Polish ministries clash over support for biomass co-firing

WARSAW (Reuters) - Poland's treasury, which controls the country's top utilities, has criticized a draft renewables law written by the Economy Ministry in the latest sign of tension over support for green energy in the coal-dependent economy.

The economy ministry had in July proposed a draft bill assuming a decline in support for biomass co-firing, which involves mixing wood and other plant material with coal before it is burnt in power stations.

If enacted, the new law would make biomass co-firing unprofitable, the Treasury said in a comment sent by e-mail, adding Poland would not meet the European Union's renewable energy goals if it changed its support rules.

Central and eastern Europe's largest economy, which generates 90 percent of its electricity from coal, is required by the European Union to reduce carbon emissions and to generate at least 15 percent of its power from renewables.

Biomass co-burning is the largest source of renewable power in Poland's energy mix, as local utilities PGE, Tauron and Enea have in the past few years upgraded their coal-fired installations in their green energy drive.

In 2011, biomass co-burning provided 3.1 TWh of power in Poland, out of a total output at 163.2 TWh. Wind power contributed 2.2 TWh and hydropower 2.0 TWh.

The economy ministry argues that the consumption of biomass in coal-fired power stations, which shot up from 1.7 million metric tons in 2006 to 5.1 million metric tons last year, is not economically viable, because of high costs of imports.

The draft renewables law had earlier drawn criticism from Poland's wind power lobby and the country's top utility PGE.

(Reporting by Maciej Onoszko; Editing by David Holmes)