Although in financial terms the energy sector does not seem to constitute the basis of the economy, in fact it determines its functioning and may decide whether it enjoys a success or suffers a defeat. The present Part is dedicated to an analysis of the prospects for the development of this sector in Poland and the possible options of its transformation in the timeframe to 2050. The aim of the analyses presented here is to dispel the many myths which have grown round the Polish energy sector with regard to the feasibility of transforming the Polish energy sector following the pattern of transformations of this sector which unfolded in the past and still continue to take place in the other OECD countries.. Thus, we look at both the coal-based, nuclear and gas-based energy, or renewable sources, comparing all the costs – both direct and indirect, internal and external – of the alternative changes in this sector, taking into account the global technological trends in this sector and the specific Polish conditions.
In the first section, we present a picture of the Polish energy sector in 2013: the main mechanisms of its functioning, the domestic and external factors which shaped its development in the past, including the trends which characterised this sector over the last twenty years. At the same time, we consider the internal effects of the energy generation process and their impact on Polish society. The point of reference here is the European Union, since our country tries to gradually catch up with the environmental, economic and institutional standards which are characteristic of the other Member States of the Community. Having outlined the conditions in which the sector operates, we formulate two alternative pathways for its future development which provide a point of departure for future analyses.
The second section deals with the international experiences in the range of transformations of the energy sector. It is particularly important for us to show the background to these changes, the key factors affecting decisions and the problems which the countries dependent on a single energy source had faced in the past when a crisis made it more difficult or more expensive to acquire it. All over the world, one can already look in vain for undiversified technology mixes in the electricity sector, although still forty years ago this was not the case. We explain why this has happened and what conclusions can be drawn from this for Poland. We present the global trends in the development of coal-based, nuclear and gas-based technologies, and, above all, renewable energy sources, which we will use to explain the purpose and logic of the modernisation measures proposed farther in this Part.
The axis of the subsequent section is the presentation of the Polish energy sector. First, we present the reference scenario, which to a large extent provides for the continuation of the present energy policy of our country. The continued dependence on coal has its advantages, but also its significant disadvantages, which we discuss in detail. The consequences of the coal-based pathway should be assessed in the light of the predicted changes in both the Polish economy and at the global level, for which we try to provide relevant arguments. Subsequently, we confront the reference scenario with several modernisation options, which we discuss in depth in another section. In the context of previously mentioned global and world changes, we seek an answer to the question as to how we can ensure Poland’s energy security, its international competitiveness and economic stability, which is not possible without guaranteed timely and undisturbed electricity supplies to houses, companies and industrial plants. We present a catalogue of electricity generation technologies from the point of view of risks which investors must be ready to face and we define the objectives which public policy must take into account if its intention is to responsibly shape the future energy mix in our country. We propose five transformation options which meet these assumptions, describing their strengths and weaknesses.
The last element of this part of the Report is an analysis of the costs and benefits of each of the modernisation options against the costs and benefits ensuing from the choice of the high-emission pathway. Following an introduction to the methodology for such an analysis, we present the different aspects of this choice, including the electricity generation costs, the energy prices for retail and industrial users, the emission intensity and other external effects of the functioning of the particular mixes. We show all of these results against the background of the reference scenario, to ensure a better understanding of the need for transformation in the sector. We indicate the consequences for the results which ensue from the emission charges within the ETS scheme as well as from our reduction ambitions embodied in the application of the CCS technology. These analyses lead to the conclusion that in a long term the continued domination of coal in the energy mix is an unviable solution, not only in environmental or economic terms, but also from the point of view of energy security, as well as in purely financial terms.