Polish main opposition seeks green push after October election

By Marek Strzelecki

WARSAW (Reuters) -Poland's biggest opposition grouping plans to kick-start the country's lagging transition from coal if it wins next month's tightly contested election, the party's energy expert said.

The country's coal-dominated electricity mix translates into Europe's highest power prices, while a heavy carbon footprint could in the longer run hamper its potential to attract greenfield projects or to export power-guzzling products such as steel.

Civic Platform (PO), running close behind the ruling nationalists in polls, plans a radical shift towards wind and solar to replace coal as the main source of Polish electricity by the end of the decade. Some elements of the plan may be announced on Saturday.

"Renewable energy sources must become the basis of the system," Grzegorz Onichimowski, a former chief executive of the Polish power exchange and a member of team working on PO's energy programme, told Reuters.

Its aim is to achieve between 65% and 70% of Poland's energy production from renewable energy sources by 2030, he said.

Some 70% of Polish electricity currently comes from coal.

The opposition plan - which according to Onichimowski is supported by PO's potential coalition partners, the smaller left wing and centrist groupings - includes unbundling of the state-controlled power utilities to ease access to the grid for renewable capacity.

Rules to build new onshore wind farms would be liberalised to boost capacity and spur replacement of old turbines on existing farms with bigger, more efficient ones.

PO would not proceed with the current government's plan to spin off state-owned utilities' coal-fired power plants and bundle them into a new state-owned company, Onichimowski said.

Instead, coal plants with the shortest lifespan and lowest profitability should become a reserve pool for the power grid, the expert said.

Most opinion polls show the ruling Law and Justice party (PiS) and its smaller allies leading the election race. But some surveys show its advantage is narrow enough that PO could have a shot at forming a majority coalition with smaller parties.

Even if that happens, to enact its energy policy PO would have to overcome opposition from powerful trade unions and possible presidential vetoes from Andrzej Duda, a PiS ally.


While polls also show a vast majority of Poles favour investments in renewable power generation, green policies are unlikely to be a factor that could swing the Oct. 15 vote.

However, with most voters focused on double-digit inflation and soaring energy prices, the opposition may be able to make a cost-of-living case for a shift to renewables.

"I would not overestimate the issue of energy transformation in the election," said Michal Hetmanski, head of Instrat, a Warsaw-based think-tank advising on public policy.

"But electricity prices are a very sensitive issue and some voters realize that faster development of renewable generation could lower electricity bills."

Polish coals mines employ nearly 76,000 people and, just this week, Poland's top state-controlled utility PGE shelved a plan of a quicker coal exit that had angered unions.

PiS has introduced subsidies for household consumers installing heat pumps and solar panels, but has blocked the development of onshore wind for most of its eight years in power and promised unions to keep mining coal until 2049.

Coal output is steadily declining amid rising costs and gradually falling power production from the fuel, however, and reducing reliance on inflexible coal-fired power plants in favour of cheaper renewables could bring down energy bills.

At stake in the energy debate are billions of zlotys in fuel and emissions costs Poland could save by reversing a widening electricity price gap between the country and its European neighbours, according to Instrat.

Over time, Poland will lose out to competition from central European rivals in the global trend towards reshoring by automotive and chipmaking companies if it does not wean itself off coal, according to Hetmanski.

Some investors, including Mercedes, keep choosing Poland and manage to secure carbon-free electricity via the long-term power purchase agreements with producers.

With ESG (environmental, social and corporate governance) requirements in focus, the competition for foreign industrial investments is not just about the electricity price, but increasingly centres around availability of renewable power used in production facilities.

"Poland is still attractive for foreign investors offering a qualified and skilled workforce and a wide range of suppliers," said Ewa Labno-Falecka, head of corporate communications at Mercedes-Benz Manufacturing Poland, which is investing more than 1 billion euros in an electric-only vans plant in Jawor. "But it must commit to a more consistent energy transition towards a larger share of green energy in the grid."

(Reporting by Marek Strzelecki; Editing by Alex Richardson)