Poland Shuns Gas in New Energy Plan as Coal Makes a Comeback

(Bloomberg) -- Poland's plan to quickly cut down on coal as its main electricity fuel may take longer than expected as the country seeks to limit its investments in gas-fired power units.

The European Union's most coal-reliant nation intends to increase the usage of power plants fired by the dirty fuel “in short- and mid-term,” the State Assets Ministry said in an emailed response to questions from Bloomberg News on Tuesday.

Gas, which was supposed to be the transition fuel on the country's path to nuclear and renewable energy, will make way. The commodity's prices in Europe jumped and fluctuated wildly in the last few months as the EU seeks to reduce its dependence on supplies from Russia after it attacked Ukraine.

“It's unjustified to build that many gas-fired units at a time when high and unstable gas price affect the Polish economy,” the ministry said. “It doesn't mean there won't be any new gas units -- there will just be fewer of them than planned before the Russian invasion of Ukraine.”

Coal Carve-Out

The EU's biggest economy outside the euro area, which uses about 70% of coal for its electricity generation, had earlier sought to cut the share of coal to as little as 37% in 2030 and 11% in 2040. Gas was to fill the void as Poland had sought to boost its consumption by about 50% to 30 million cubic metres annully.

The government is yet to update these numbers. It only reiterated it won't be using coal beyond 2049.

On Monday, PAP newswire cited the State Assets Minister Jacek Sasin as saying that the country may aim to extend the 2049 deadline. The ministry's spokesman Karol Manys told PAP on Tuesday that there's no such plan.

Poland's government, which views the EU's climate strategy as too ambitious and too costly, has retained its plan to switch to cleaner energy as it aims to build offshore wind farms and construct its first nuclear plant in the next decade.

As part of its new energy policy, the government has also kept its earlier plan to carve out coal-fired assets from state-controlled utilities and move them to a new state agency NABE.

“Creating NABE fits perfectly into the current situation,” the ministry said. “Changes to the energy policy don't impact the plan whatsoever.”