New wind turbines, new photovoltaic panels, and gas-fired power stations have been built in Poland for many years. But we can have more of them and more of the energy they produce. To a large extent, this may result from the capacity market.

Funds obtained from this source will create opportunities to wisely finance the modernisation of Poland’s power sector. “The transformation of the sector will take a while. We need money and time” – explains Professor Filip Grzegorczyk, PKEE Vice – President & CEO of Tauron Polska Energia.

Why does Poland need a capacity market?

This is an opportunity to acquire new funds for financing the transformation of the power sector in Poland towards green energy. We all know that changes take huge investments. The capacity market revenues may effectively support a wise and true transformation of the power sector towards Renewable Energy Sources. First and foremost, it is a chance to assure the security of energy supply for Poland.

Who will most benefit from this solution?

Tightening of emissions standards and additional EU regulations without a support system for Poland could negatively affect the financial standing of the sector and thus its abilities to transform. Lack of transformation would affect the availability of energy and in consequence Poland’s energy supply security and energy prices – at the expense of consumers. Expensive energy would drive Poland’s population towards energy poverty.

What is Poland’s power sector like today?

Unfortunately, in many countries, Poland is still viewed through stereotypes. And in fact, our country is changing and it is doing so very fast. We have done huge work on modernisation of the power sector. Over recent few years, Poland’s energy mix has changed significantly. Today, we have 80 percent of electricity coming from coal, but relatively recently it was 99 percent. Poland, and that includes the Tauron Group, wants to continue transforming the power sector. We are betting on evolution, not revolution. We want to keep building gas-fired installations, wind farms, hydroelectric power stations, photovoltaics, and to participate in energy clusters. The funds obtained from the capacity market will help us in achieving the ambitious climate targets in a realistic time-frame.

Will Poland completely get rid of the coal-fired power stations?

With every passing year, the share of the RES in meeting our energy demand is increasing. Poland is consistently growing its installed RES capacity: we are building wind farms, expanding photovoltaics and biomass. Unfortunately, over the next 15-20 years, there is no chance to balance the electricity supply and demand purely with renewable sources. At the moment there are no technical possibilities for increasing renewable sources without adequate coexistence of controllable conventional sources and significant investments in the grids.

The European Union is very much looking after the natural environment and attempts to eliminate all factors adversely impacting the climate.

RES alone are not able to provide Poland with security of energy supply also due to, to a large extent, the uncontrollable nature of their operation. This is why we cannot abandon coal completely. But the Polish Minister of Energy has announced that the last new build coal generating unit will be Ostrołęka. Tauron is completing the construction of a unit in Jaworzno. In both cases, we are talking about state of the art power stations where the adverse environmental impact of solid fuels will be minimised. They will replace the obsolete units.

We are just ahead of important talks at the EU level that will influence the form of the capacity market. What are your expectations of them?

The European Parliament, the Council and the Commission should find a fair compromise taking into account the different starting points and the fundamental principles of the Single Energy Market. All Member States of the European Union should enjoy equal treatment. That is why we are objecting to the approach of the European Parliament to Article 23. According to this position, the German strategic reserve would be exempt from the EPS 550 emissions limits. To me, it is a double standard. In my opinion, the Polish capacity market, already recognised by the Commission, for its correct operation and for achieving the goal it was designed to achieve, should be exempt from the EPS 550 (e.g. until 2030 for the existing capacities) or be subject to derogations (until 2025 for the new build capacities). I also expect assurance of the acquired rights for the capacity contracts concluded before the date of entry into force of the Capacity Regulation.

Where do you see Poland’s place in this European leaders’ group?

Poland is among the strict leaders concerning the countries effectively transforming their power sectors. We are doing a great deal to keep our power sector changing and adapting to the challenges of modernisation. We are reaching for the most modern solutions. But the transformation takes time and money; money that we may acquire with the capacity market to conduct this modernisation.