energy policy of poland

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Energy policy of Polanduntil 2030

22th September 2010

MINISTRY OF ECONOMY

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Energy policy of Poland…

• … is consistent with the energy policy of the European Union and its objectives

• ... answers on the main challenges facing the Polish energy sector

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Main challenges for energy policy

High demand for final energy

Commitments on environment and climate

protection compel us to take decisive actions

Almost full dependence on external supplies of crude oil

Significant dependence on external supplies of natural

gas

Inadequate generation and transmission infrastructure

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The priorities of Polish energy policy

Reducingenvironmental impactof the energy sector

Reducingenvironmental impactof the energy sector

Development of competitive fuel

and energy markets

Development of competitive fuel

and energy markets

Development of the use of renewableenergy sources (RES),

incl. bio-fuels

Development of the use of renewableenergy sources (RES),

incl. bio-fuels

Diversificationof the electricity

generation structureby introducingnuclear energy

Diversificationof the electricity

generation structureby introducingnuclear energy

Enhancedsecurity of fuel

and energy supplies

Enhancedsecurity of fuel

and energy supplies

Improvingenergy efficiency

Improvingenergy efficiency

PEP 2030PEP 2030

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Energy efficiencyEnergy efficiency

The main targets:

• To achieve zero-energy economic growth, i.e. economicgrowth with no extra demandfor primary energy

• Reducing the energy intensityof Polish economy to the EU-15 level (in 2005)

The above targets will be realized through:

• Reducing energy consumption• Enhancing the efficiency of

generation• Decreasing transmission

losses

Main measures:

• Setting the national energy efficencyaction plan

• Introducing a systemic mechanism to support for investment in energy saving (white certificates)

• Stimulating development of cogeneration through support mechanisms (yellow and red certificates)

• Introducing energy performance certificates for buildings and apartments

• Model role of public sector in energy saving activities

• Supporting investments and research in new solutions and technologies

• Informational and educational campaigns

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Energy security

Polish energy security should be based on:

• Domestic energy resources

• Diversification of oil and gas supplies

• Development of electricity generation capacity

• Development of transmission infrastructure

Main measures:

• Retaining sufficient level of mining capacity

• Extending the natural gas and crude oil transmission systemand storage capacities

• Reconstruction and reinforcement of the existing power grid and building new ones

• Supporting research and development of technologies providing to use coal for liquidand gas fuels production

• Development of energy infrastructure supported by European Funds

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The demand for primary energy by carriers (%)

Source: Projection of demand for fuels and energy until 2030, ARE

Natural gas14,5%

Renewable energy12,4%

Lignite8,2%

Other fuels1,3%

Hard coal31,0%

Nuclear fuels6,3%

Oil and oil products

26,2%

2009 2030

Natural gas12,8%

Renewable energy

3,5%

Lignite13,0%

Other fuels2,0%

Hard coal43,7%

Oil and oil products

25,0%

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Electricity generation by fuel (TWh)

5

30

55

80

105

130

155

180

205

2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

Hard coal Lignite Natural Gas Nuclear RES Other

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The main targets:

• Increasing the use of RESin the final energy use to 15% in 2020

• Increasing the share of bio-fuels in the market of transport fuels to 10% by 2020

Main measures:• Stimulating development of

RES through support mechanisms (green certificates)

• Introducing additional support instruments

• Effective use of biomass (agricultural biogas installations, second generation of biofuels)

• Creating conditions for building offshore wind farms

• Development of RESsupported by European Funds

Renewable Energy Sources (RES)

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Electricity generation in RES

2009: 5,73% 2030*: 18,2%

Electricity generation in RES (%) in 2030

Share of RES in net electricity generation

* Source: Projection of demand for fuels and energy until 2030

Wind45,0%

Biomass29,3%

Photov oltaic0,1%

Water8,1%

Biogas17,4%

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RENEWABLE ENERGY SOURCES IN POLAND(present and the future)

MINISTRY OF ECONOMY

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• Directive 2009/28/WE has set out for Poland an obligatory target to achieve 15% level of renewable energy in final energy consumption and 10% level of biofuels in transport fuels market to 2020,

• Reference level of renewable energy in final energy consumption in Poland was 7,2 % in 2005;

Polish obligatory target of 2009/28/WE Directive

MINISTRY OF ECONOMY

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2000

4000

6000

8000

10000

12000

14000

2006 2010 2015 2020 2025 2030

biohydrogen

biodiesel II generation

bioethanol II generation

biodiesel

bioethanol

sun [heat]

sun [electricity]

geothermal

water

wind

biogas [heat]

biogas [electricity]

biomass [heat]

biomass [electricity]

Forcasted final renewable energy demand up to 2030 [ktoe]

MINISTRY OF ECONOMY

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• enhance security of fuel and energy supply,

• rural areas development through the increase in the field of non-food purposes production,

