Poland, in a bid to facilitate its transition to nuclear energy by the next decade, is seeking an extension of EU rules permitting coal plant subsidies until 2028. Maciej Bando, the deputy climate minister responsible for strategic energy infrastructure, emphasized the necessity of coal power generation until nuclear facilities become operational. With coal currently contributing 60% of electricity output and serving as a backup for intermittent renewable sources, Warsaw aims to have its first large-scale nuclear plant operational by 2033. Bando highlighted the potential collaboration among EU nations seeking support for their energy assets, citing Germany’s pursuit of EU approval for gas plant subsidies. Despite plans for a floating liquefied natural gas terminal in Gdansk, Bando suggested its expansion might not be necessary until after 2030 due to lower demand projections.
Tag: Energy Transition
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Landmark Court Decision Reverberates Through Poland’s Energy Landscape
In a groundbreaking decision with far-reaching implications for Poland’s energy sector, the Voivodeship Administrative Court (WSA) in Warsaw has overturned an environmental ruling concerning the Turów lignite coal mine, operated by PGE GiEK. While the ruling doesn’t immediately halt mine operations, it underscores the delicate balance between energy demands and environmental preservation, prompting state-owned power company PGE GiEK to contemplate future strategies.
Background and Court Ruling: The court’s ruling follows a lawsuit challenging the environmental impacts of the Turów mine, situated near the Polish-Czech border. Criticizing the lack of consideration for a bilateral agreement with the Czech Republic addressing cross-border mining effects, the WSA’s decision resonates beyond legal realms. Despite the verdict, Turów’s operations, vital for Poland’s electricity supply, remain unaffected. PGE GiEK vows compliance with environmental standards and continues investing in mitigating measures.
Environmental Measures and Investments: PGE GiEK’s substantial investments target minimizing Turów mine’s environmental footprint. Initiatives include constructing an underground anti-filtration screen to safeguard Czech water resources and implementing various ecological and noise-reduction endeavors. These efforts underscore Poland’s struggle to balance energy demands with environmental obligations, shaping the nation’s energy transition trajectory.
Implications for Future Energy Policy: Although subject to further legal proceedings, the court ruling prompts reflection on Poland’s coal mining future and its broader energy policy. Amidst efforts to diversify energy sources and reduce coal dependency, the Turów case epitomizes the challenges of transitioning towards sustainable energy while ensuring energy security. Beyond Turów, the discourse resonates with Poland’s energy direction and environmental legacy considerations.
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Energy Transition of Bosnia and Herzegovina is on hold
Bosnia and Herzegovina has not yet adopted the final version of the National Energy Climate Plan, although the deadline was set by the end of last year. In practice, this means that energy transition measures are implemented unsystematically and without clear deadlines, especially when it comes to phasing out coal, one of the biggest polluters. BHRT has checked the experiences and challenges in countries that have advanced in the planned transition to renewable energy sources in one of the EU members, Slovenia.
A new image of the former mining region of Zasavja, east of Ljubljana – Solar power plants have become an almost indispensable decoration of business buildings and households. Entrepreneur Sergej Smrkolj says that he made the right decision five years ago. Today, it independently produces half of the electricity needed in production. The energy crisis only reinforced the effect of self-sustainability.
“We did not invest anything in the project. GENi invested in the project. We pay off the project with the consumption of electricity. After ten years, it becomes our property,” emphasizes Sergej Smrkolj, director of “Skitti”, Izlake.
The process of energy transition in Slovenia was initiated by the decision not to build a new unit of the Trbovlje Thermal Power Plant, which was adopted more than two decades ago. Ten years ago, the existing block was shut down, and the last mines were closed. With a lot of challenges.
“It was really painful for some workers who were left without everything, stayed overnight without everything and had no more work,” says Ervin Renko, HSE Energetska družba, Trbovlje.
Official data show that in the long process of closing the mine, the Zasavja region lost 23 percent of its jobs, and 11 percent of its population decreased. The country is gradually remediating the negative consequences with significant help from the European Fund for Just Transition. 258 million euros are earmarked for two mining regions in Slovenia.
“The largest part of the EU funds will be for the economy for companies and for municipalities. In the first phase, this is already happening, the first tender was published, municipalities will create economic business zones and prepare the ground for companies to do their business here,” says Jani Medvešek, director of the Zasavje Regional Development Agency.
With the strategy of getting out of coal, Slovenia also planned to shut down the Šoštanj TPP in 2033. The Slovenian Ministry of Energy says that coal production has become unprofitable, which could speed up the process.
