An costly dependancy: heavy coal handouts halt Polish vitality transition


Of their newest report, ClientEarth and economics think-tank WiseEuropa have zoomed in on public subsidies granted to Poland’s vitality sector. Their conclusions? The huge monetary assist, practically €1.6 billion per 12 months, doesn’t increase the event of inexperienced vitality. Most of it, conversely, goes to coal vegetation.

The report “Subsidies: a driving drive or obstruction for the Polish vitality transition?” presents all types of State help granted to the Polish vitality sector because it joined the EU, as much as 2023. The authors assessed State help mechanisms by way of their legality, prices, environmental results and affect on the transition in the direction of greener vitality.

“Regardless of politicians loudly promising to extend assist for inexperienced applied sciences, renewable vitality developments are largely omitted from the recipients checklist for subsidies. As a substitute, two-thirds of public cash yearly is spent on ‘typical vitality’, primarily coal,” mentioned Marcin Stoczkiewicz, head of Central and Jap Europe at ClientEarth.

Coal resides on borrowed time

The report leaves little doubt: the lifetime of Polish coal is artificially sustained by public cash. Between 2013 and 2018 alone, the nation spent as a lot as €6.8bn euros on bailouts to types of vitality Poland has historically relied on.

“This cash –  largely billpayers’ cash – may very well be higher spent. Coal-fired energy vegetation obtain subsidies massive sufficient to finance the development of two massive wind farms within the Baltic Sea,” provides Stoczkiewicz.

As a substitute, Poland continues supporting doomed coal vegetation. Solely in 2019, the nation’s largest and most polluting set up – Bełchatów Energy Plant – obtained as a lot as €114m in subsidies. That corresponds to about 10% of its complete income. As the facility plant has been burning biomass together with coal, it additionally benefited from funds for ‘inexperienced’ vitality. In keeping with the report, after 2020, the subsidies for Bełchatów Energy Plant will improve even additional.

This raises the query of how a lot cash needs to be sunk into fossil fuels after they’re now not economically viable.

Others subsidise smarter

This favouring of fossil fuels paralyses the event of renewables. Already underfinanced, they face a rocky highway to improvement in Poland. That is regardless of clear alerts from overseas exhibiting that it’s smarter to assist renewable vitality sources, not coal.

Because the report reveals, Poland – by way of GDP – allocates related sums to Germany and Nice Britain to its vitality sector, however with worse ecological results. Between 2012 and 2016, Nice Britain lowered its vitality emissions by half, and Poland by solely 10%.

“The prevailing assist mechanisms within the Polish vitality sector have maintained the established order within the business. Regardless of multi-billion zloty assist to coal, the very fact is that it nonetheless can’t compete in right this moment’s market,” mentioned Aleksander Śniegocki from WiseEuropa, co-author of the report.

“With out an replace of expertise and of enterprise fashions, the business will face stagnation. If authorities and companies usually are not proactive, we’ll watch typical vitality steadily shrink, producing excessive prices for shoppers with out the brand new, urgently wanted zero-emission vitality sources there to exchange it,” concludes Śniegocki.

In the meantime, the financial outlook for coal has gone from dire to not possible.

Traders raised the alarm over deliberate new coal plant Ostroleka C. The rising carbon worth and plummeting price of renewables threatened to make the plant a stranded asset. Regardless of securing a degree of state funding, the plant has newly been branded a ‘stranded asset’ as co-owner Orlen mentioned it will solely go forward as a fuel undertaking and unique sponsor firms Enea and Energa then cancelled the partially-built coal plant.

The Covid-19 disaster has slashed the worth of EU coal nonetheless additional.

The report is offered without spending a dime obtain from the ClientEarth’s doc library.

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