Binding national RES targets for 2020 prompted Poland to introduce a system of incentives, among others for prosumers that result in increased interest in this technology. The development of prosumer photovoltaics installations (which accounts for more than 60% of the photovoltaics’ installed capacity) is possible thanks to the funding from such programs as Energia Plus. According to SolarPower Europe, Poland was in the fifth place in the European Union in 2019 in terms of the growth of new photovoltaic capacity. In 2020, another record amount of photovoltaics’ installed capacity is expected due to the implementation of installations as a result of the RES auctions held in 2018 and 2019 and the fast growth of the prosumer sector.
It is assumed that by 2025 the installed capacity in wind based technology will also increase – the total capacity of new installations planned for construction is approx. 1000 MW, as a result of the RES auctions held in 2018 and approx. 2200 MW as a result of the RES auctions held in 2019. An impulse stimulating further growth of wind energy may be an amendment to the distance act, which may increase the supply of projects in the subsequent years.
It is forecast that after the introduction of the regulations regarding investments in off-shore wind farms (principles of settling investments in grid connections, the support system) and adopting the final version of the Spatial Development Plan for Polish Maritime Areas, the construction of the first wind energy installations on the Baltic Sea will begin, so that in 2025 the first off-shore farms will be put into operation. The most advanced works are carried out by PGE, PKN Orlen and Polenerga, and the grid connection conditions were issued for more than 7 GW of capacity.
The share of individual sources in the country’s generation structure will change, but despite the growing number of renewable energy installations, coal will remain the primary fuel in the domestic energy sector by 2025.
The final decision is also expected on the commencement of the investment in the nuclear power plant.
Based on the changes observed on the European energy market and the situation of the domestic energy groups, it can be concluded that the energy business model will be modified. The mergers underway and planned – both the domestic as well as the European deals – indicate that fuel companies (e.g. Equinor-Statoil, PKN ORLEN, PGNiG) are making investments in the energy sector. On the other hand, specialization is also taking place, exemplified by the merger of two vertically integrated groups on the German market: RWE and E.ON. and a significant reduction of conventional energy, a gradual withdrawal of the Western conglomerates from nuclear energy and focusing mainly on the renewable energy sources.
In terms of the macroeconomics, according to the NBP, in the years 2019-2021 the domestic GDP growth rate will gradually slow down. The forecast for 2019 assumes a growth rate of 4.3%; 3.6% in 2020 and 3.3% in 2021. Despite the deceleration of the global economic growth, the Polish economy is still growing rapidly – it is assumed that GDP growth will be continued until 2025.
In the coming years, it is assumed that the growth in demand for electricity will be continued. Despite the expected decline in the energy intensity of the Polish economy, stabilization of the economic growth rate and the improvement of energy efficiency, there will be an increase in electricity consumption per capita – in terms of consumption Poland is below the EU average, so there is still a large growth potential. The increase in energy demand will also be sustained by the development of electromobility, expected after 2020, and the wider spreading of the use of electricity, for example, for heating purposes – in connection with counteracting low emissions. The electrification of heating (combined with an increase of the importance of district heating) will be rising along with a growth of environmental awareness and the intensification of activities related to smog reduction.
According to TAURON Group, the most important issues that will affect the energy sector until 2025 include:
- European and national regulations: further reduction of CO2 emissions resulting in increased prices of emission allowances, increased obligation with respect to the share of electricity from renewable energy sources and increased energy efficiency; adoption and implementation of Poland’s Energy Policy until 2040,
- limitation of financing possibilities for investments in coal assets by the financial sector,
- decommissioning of some conventional generating units associated with the high costs of adaptation to the more stringent environmental requirements and their deteriorating competitive position versus other energy sources,
- integration of the European energy market and the associated reduction of the importance of the local markets in favor of the regional markets, rising capabilities for physical cross-border flows,
- ability to separate self-balancing areas, e.g. energy clusters, and the ability to provide additional services for them, not offered today (balancing, aggregation, DSM, capacity reservation, etc.),
- development of technology related to energy storage,
- broadly understood digitization.
TAURON Group’s Strategy, along with the Update of Strategic Directions, is in line with the market and regulatory trends identified in the time frame up to 2025. The Update of Strategic Directions, in turn, outlines TAURON’s Green Turn, i.e. a sustainable transition towards a leading low-emission energy group in Poland. The main outcome will be a change in the Group’s energy mix, approximately 28% of the installed capacity will be low- and zero-emission sources, with the simultaneous decommissioning of 120 MW units and maintaining of profitable and eligible for support 200 MW units, as well as modern, low-emission and high-efficiency coal fired units. At the same time, TAURON Group is preparing a portfolio of investment projects with respect to the renewable energy sources and is developing competences required for their implementation. In 2019, TAURON Group purchased five wind farms with the capacity of 180 MW, thus doubling the installed capacity in wind. In the coming years, the Group will be looking for other similar market opportunities.
TAURON Group’s Strategy, along with the Update, is in line with the European activities related to reducing the impact of the business operations on climate change. Given the significant importance of issues related to the protection of the environment and climate, TAURON Group is working on the assumptions for developing a new strategy with the minimum time frame of up to 2030, with a long-term outlook. The main guideline will be to prepare development scenarios that will ensure long-term profitable business operations immune to climate change and at the same time minimizing the impact of the Group’s operations on the environment by reducing the emissions of the generation sources. The scenarios taken into account will depend on the intensity of changes taking place in the environment, in particular on the assumptions of Poland’s Energy Policy, the decisions taken by the Government as part of the climate initiatives and regulatory directions shaped during the global climate summits. TAURON will be defining climate scenarios based on the available and applied methodologies, in particular TAURON Group’s long-term strategic directions will be considered based on two temperature change scenarios: < 2 degrees and > 2 degrees.