“That should stop and it will stop. Due to the energy crisis, that year was not extended, because the economic price of electricity from TE Šoštanj is very high, because it includes the price of CO2 coupons, so maybe due to economic reasons, electricity production will stop even before” 33rd year”, emphasizes Hinko Šolinc from the Ministry of Environment, Climate and Energy of Slovenia.
One of the key tools of the energy transition in Slovenia is “Eco Sklad”. This public fund annually places around 50 million euros in loans and up to 80 million euros in grants for energy efficiency and renewable resources, water protection, and waste management. Grants cover between 20 and 50 percent of investments. The money was provided from a special tax for energy efficiency, and from the sale of carbon coupons.
“Recently, we started introducing measures to combat energy poverty. These measures provide grants for households with low incomes and these are 100 percent grants, because they cover the entire investment,” says Mojca Vendramin, director of “Eko Sklada”.
Slovenia follows the EU’s goals that by 2030, renewable energy sources make up 45 percent of the energy mix, and that harmful emissions are reduced by 55 percent compared to the reference year. The expansion of the photovoltaic screen built on the former slag dump from the Trbovlje Thermal Power Plant is in accordance with these plans, BHRT writes.
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Mongolia’s critical role in the global energy transition
Climate change is pushing the world to transition its energy systems at an unprecedented pace. This shift is contingent on a steady supply of minerals and metals critical for the production of low-carbon technologies. Mongolia’s rich endowment of copper, uranium, fluorspar, rare earth elements, and other critical minerals position it well in the global geopolitics of energy transition.
Minerals constitute more than 90% of Mongolia’s exports and contribute more than a quarter of government revenue. There is potential for Mongolia to shore up its long-term socio-economic development by harnessing its natural resources wealth. However, in the absence of due diligence and appropriate safeguards, this opportunity may turn into a risky undertaking for the country.
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Kazakhstan Energy Transition
Steppes to Net Zero
This report provides a comprehensive perspective on Kazakhstan’s energy transition pathway, striking a delicate balance between energy costs, supply reliability, and environmental sustainability. It sheds light on the economic risks associated with continued support for coal-fired generation and highlights the need for international funding to assist the country in its just transition. While Kazakhstan’s individual contribution to global emissions may be limited, similar to that of Spain or France, its emissions intensity relative to GDP remains alarmingly high, with the energy sector being the primary source of greenhouse gas emissions, accounting for 82.4% of the country’s total emissions. Fuel combustion alone is responsible for 70.5% of Kazakhstan’s overall greenhouse gas emissions. Additionally, the Central Asian region is highly vulnerable to the impacts of climate change, further emphasizing the urgency of taking action.
It is important to note that there is currently no political commitment to phase out coal due to concerns over potential disruption to the socio-spatial and economic balance. Political support for coal-fired technologies is driven by the inflexibility of the energy system and the legacy of district heating. However, maintaining support for coal in the long term poses significant economic risks and hinders investment in activities that could diversify Kazakhstan’s economy and facilitate a just transition.
The upcoming decade or so will be crucial in laying the groundwork for the new economy. Failing to do so will result in economic stranding, as legacy revenue streams and traditional jobs dwindle without the offset from new, clean revenue streams and employment opportunities.
Kazakhstan’s current low carbon price fails to incentivize energy transformation and proves to be an ineffective policy tool, especially considering the availability of free quotas. To facilitate Kazakhstan’s energy transition, it is imperative to establish a higher carbon price through reduced free quotas and government auctions.
By 2030, the integration of renewable energy sources will necessitate the implementation of storage at scale to ensure system flexibility. Governmental planning and support for the rollout of storage infrastructure will be vital during this decade.
Financial aid is essential for Kazakhstan to expedite its transition to clean energy. Blended concessional financing should be made available to facilitate the just transition from coal to clean power, contingent upon the existence of a credible coal phaseout plan.
Current political and technological commitments run the risk of perpetuating the fossil fuel infrastructure and impeding the growth of renewables. Power prices are expected to rise significantly with the addition of new coal plants or retrofitting of existing ones. However, the inclusion of renewables, which have demonstrated declining price trends in renewable energy auctions, will lower power prices for end users. New coal plants are twice as expensive as new renewables with storage, and breaking even would require a doubling of power tariffs. Under our base scenario, new renewables will outcompete existing coal units within one year, while renewables with storage will be cost competitive within five years. It is crucial to accelerate and expand the deployment of renewables on a larger scale than currently envisioned.
