Poland Must Invest In Energy Independence

Energy transition will be different in each European country and derussification should include various energy sources

“The whole of Europe wants to punish the atrocious policy of the Russian Federation. The question is how to do it”, said Tomasz Młynarski, Ph.D., professor at the Jagiellonian University, during the panel “Derussification of the European energy sector – a realistic goal or utopia?”, during Krynica Forum 2023.

According to Tomasz Młynarski, this can be achieved through diversification of energy sources, reduced consumption, and energy transition. He cited the example of France, which has taken the decision to reduce (and ultimately stop altogether) oil and gas consumption and is investing heavily in the transformation, currently building 50 offshore wind farms and developing a network of biogas plants. Production of internal combustion vehicles will be prohibited in France from 2040, so currently electric cars are subsidised and a hundred thousand chargers for them are available in the country. Tomasz Młynarski believes that hydrogen will also play an important role and it should not be feared.

Paweł Strączyński, Vice-President of Bank Pekao S.A., noted that at the beginning of the energy crisis associated with the war in Ukraine, there was a shortage of coal in Europe. This was because the European Union’s policy is geared against coal, so mining companies and power companies with mines had been limiting output for years. It was therefore impossible to suddenly prepare new workings, as this is an investment process that takes up to two years.

“In my opinion, coal will continue to represent the foundation of our country’s energy security for years to come, at least until highly efficient energy storage facilities are developed. However, that would require a technological breakthrough, enabling effective storage of energy from wind farms and photovoltaics”, said Paweł Strączyński. “Hydrogen is a project of the future, and we live in the here and now. Today, the efficiency of a diesel engine is 50 percent, a petrol engine 40 percent and a hydrogen engine 25 percent”, he added.

Paweł Strączyński explained that we should aim to reduce natural gas consumption and invest in renewable energy sources, including nuclear power plants. Before that happens, though, it will be necessary to use coal.

“It is coal that should be the transition fuel and benefit from the preferences that natural gas was supposed to have”, he argued.

Agnieszka Kaźmierczak, Director General of the Euratom Supply Agency, spoke about other countries’ approaches to transition and energy independence, noting that besides oil and gas, nuclear fuel was often imported from Russia as well.

“After Russia’s aggression, the first decisive response came from Sweden and Finland, which immediately cancelled contracts for the supply of nuclear fuel to Russia, and Finland also cancelled contracts for construction of a new nuclear power plant”, said Agnieszka Kaźmierczak, adding that other countries were slower to decouple from Russian supplies. Those that had nuclear reactors of the old Russian type – Czechia, Slovakia, Hungary, Bulgaria, Finland – were in the worst situation.

“Slovakia had a stockpile of nuclear fuel that would last less than a year. The Russians were always applying price pressure and no investment was being made in Europe and the US because the Russians were always able to offer it cheaper”, she added, explaining the high degree of dependence.

She welcomed efforts made by some countries to pursue a common nuclear energy policy.

“A coalition of pro-nuclear countries has been formed this year under the leadership of France. However, I do not expect the whole of Europe to speak with a single voice, as there will always be countries opposed to nuclear power, such as Austria or Luxembourg”, said Agnieszka Kaźmierczak.

Magdalena Maj, head of the Climate and Energy team at the Polish Economic Institute, noted that in the past, there already were some ideas for joint purchases of energy resources – natural gas. After the outbreak of the war, the topic was revisited and a platform for joint purchases of gas has been established this year. It has not been overly popular, though.

“Derussification has not yet been effected one hundred percent. There are still countries that import liquid gas from Russia, such as Hungary, Spain, and Austria. The full gas embargo is not yet in place. Poland is in a comfortable situation as it has built the Baltic Pipe gas pipeline at the perfect time”, said Magdalena Maj. She also pointed out that the possibility of exchanging electricity within the European Union and the expansion of cross-border connections are of great value.

“Every EU country sees its path to decarbonisation and perceives its security differently. Polish government relies on its own sources and the expansion of interconnectors”, she said.

She noted that it may be risky to assume that it would always be possible to import energy from abroad.

Paweł Strączyński believes that although gas will have to be used in the transition phase, a return to Russian gas is not possible.

“Investment processes that are happening in the world – construction of gas carriers and expanding the logistical capacity to transport LNG via Australia or the United States – indicate that there will be no return to Russian gas”, he emphasised.

Poland’s policy should be based on developing its own energy sources and imports from safe countries, taking care, however, that the transition period does not last too long and does not lead to dependence on countries other than Russia.

“Last year Saudi Aramco made a profit of USD 160 billion. Never before in the world has a single company earned such a profit. Ultimately, we need to achieve energy independence”, said the Vice-President of Bank Pekao S.A.

AH

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