than CCS.
The waiting game is not an effective policy to achieve either energy or environmental objectives. If Poland waits too long, there is a risk that it will be too late to keep coal as a vital source of energy, energy security will have been compromised and the opportunity to make the obvious choice and become a technology leader in the development of CCS will have passed.
Aleksandra Tomczak is a Policy Officer at the World Coal Institute.