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Polish main opposition seeks green push after October election
Poland’s largest opposition party, Civic Platform (PO), harbors ambitious plans to expedite the country’s departure from coal if it emerges victorious in the fiercely contested upcoming election. At present, Poland heavily relies on coal for electricity generation, resulting in exorbitant power prices within Europe and a substantial carbon footprint. Such circumstances could impede the nation’s ability to attract environmentally friendly projects and export energy-intensive goods, such as steel. PO envisions a radical transformation, aiming to transition from coal to wind and solar as the primary sources of Polish electricity by the decade’s end.
Grzegorz Onichimowski, a former CEO of the Polish power exchange and a member of the team shaping PO’s energy program, emphasizes the urgency of establishing renewable energy sources as the bedrock of Poland’s energy system. The party sets its sights on achieving between 65% and 70% of the country’s energy production from renewable sources by 2030.
At present, coal accounts for roughly 70% of Poland’s electricity generation. PO’s energy plan, with the support of potential coalition partners from smaller left-wing and centrist groups, entails measures like unbundling state-controlled power utilities to facilitate grid access for renewable capacity. Furthermore, the party plans to loosen regulations for constructing new onshore wind farms, thereby bolstering capacity and replacing outdated turbines with more efficient ones.
PO opposes the current government’s strategy of establishing a new state-owned company for coal-fired power plants, instead favoring the utilization of coal plants with the shortest lifespan and lowest profitability as a reserve pool for the power grid.
While polls generally indicate that the ruling Law and Justice party (PiS) and its allies maintain a lead in the election race, the margin is narrow enough that PO, in collaboration with smaller parties, could potentially form a majority coalition. However, the implementation of its energy policy would require overcoming resistance from influential trade unions and potential presidential vetoes from PiS-aligned President Andrzej Duda.
Although renewable energy garners broad support among the Polish populace, the election’s primary focus remains on economic concerns, encompassing double-digit inflation and escalating energy prices. Nevertheless, the opposition may capitalize on the argument that transitioning to renewables can alleviate the cost of living.
Poland’s coal industry employs nearly 76,000 individuals, and the government has committed to sustaining coal mining until 2049. However, coal production is dwindling, leading to increased costs and reduced power generation. Embracing renewables could not only reduce energy bills but also yield savings in fuel and emission expenses.
Moreover, Poland’s competitiveness in attracting foreign industrial investments may be at stake. As companies increasingly prioritize environmental, social, and corporate governance (ESG) criteria, the availability of renewable power for production facilities is emerging as a pivotal factor. Therefore, Poland’s commitment to a more sustainable energy transition may prove indispensable in securing investments from companies seeking cleaner energy sources.
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PGE accelerates the transformation of Poland’s energy sector – zero-carbon company by 2040
The Polish economy’s competitiveness hinges on a transition to clean, safe, and sustainable energy. The updated strategy of the PGE Group is a direct response to the evolving geopolitical and economic landscape in Europe, as well as the shifting role of electricity, now recognized as the fuel of the future and a pivotal component in the security and sovereignty of European nations.
Wojciech Dąbrowski serves as the President of the Management Board of PGE Polska Grupa Energetyczna.
PGE’s revised strategy is a carefully considered, rational, and responsible blueprint for advancing Poland’s energy sector through modern solutions. Our commitment to environmental responsibility and sustainable development positions us as the first energy company in Poland to achieve climate neutrality by 2040, a decade earlier than originally planned.
The successful execution of this strategy owes much to the proactive measures of the Polish government, including the establishment of the National Energy Security Agency, tasked with overseeing Poland’s coal-fired generation sources. This decision, endorsed by rating agencies like Fitch and Moody’s, accelerates our transformation efforts. It enhances our capacity to secure funding for new investment projects while ensuring the systematic decarbonization of an energy sector currently reliant on coal (70%). Importantly, it safeguards the stability of our electricity system and supports jobs in existing conventional generation units, mines, and the communities around them, all while preserving Poland’s energy security.
PGE’s emerging energy mix will pivot towards renewable sources, with a prominent focus on offshore wind farms in the Baltic Sea, where we stand as Poland’s largest investor with a potential capacity exceeding 7 GW. Ensuring optimal utilization of renewable energy capacity, we will deploy energy storage facilities that also play a stabilizing role in a digitally managed distribution network. The renewable energy segment will be complemented by an ongoing nuclear power plant project in collaboration with our Polish and Korean partners, along with gas-fired power plants where hydrogen and biomethane will replace gaseous fuel after 2030. Customers remain a vital part of Poland’s energy transition, and we continue to expand our offerings, including photovoltaics, heat pumps, and home energy storage solutions, to support their energy independence.
