Tuesday, August 16, 2022

HomeFinancePKEE: appropriate support mechanisms are required to boost energy transition

PKEE: appropriate support mechanisms are required to boost energy transition

The Polish Electricity Association (PKEE) said to fully support the REPowerEU plan to phase out the dependency on fossil fuel imports from Russia. However, according to PKEE’s press statement, we cannot forget about the different starting points of the Member States and substantial differences in how intermediate targets can be achieved.

For example, in recent years, Poland made a significant effort to diversify its gas imports by investing in developing gas infrastructure and securing gas supplies from various sources. The country is consistently modernising the district heating systems and developing the trigeneration potential. However, in large-scale district heating systems in Poland, the only available option is to switch from coal-fired sources to high-efficiency cogeneration units based on natural gas, since alternative possibilities (such as electrode boilers) can be implemented in specific circumstances only.

Thus, storage capacity development will play a crucial role in energy policies in many countries, including Poland. The PKEE fully supports the proposal to consider storage assets as being in the overriding public interest and facilitate permit-granting procedures for their deployment. The Association suggests that the above apply to all energy storage technologies, including pumped hydro storage plants. It is necessary to facilitate the implementation of this type of investment also within the framework of state aid rules.

“We, therefore, believe that stand-alone electricity storage should be treated as energy infrastructure within Guidelines on State aid for climate, environmental protection and Energy – CEEAG also after 2023,” reads the press release.

“Due to the different starting points and specific energy mixes, the costs of the energy transition are still unevenly distributed across the individual Member States,” continues the press statement. “To ensure energy security and stability of the market, appropriate support mechanisms are required to boost energy transition.”

According to the Energy Policy of Poland until 2040 costs of transformation of the Polish energy sector will reach around 200 billion euros which significantly exceeds the total amount of the currently available national funds and EU funds for decarbonisation. Therefore, PKEE members will have to incur further significant costs of investments in new generation capacities and operating costs.

For the PKEE, the REPowerEU plan is an opportunity to seek a more accurate key for the allocation of EU funds to ensure that coal-reliant Member States have sufficient resources for transformation, considering that the geopolitical and market circumstances directly affecting the functioning of the energy market in the EU have changed. Development of renewable energy sources (RES) in the most vulnerable Member States should be additionally fostered, for example, via EU ETS-based instruments like the Modernisation Fund. For the PKEE, the proposal to release a certain number of allowances from the Market Stability Reserve (MSR) to finance post-pandemic recovery is a step in the right direction. However, these additional funds should be mainly allocated to transition in the Member States which face the greatest challenges, to mitigate the results of the current geopolitical crisis.

Sign up to our biweekly newsletter


    Most Popular