Column: Poland primed for unlikely role as key energy transition test case

Energy crisis fuels 'burn anything' policy, raising health concerns in central Europe
Smoke and steam billow from Belchatow Power Station, Europe's largest coal-fired power plant powered by lignite, in Kleszczow, Poland October 20, 2022. REUTERS/Kuba Stezycki

LITTLETON, Colo., Feb 13 (Reuters) - Europe's most coal-heavy economy showed off its little-known green credentials in 2022 by boosting clean electricity generation to a record and cutting use of coal and gas, while still lifting total electricity generation to all-time highs.

The overall rise in power supplies in turn allowed Poland's heavy industry and manufacturers to sustain high output levels in 2022, and helped Poland's gross domestic product rise by a healthy 4.9% for the year, which was sharply more than the 1.9% expected growth rate of the broader European Union.

Poland vs Germany industrial production (Year-over-year)

The mix of higher renewable energy output and lower fossil fuel generation also helped the country lower overall power sector emissions in 2022 from the year before.

Poland electricity generation by source

That was a rare feat last year as the fallout from the Russia-Ukraine war forced utilities throughout the continent - including in key economic powerhouses Germany and France - to roll back the clock on emissions targets and burn more fossil fuels in order to sustain power supplies to businesses and households.


A 21.7% rise in wind power generation in 2022 from the year before was a major driver behind Poland's electricity expansion last year even as the country cut coal use by 2.7% and gas use by more than 20%, according to data from think tank Ember.

That jump in wind capacity pushed wind power's share to a record 11% of total electricity generation, and marked a more than 50% rise in wind capacity since 2018.

To be sure, the country's power system remains overwhelmingly coal-dependent, with coal providing 69% of total electricity in 2022.

However, that coal share is down from more than 85% in 2010, and nearly 95% in 2000, and the country is expected to roll out additional clean energy sources in the years ahead as part of broader pledges by European Union member states to curb emissions.

In particular, rapid growth in solar power capacity is expected, thanks to strong demand from households and small businesses for government-subsidised panels that have already propelled installed photovoltaic (PV) capacity up by more than 2,500% since 2018, and eaten into wind power's lead as Poland's primary source of clean energy.


As impressive as Poland's renewable energy expansion has been in recent years, energy transition trackers are more interested in whether the country can successfully retool its energy system away from Russia, which had been Poland's main supplier of imported coal, gas and oil products until last year's invasion of Ukraine curbed energy flows from Moscow.

Poland has been a vocal critic of Russia's invasion of Ukraine, and last year banned imports of Russian coal in the wake of Moscow's so-called special operations.

However, with domestic coal production rapidly declining due to ageing reserves and years of underinvestment in the sector, the country faced coal shortages in 2022 and has struggled to secure replacement supplies from other European coal producers such as Germany.

That forced Polish importers to bring in supplies from farther afield, with annual seaborne imports surging over 1,500% in 2022 to more than 6.7 million tonnes, according to ship tracking data from Kpler.

Poland thermal coal seaborne imports

Given how dependent the country's energy system remains on coal, traders expect Poland's coal imports from non-Russian suppliers to surge further in 2023. The country is on course to bring in a record 1.4 million tonnes this month alone, mainly from Colombia, Kpler data shows.

Such high coal import volumes suggest that the declining trend in coal use seen by Polish utilities last year may be about to reverse and push higher again.

But with global benchmark thermal coal prices holding well above the long term average, the high volumes come with a high price tag that Poland's government, businesses and households may be reluctant to bear for long, especially amid a worldwide push into renewables.

Until 2022, the country had been expected to remain tethered to its coal-heavy energy system for several more years.

Now, thanks to aggressive but widely supported government pledges to make its energy system more independent, Poland is fast emerging as one of Europe's most critical test cases for energy transition trackers in 2023.

The opinions expressed here are those of the author, a columnist for Reuters.

Reporting By Gavin Maguire; Editing by Sonali Paul

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Gavin Maguire is the Global Energy Transition Columnist. He was previously Asia Commodities and Energy editor.