Plans for five new gas-fired power plants could cost Polish taxpayers billions, says a new report.
Poland’s plans for a new generation of gas-fired power plants would make it impossible for it to meet net zero emissions by 2050 and cost taxpayers almost 4.5 billion US dollars, research by think tank Carbon Tracker has revealed.
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The research calls on Poland to replace polluting coal plants with renewables and not gas, saying that it is already cheaper to produce energy by building new solar farms and onshore wind than new combined cycle gas turbine (CCGT) units.
It adds that by 2025, solar and onshore wind supported by battery storage will be cheaper than gas.
Poland, which relies on coal for around 70 per cent of its electricity production, plans to more than double its existing gas-fired power generation capacity to over eight gigawatts (GW) by 2030, viewing gas as a transition fuel before switching to nuclear and renewables.
However, Carbon Tracker’s report, Poland’s Energy Dilemma, warns that pursuing gas threatens the country’s energy security and could lock consumers into high prices.
“With wholesale gas market prices having reached record highs over the past 12 months and rising political tensions in Europe increasing the threat that supplies could be weaponised or placed under international sanctions, now is not the time for nations to be increasing their dependence on gas,” it says.
According to one of the report’s co-authors, Jonathan Sims, the costs of clean technology continue to fall and by mid-decade solar and wind farms backed by battery storage will be able to provide flexibility and services comparable with a gas at a lower cost.
“Pursuing gas will cost taxpayers billions in subsidies and higher energy bills, undermine EU climate targets and expose the country to pressure from foreign gas suppliers,” he says.
Polish taxpayers will subsidise the construction of five new gas plants due to begin operation between 2023 and 2027 through guaranteed 17-year capacity market payments that will cost nearly 4.5 billion US dollars. The report finds that the plants are only economically viable because these payments are much more generous than capacity payments in other European countries.
The report says that all five projects will be more costly investments than either new onshore wind, offshore wind or solar farms.
Renewables supported by battery storage will be able to respond to peaks and troughs of demand, providing flexibility comparable to new gas plants. Solar with storage will be cheaper than gas from 2024 and onshore wind with storage from 2025.
Report co-author Lorenzo Sani adds: “This note aims to dispel the notion that Poland has little choice but to switch from the use of one fossil fuel to another for its power supplies. It attempts to persuade policy makers to grasp the immense opportunities available to the country in the lower cost and lower risk renewables sector. We highlight the extreme risks to investors of long-term gas plant investment.”
Gas makes net zero by 2050 impossible
The report calls on policymakers to cancel the new gas plants. If they run for planned 30-year lifespans it will be impossible for Poland to meet net zero by 2050, the target the European Union has set for achieving climate neutrality.
If the new plants are instead retired early in line with the climate targets, developers will face heavy losses and could launch compensation claims against the government.
The report also warns that overly generous capacity payments are distorting the market and plants would not be built without them. Taxpayers should not be locked into subsidising projects that may struggle to run their full lifetimes, and funding would be better spent to accelerate investment in renewables.
It says the role for gas within the European power system should be to provide backup power supporting renewables. This is better served by smaller scale peaking units than large CCGT plants, says the report.
The Polish government last year acknowledged the country’s capacity for offshore wind development in its energy policy plan for the next two decades. It identified potential for just under 6GW to be built by 2030, if the first projects can launch by 2026 as planned, rising to 11GW by 2040.
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