• improvement of national financial balance (energy resources import reduction),

• RES industry development, which will directly influence ona labour market and new technology export ability;

Renewable Energy Sources (RES) development benefits :

MINISTRY OF ECONOMY

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• Electricity generation,

• Heat production,

• Biofuels;

Three areas of RES:

MINISTRY OF ECONOMY

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Electricity generation

MINISTRY OF ECONOMY

• Quota system obligation in the “Green certificates” formula,

• Introduced in the “Green certificates” formula on 1st of October 2005;

Basic support mechanism for electricity from RES:

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Electricity generation

MINISTRY OF ECONOMY

• From guaranteed by the law sales of electricity at the setprice (average electricity price in the previous year 40 Euro/1MWh),

• From sales of the tradabe certificates of origin at Power Exchange (61 Euro/1 MWh = mean price of property rights in 2009);

Investors and Producers of electricity from RES have two kinds of income:

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Electricity generation

MINISTRY OF ECONOMY

• Obtaining and submitting the certificates of origin to the President of the Energy Regulatory Office

or,

• Paying a substitution fee which is revaluated every year by President of the Energy Regulatory Office (2010 fee is 67 Euro/1 MWh );

Obligation is imposed by law on energy companies selling electricity to final consumers:

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Electricity generation

MINISTRY OF ECONOMY

• Obligation to purchase the entire volume of electricity generated from RES at average market price of „conventional electricity” from the previous year,

• Average market price is announced by the President of the Energy Regulatory Office every year,

• Support mechanisms in green certificates formula is functioning well and we can observe boost in investments;

Additional obligation:

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Electricity generation

MINISTRY OF ECONOMY

• Free license issuance to the grid of RES with capacity up to 5 MW,

• Preferential balancing method for wind power plants taking into account natural fluctuation of electricity generation due to the nature of the wind;

Additional preferences for RES:

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Electricity generation

MINISTRY OF ECONOMY

RES balance in Poland (RES power capacity in MW)

1158

1362

1524

1678

1993

0

500

1000

1500

2000

2005 2006 2007 2008 2009

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Electricity generation

MINISTRY OF ECONOMY

RES balance in Poland

3 761

2,6

4 222

2,8

5 230

3,4

6 447

4,2

8,568

5,73

0

1

2

3

4

5

6

7

8

9

2005 2006 2007 2008 2009

Electricity production from RES (TWh)

Share of electricity from renewable sources in gross final consumptionof energy (%)

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Electricity generation

MINISTRY OF ECONOMY

RES Generation (electricity) in the years 2005 – 2009 [GWh]

6 447

806

221

3 267

2 153

2008

8 5685 2304 2223 761Total

1 034472257135Wind power

295162117105Biogas

4 8632 3431 8181 345Biomass

2 3762 2532 0302 176Water power

2009200720062005Source

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Electricity generation

MINISTRY OF ECONOMY

RES Generation (electricity) in the years 2005 – 2009 [GWh]

01 0002 000

3 0004 0005 0006 000

7 0008 0009 000

2005 2006 2007 2008 2009

BiogasBiomassWind powerWater power

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Electricity generation

MINISTRY OF ECONOMY

Forcasted RES Generation (electricity) in the years 2008 –2030 [GWh]

0

5000

10000

15000

20000

25000

30000

35000

40000

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Large-scale water power Small-scale water power Wind power

Biomass/Cogeneration Biogas

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Operational Programme Infrastructure andEnvironment 2007-2013

• Under the programme 15 priorities areimplemented.

(9) Environment-friendly energy infrastructure and energyefficiency - EUR 1403.0 million;

(10) Energy security including diversification of the energysources - EUR 1693.2 million;

MINISTRY OF ECONOMY

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The Programme Innovative Economy

This programme is directed mostly to all entrepreneurswho want to implement innovative projects connectedwith research and development, modern technologies, investments of high importance for the economy orimplementation and use of information andcommunication technologies.

MINISTRY OF ECONOMY

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• The overall objective of the Programme Innovative Economy 2007-2013 is the development of Polish economy based on innovativeenterprises. This objective will be achieved through implementationof the following specific objectives:

• Improvement of innovativeness of enterprises• Improvement of competitiveness of Polish science• Strengthening of the role of science in economic develo pment• Increasing the share of innovative products of the Polish

economy in the international market• Creation of permanent and better workplaces• Growth of the use of information and communication

technologies in the economy

MINISTRY OF ECONOMY

The Programme Innovative Economy

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• The allocation for the ProgrammeInnovative Economy amounts in total to EUR 9,711,629,742 including EUR 8,254,885,280 from the EuropeanRegional Development Fund.

MINISTRY OF ECONOMY

The Programme Innovative Economy

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MINISTRY OF ECONOMY

The Programme Innovative Economy

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MINISTRY OF ECONOMY

The Programme Innovative Economy

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Thank you

for your attention

Marcin KorolecUndersecretary of State

Ministry of Economy