Poland to subsidise newbuild power plants

19 May 2016, Week 19 Issue 810

The Poland government could buy up shares in the country’s state-run power generators in order to finance cleaner power plants and to upgrade existing coal-fired thermal power plants (TPPs), the energy ministry announced last week.

The four state-run companies – Enea, Energo, PGE and Tauron – mostly use coal but must now invest in clean coal technology in order to meet EU emissions goals.

Global pressure is escalating from various groups such as the European Union and the United Nations for countries to turn to other sources of fuel. The European Commission is targeting a 40% reduction in greenhouse gas (GHG) emissions by 2030, with Poland expected to make an even larger cut since its use of coal is a major contributor to carbon dioxide emissions.

The government signed the 2015 Paris Agreement in New York on April 22, but Energy Minister Krzysztof Tchorzewski reportedly said last week that Poland would not ditch coal by 2050.

Meanwhile, Reuters quoted Deputy Energy Minister Andrzej Piotrowski as saying that the state body that oversees government subsidies for renewable energy would have the right to acquire new shares in power companies.

“The instrument, which would allow Zarzadca Rozliczen to buy securities, is aimed at helping the power producers in financing the construction of indispensable new power stations or modernisation,” Piotrowski said.

“This solution will provide various possibilities, including the purchase of power companies’ new shares or buyback. The final decision should be taken at the end of this year or at the start of next year,” he added.

The government clinched a restructuring deal for its coal-mining industry in April, getting cash injections from state-run power producers.

The Warsaw-based WISE economic think-tank reported at the end of 2015 that Polish mines had received roughly US$18 billion in state subsidies from 1990 to 2012.

“Poland can’t afford to keep subsidising coal to preserve jobs and mines,” said Grzegorz Wisniewski, the head of Institute for Renewable Energy, another Polish think-tank, last December.

Edited by

Richard Lockhart


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