Common-sense approach needed for EU energy reform

Stock SectorJune 4, 20189min11
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Access to safe, sustainable and cheap energy is a dream of all European Union member states, and also a goal that Poland is steadfastly seeking to accomplish. Turning this idea into reality may not, however, take place without taking into account the specifics and conditions of the individual regions.

Several weeks ago, I spoke to an inhabitant of a Western European country who had not visited Poland for a long time. He admitted that he was shocked when he got off the plane.

  • Poland is investing heavily on clean technologies and electromobility, says Filip Grzegorczyk, CEO of Tauron Polska Energia. (Photo: TAURON Group)

The visitor explained that he had perceived Poland as a poor, disadvantaged country, with the majority of its population being blue collar workers – and this was the image he expected to see. Instead, he observed a modern airport, smoothly-paved roads and well-developed infrastructure.

Poland, in recent years, has been experiencing a period of strong social and economic growth, leading to great strides in innovations.

But the perception of our country worldwide is still far from the reality.

An example of people’s misperception is Poland’s energy sector. It has been perceived as a bastion of outdated ways, reluctant to accept, and resisting the “inevitable” changes that the West has introduced so willingly.

Energy security based on local resources

Such thoughts are a mistake – the technologies applied in Poland are in no way different from the ones used by the rest of the European Union. Poland’s fuel mix is aimed at ensuring the security of power-supply based on the use of local resources.

We are boldly investing more and more in renewable energy sources and modern technologies in the energy sector.

This is worth emphasising, especially at a time when the EU is conducting an intense discussion of the Winter Package that may have a significant impact on the shape of the European energy sector.

Clear evidence of the changes introduced in Poland, among others, is our steady ascent in country rankings for growth of renewable energy sources.

We are ranked seventh in Europe for installed capacity of wind farms. The value of wind-based installed capacity increased 70 times between 2005 and 2017, according to the Polish Electricity Association.

The share of coal in Poland’s energy mix is steadily declining. As recently as 2010, coal accounted for approximately 85 percent, in 2016 it dropped to 81.5 percent, and last year it dropped again to 79.5 percent. By 2050, the share of coal in Poland’s energy mix is estimated to be about 50 percent.

Clean energy technologies to electromobility

TAURON Group has been working on developing clean energy technologies and implementing trailblazing solutions for many years.

At the end of last year, the number of micro-installations connected to our distribution grid reached 9140, with a total capacity of 56 MW; 132 installations classified as small installations (40-200 kW) with a total capacity of 14 MW; and 237 larger installations with the unit capacity of more than 200 kW and a total capacity of more than 913 MW.

Our organisation owns four wind farms with more than 100 turbines generating electricity and the total capacity of 201 MW, and it is operating 34 hydroelectric power plants equipped with 85 turbine sets with the total capacity of 133 MW.

TAURON is also preparing for the future – investing in electromobility, co-developing the Electromobility Poland project with the goal of building a Polish electric vehicle.

In the heart of Poland’s most heavily industrialised region, Katowice, we will be developing a network of electric vehicles charging stations and a car-sharing service.

EC solely betting on climate solutions

When analysing the Winter Package provisions, even cursorily, one can see that the European Commission is placing its bets solely on climate solutions, meanwhile the issue of security of electricity supply, which should be a priority, is unfortunately marginalised.

In the draft Regulation on the Governance of the Energy Union, the monitoring of energy security-related issues, which was the raison d’etre for forming the Energy Union, is being placed on the back burner.

It is supposed to provide the backdrop for showing progress in the decarbonisation process or the Renewable Energy Sources (RES) expansion.

But such sources do not represent any of the pillars of the Energy Union, in contrast to the security of electricity supply, energy efficiency improvements, innovations and raising competitiveness.

Actions to be implemented as part of the Winter Package, related to decarbonisation or market development (share of cross-border connections, superregional institutions impacting the market, introduction of dynamic tariffs (prices) and increased role (empowerment) of energy consumers), are to solve the problem of ensuring the security of electricity supply. However, without special measures – aimed at ensuring and maintaining the security of electricity supply – full implementation of this scenario will depend on the reliability of electricity supply.

Common sense approach

TAURON Group supports a common sense approach. The three vertices of the energy triangle – climate, security of electricity supply and market – should be balanced.

It is untrue that Poland is against renewable energy sources. Investments made in recent years and a strong growth of this sector demonstrate that our country is doing its best to become a European leader in this area.

The effort we are undertaking is enormous and it is bringing results, but we cannot afford to support such a fast growth of RES as outlined in the Winter Package.

Furthermore, we must ensure we have backup capacity in order to prevent disruptions of electricity supply. For example, a two-day blackout could undermine the foundations of any reform.

Also, the regulations cannot be used to exclude any technology. This is true in case of the EPS 550 standard that is dramatically reducing the possibility of coal technologies being supported by the capacity market mechanisms.

This is not only Poland’s problem. Today we are speaking with the same voice as other Central and Eastern European countries.

The accomplishment of the goals of the Winter Package is possible in the case of Poland, but only over a longer period of time.

We want to undergo an energy transformation and we will implement it. But we need more time to implement changes in the power sector.

Filip Grzegorczyk is CEO of Tauron Polska Energia.

Disclaimer: This article is sponsored by a third party. All opinions in this article reflect the views of the author and not of EUobserver.

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