Polish power plants should be placed in one bag, that is, in the National Energy Security Agency. why? – Coal assets are an increasing burden on state-owned energy companies – says Rafael Zasso, publisher of industry portal Wysokienapiecie.pl, in an interview with TVN24 Biznes. – Someone will have to pay for it and potentially be a recipient of the energy, adds Joanna Maykoviac Bandera, Head of Forum Energii Research Center.
On Saturday, Jacek Sassen, Deputy Prime Minister and Minister of State Assets, made an announcement A quick referral to the government’s energy restructuring project, which is to separate coal assets, especially power plants and many mines, from energy companies. The changes – as the Deputy Prime Minister said – are “massive” and “revolutionary” that will give state-controlled companies (PGE, Tauron, Enea, Energa) “a fresh breath – access to financing for new investments”.
Last March, Deputy Minister of Government Assets, Artur Soboy, announced that the new entity would be called the National Energy Security Agency (NABE).
National Energy Security Agency
– NABE is being created because coal assets – power plants and mines – are increasingly burdening state-owned energy companies – explains Rafał Zasuń, publisher of Wysokienapiecie.pl. “Hard coal mining has been unprofitable for a long time, except for Bogdanka,” he adds, and “lignite is still profitable, but that will change very quickly, because the EU’s more expensive CO2 emissions allowances and the Green Deal will push coal energy abroad.” energy. “”.
“Power generation from coal is becoming less profitable,” says Joana Maykoviak Bandera, president of the Forum Energii Research Center. He pulls down the energy companies that want to get rid of this part of the work, he confirms.
Unprofitable power plants and coal mines are not the only problem. It is not really easy for energy companies to obtain financing for their major projects. They have less and less cash of their own and are increasingly dependent on external financing, banks or investment funds, which no longer finance coal projects for financial and ideological reasons. This is a problem for energy companies. Hence the idea to create NABE – Maćkowiak-Pandera explains.
Banks are calling for a clear coal exit plan. If state-owned companies want to invest in renewables, in gas energy, they need money and in order to get money from banks for such an investment, they must present a clear strategy to abandon coal – says Zasso.
According to the expert, “NABE is an attempt to direct all coal-fired power stations to one entity in order to exempt energy companies, and at the same time keep these stations in the system, because they are still required.”
They run shorter and shorter because more and more electricity comes from other sources: the sun and the wind. Coal power plants are needed for several thousand hours a year. When it’s neither blowing nor sparkling, they have to act. However, they are working for a very short period to earn a living and he indicates that NABE will concentrate all of these assets, enabling the state to manage this entity – as intended by the project’s authors – and at the same time allowing the coal exit to be smoother and the state to control it more. .
It would significantly distort competition in the market.
According to Rafaei Zasso, “Establishing NABE could be a source of problems.” – Workers in power plants and mines do not want to move to a new entity because they realize that it will be a “death facility.” Kind of a hospice for coal-fired power plants and mines, where they would gradually die. At Tauron and PGE, trade unions have made it clear time and time again that they do not want to join NABE. He explains that the government does not want to enter into conflict with trade unions in the energy and mining sectors, so it will take a long time to convince them of this idea.
but that is not all. The entity that will buy all coal-fired power plants and all mines (only power plants really count, since mines are just an addition), will have 60 percent of the market. In my opinion, it will not be possible to convince the European Commission to create a single entity that would concentrate most of the energy generated in Poland. Zasso adds that it would be a drastic distortion of the competition in the market.
In his view, not only “negotiations on establishing NABE – with the European Commission and trade unions – will take a long time”, but also “will be a waste of time”. “Officials ‘time or managers’ time could be devoted to projects that Poland needs the most,” he says.
What about electricity prices?
Will the planned change by the government affect electricity prices? – Electricity prices will grow for many reasons, says Joanna Maykoviak Bandera.
Among other things, because we have to invest in new capabilities and networks, labor costs are rising. It is important to limit unexplained hikes – so we need to compete. Creating NABE is a step in the other direction. If all coal assets were included in a single entity, then the competitiveness of that market would be severely limited. This, he asserts, will lead to an increase in energy prices.
He explains, “As of this year, the coal-fired power industry receives 5 billion PLN per year as part of Market capacity“And because“ the cost of carbon dioxide emissions is rising, ”“ the $ 5 billion is really insufficient. – More and more money will be needed. The amount of support required may only limit the introduction of low-emission energy sources, free of carbon dioxide emissions. There is no such plan. Then? – the expert asks rhetorically.
In her view, the main questions now are: How does the government want to get rid of the coal assets and what will it replace it with?
I understand that the first step is to create NABE and transfer all assets there, but for this to happen with the existing law, it will be necessary to develop a path of transformation. We cannot give up coal in 2049 and for the next 30 years society will maintain those units of public money that no one wants. In any case, this cannot be done, because at that time they will collapse from their old age. Some are really collapsing, says Makowiak-Pandera.
He adds that so far 17 gigawatts of energy, more than half of the Polish coal system, are receiving subsidies, but they will be without it after 2025. – They are already taking losses despite subsidizing 5 billion Polish zlotys per year. After 2025, this assistance will not be allowed, so we need to think about how to ensure the security of energy supplies. What to replace the old carbon units. It is known that the costs of this subsidy are borne by energy consumers.
Slide also notes that “your electricity bills will go up anyway, because you’ll have to pay for the energy conversion that has to happen.”
It’s hard to say whether the government will decide to support NABE through some kind of consumer fee or directly from the budget – from our taxes. We will all pay for the maintenance costs of these power plants, for the energy conversion. There is no other way out. We have all paid for the power plants built in the People’s Republic of Poland. There is no other way to get away from coal. Only thanks to giving up coal can we get huge money from the European Union, which we won’t be able to use while remaining in coal, he says.
Businesses “Going Green”
According to Zasuń, “The NABE project will not win itself” and “must be supported by the state.”
– And the European Commission must be persuaded to do so – for the coal subsidy plan. In order to do so, a clear plan must be presented to move away from coal, and Poland has not yet done so. He is afraid to introduce himself so as not to disturb the miners. There are conversations all the time about what is called Social contract – He says.
He also cites the example of Germany, which has already submitted a plan to abandon coal by 2038. – Companies that shut down coal-fired power plants earlier will receive money from the state. The mechanism of such auctions can also be useful in Poland, but the European Commission wants it based on an auction, and not for the state to pay extra money for each power plant. If we put it all in NABE, who would be competing in these auctions? I’m not predicting the idea of NABE’s success, we’ll have a big mess – says Zasuń.
Maćkowiak-Pandera notes that “Polish energy companies have already announced that they are moving towards a green environment”. At the moment, they are focusing on two types of investments: renewable energy sources and cogeneration. Energy companies withdrew from the nuclear power plant project. They said they have no money and The state is responsible for building the cornAnd it is expensive and risky at the moment – he explains.
He adds that the state’s ownership of coal assets is “extremely costly and risky.” – So the state, we – the citizens, takes care of the maintenance of the most dangerous and difficult projects. In my opinion, there are other paths, but we do not use them, because behind that are large interest groups and a strong belief that it could not be otherwise. Someone will have to pay for it, and it is likely an energy consumer. It is not known if the energy-intensive industry will begin to evacuate from Poland – wonders the president of the Forum Energii.
– Deputy Prime Minister and Asset Minister Jacek Sassine stated that NABE is about removing the burden of coal from state-owned enterprises. This is a big development, recently this has been the burden of our treasure. However, placing the burden on state-owned companies does not mean placing the burden on society, as the expert believes.
Main Image Source: PAP / Marcin Bellecki