Poland should drop gas & embrace renewables, report urges
Poland's plans for new gas-fired power stations could end up costing taxpayers billions as well as making it impossible for the nation to reach net-zero emissions by 2050, a new report by think tank Carbon Tracker has claimed.
The report, named 'Poland's Energy Dilemma', has called for the country to replace its coal plants with renewable sources of energy and not gas, arguing that solar farms and wind turbines are already cheaper to build than new combined cycle gas turbine units.
Polish taxpayers will subsidise the construction of five new gas plants due to begin operation between 2023 and 2027 through guaranteed 17-year capacity market payments that will cost nearly €3.93 billion. The report finds that the plants are only economically viable because these payments are much more generous than capacity payments in other European countries.
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The five plants will have a combined capacity of 3.7 GW, more than doubling Poland’s gas power capacity. But the report finds that for Poland to achieve net-zero emissions by 2050 they would have to close after an average of just seven years, costing developers more than €175 million.
It also said that solar and onshore wind supported by battery storage is predicted to be cheaper than gas by 2025.
Poland currently relies on coal for around 70% of its energy production and has plans to double its existing gas-fired energy capacity by 2030. The country is taking the view that gas is a transition fuel to act as a bridge as it switches to nuclear and renewables.
Carbon Tracker has warned that as well as posing a threat to Polish energy security, pursuing the gas option could lock consumers into high prices.
"With wholesale gas market prices having reached record highs over the past 12 months and rising political tensions in Europe increasing the threat that supplies could be weaponised or placed under international sanctions, now is not the time for nations to be increasing their dependence on gas," the report said.
The report's senior analyst and co-author Jonathan Sims said: "Costs of clean technology continue to fall and by mid-decade solar and wind farms backed by battery storage will be able to provide flexibility services comparable with a gas peaker plant at a lower cost.
"Pursuing gas will cost taxpayers billions in subsidies and higher energy bills, undermine EU climate targets and expose the country to pressure from foreign gas suppliers," he added.
The report calls on Warsaw to cancel the new gas plants claiming that if they run for the planned 30-year lifespans, it would be impossible for Poland to meet net-zero by 2050. Conversely, if they are retired early in line with climate targets, developers will face heavy losses and could launch compensation claims against the government.
It said that overly generous capacity payments are distorting the market and plants would not be built without them, adding that taxpayers could be locked into subsidising projects that might struggle to run their full lifetimes, arguing that funding would be better spent to accelerate investment in renewables.
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On the role for gas, the report argued that this would be better used as backup power supporting renewable energy - something that would be better served by smaller-scale peaking units than large CCGT plants.
Associate Power Analyst and report co-author Lorenzo Sani said: "This note aims to dispel the notion that Poland has little choice but to switch from the use of one fossil fuel to another for its power supplies.
"It attempts to persuade policymakers to grasp the immense opportunities available to the country in the lower cost and lower risk renewables sector. We highlight the extreme risks to investors of long-term gas plant investment."
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