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Impact assessment of climate policy on Poland's power sector

Author

Listed:
  • Tadeusz Skoczkowski

    (Warsaw University of Technology)

  • Sławomir Bielecki

    (Warsaw University of Technology)

  • Arkadiusz Węglarz

    (Warsaw University of Technology)

  • Magdalena Włodarczak

    (Warsaw University of Technology)

  • Piotr Gutowski

    (Polish National Energy Conservation Agency)

Abstract

This article addresses the impact of the European Union Emissions Trading System (EU ETS) on Poland’s conventional energy sector in 2008–2020 and further till 2050. Poland is a country with over 80% dependence on coal in the power sector being under political pressure of the European Union’s (EU) ambitious climate policy. The impact of the increase of the European Emission Allowance (EUA) price on fossil fuel power sector has been modelled for different scenarios. The innovation of this article consists in proposing a methodology of estimation actual costs and benefits of power stations in a country with a heavily coal-dependent power sector in the process of transition to a low-carbon economy. Strong political and economic interdependence of coal and power sector has been demonstrated as well as the impact caused by the EU ETS participation in different technology groups of power plants. It has been shown that gas-fuelled combined heat and power units are less vulnerable to the EU ETS-related costs, whereas the hard coal-fired plants may lose their profitability soon after 2020. Lignite power plants, despite their high emissivity, may longer remain in operation owing to low operational costs. Additionally, the results of long-term, up to 2050, modelling of Poland’s energy sector supported an unavoidable need of deep decarbonisation of the power sector to meet the post-Paris climate objectives. It has been concluded that investing in coal-based power capacity may lead to a carbon lock-in of the power sector. Finally, the overall costs of such a transformation have been discussed and confronted with the financial support offered by the EU. The whole consideration has been made in a wide context of changes ongoing globally in energy markets and compared with some other countries seeking transformation paths from coal. Poland’s case can serve as a lesson for all countries trying to reduce coal dependence in power generation. Reforms in the energy sector shall from the very beginning be an essential part of a sustainable transition of the whole nation’s economy. They must scale the power capacity to the future demand avoiding stranded costs. The reforms must be wide-ranging, based on a wide political consensus and not biased against the coal sector. Future energy mix and corresponding technologies shall be carefully designed, matched and should remain stable in the long-term perspective. Coal-based power capacity being near the end of its lifetime provides an economically viable option to commence a fuel switch and the following technology replacement. Real benefits and costs of the energy transition shall be fairly allocated to all stakeholders and communicated to the society. The social costs and implications in coal-dependent regions may be high, especially in the short-term perspective, but then the transformation will bring profits to the whole society.

Suggested Citation

  • Tadeusz Skoczkowski & Sławomir Bielecki & Arkadiusz Węglarz & Magdalena Włodarczak & Piotr Gutowski, 2018. "Impact assessment of climate policy on Poland's power sector," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 23(8), pages 1303-1349, December.
    • Handle: RePEc:spr:masfgc:v:23:y:2018:i:8:d:10.1007_s11027-018-9786-z
    DOI: 10.1007/s11027-018-9786-z
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    References listed on IDEAS

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    2. Miroslav Variny, 2022. "Comment on Rogalev et al. Structural and Parametric Optimization of S-CO 2 Thermal Power Plants with a Pulverized Coal-Fired Boiler Operating in Russia. Energies 2021, 14 , 7136," Energies, MDPI, vol. 15(5), pages 1-5, February.
    3. Guorong Chen & Changyan Liu, 2023. "Can Low–Carbon City Development Stimulate Population Growth? Insights from China’s Low–Carbon Pilot Program," Sustainability, MDPI, vol. 15(20), pages 1-22, October.
    4. Cenjie Liu & Zhongbao Zhou & Qing Liu & Rui Xie & Ximei Zeng, 2020. "Can a low-carbon development path achieve win-win development: evidence from China’s low-carbon pilot policy," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 25(7), pages 1199-1219, October.
    5. Sylwia Mrozowska & Jan A. Wendt & Krzysztof Tomaszewski, 2021. "The Challenges of Poland’s Energy Transition," Energies, MDPI, vol. 14(23), pages 1-22, December.
    6. Marta Bottero & Federico Dell’Anna & Vito Morgese, 2021. "Evaluating the Transition Towards Post-Carbon Cities: A Literature Review," Sustainability, MDPI, vol. 13(2), pages 1-28, January.
    7. Sławomir Bielecki & Tadeusz Skoczkowski & Lidia Sobczak & Marcin Wołowicz, 2022. "Electricity Usage Settlement System Based on a Cryptocurrency Instrument," Energies, MDPI, vol. 15(19), pages 1-35, September.
    8. Sławomir Bielecki & Tadeusz Skoczkowski & Lidia Sobczak & Janusz Buchoski & Łukasz Maciąg & Piotr Dukat, 2021. "Impact of the Lockdown during the COVID-19 Pandemic on Electricity Use by Residential Users," Energies, MDPI, vol. 14(4), pages 1-32, February.
    9. Qi Sun & Qiaosheng Wu & Jinhua Cheng & Pengcheng Tang & Siyao Li & Yantuo Mei, 2020. "How Industrialization Stage Moderates the Impact of China’s Low-Carbon Pilot Policy?," Sustainability, MDPI, vol. 12(24), pages 1-23, December.
    10. Skoczkowski, Tadeusz & Verdolini, Elena & Bielecki, Sławomir & Kochański, Max & Korczak, Katarzyna & Węglarz, Arkadiusz, 2020. "Technology innovation system analysis of decarbonisation options in the EU steel industry," Energy, Elsevier, vol. 212(C).
    11. Malec, Marcin, 2022. "The prospects for decarbonisation in the context of reported resources and energy policy goals: The case of Poland," Energy Policy, Elsevier, vol. 161(C).
    12. Yoro, Kelvin O. & Daramola, Michael O. & Sekoai, Patrick T. & Wilson, Uwemedimo N. & Eterigho-Ikelegbe, Orevaoghene, 2021. "Update on current approaches, challenges, and prospects of modeling and simulation in renewable and sustainable energy systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 150(C).
    13. Maamoun, Nada & Kennedy, Ryan & Jin, Xiaomeng & Urpelainen, Johannes, 2020. "Identifying coal-fired power plants for early retirement," Renewable and Sustainable Energy Reviews, Elsevier, vol. 126(C).

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