Implementing PGE’s strategy requires unprecedented investments in Poland’s energy sector. By 2030 alone, we will invest more than EUR 27 billion. This substantial commitment will serve as a catalyst for job creation and the development of industries centered around modern energy in Poland. The green transition will significantly enhance Poland’s overall economic competitiveness on the global stage, driven by green energy.
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Polish Briefing: Poland’s quest for rare minerals I Bogdanka mine wants to go green
Poland is looking for a substitute for lithium and other rare earth metals
Poland is exploring the possibility of using a substitute for lithium and other rare earth metals. “The raw materials policy defines those raw materials that are used today. Today it is apparent that the energy transition makes it necessary to develop economic areas, which we should launch in our country. If we define the areas that we will launch in Poland, then we can adjust the needs for raw materials. Perhaps some of these needs are met, so we will open a discussion and try to introduce the point of view that not only critical raw materials are necessary, but they can also be replaced by other generally available raw materials, such as rare earth metals, lithium,” said Deputy Minister of Climate and Environment Piotr Dziadzio, Chief Geologist of the Country.
“We should look for substitutions for raw materials and that is what we are doing. I do not want to reveal the details now, but in the coming weeks there may be additional information on this subject,” added minister Dziadzio.
Lithium is used for the production of electric car batteries, among others. Rare earth metals are used to make semiconductors, which are an essential element of electronics, military equipment or vehicles. They are also needed for the energy transition.
Wojciech Jakóbik / Jedrzej Stachura
Bogdanka’s new strategy to turn the mine green
Bogdanka Lubelski Węgiel presented a development strategy that involves more coal mining until the mine is closed in Poland, and in the meantime investments in renewables, their components and recycling.
“The average level of coal production in 2023-2025 will be approx. 9.1 million tonnes, in the years 2026-2030 approx. 10.1 million tonnes, and in 2031-2040 approx. 9.1 million tons,” the new Bogdanka strategy announced in Lublin on May 17 said. Bogdanka intends to maintain more than half of the market share of coal.
One of the priorities is to “guarantee production by 2049 by starting production from the K-6 and K-7 resource base in 2024 and preparing for the availability of a vertical Ostrów field, which after 2038 will guarantee the flexibility and energy security of the state in the energy transition.” The social contract with Polish miners provides for the pahse-out of mines by 2049.
The company also declares “support for Ukraine’s energy recovery through the use of Bogdanka’s competencies and resources, which can actively support the reconstruction of critical infrastructure in Ukraine after the war.”
Bogdanka is also expected to develop multi-resource mining based on the exploration and commercial extraction of a number of minerals crucial for sustainable transformation and attractive to the market. The aim is also to produce res components, i.e. foundation baskets for wind farms and structures for the installation of PV panels. The mine also wants to scale up RES installations to diversify Bogdanka’s revenue stream by adding 500MW RES installations and selling the energy produced by them, as well as trading batteries and PV waste.
LW Bogdanka / Wojciech Jakóbik
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Rio Tinto commits $150 million to Centre for Future Materials led by Imperial College London
LONDON, July 31, 2023–(BUSINESS WIRE)–Rio Tinto has committed $150 million to create a Centre for Future Materials led by Imperial College London to find innovative ways to provide the materials the world needs for the energy transition.
The ‘Rio Tinto Centre for Future Materials’ will fund research programmes to transform the way vital materials are produced, used and recycled, and make them more environmentally, economically and socially sustainable.
Under the partnership, Rio Tinto and Imperial will together define a set of major global challenges that need to be addressed. These will form the basis of the first research programmes the Centre pursues, in partnership with a selection of international academic institutions.
The Centre will be established in the second half of 2023, with the first research programmes funded in 2024. Rio Tinto will contribute $150 million over 10 years to fund the Centre.
Rio Tinto Chief Executive Jakob Stausholm said “For the world to reach net zero, we must find better ways to provide the materials it needs. No single player can do this alone, and research and development plays a vital role. Imperial College London is one of the world’s leading institutions focused on science and engineering – I cannot wait to see the progress we make, as we bring together the best of industry and academia, with shared ambition.”
Professor Mary Ryan, Vice Provost (Research and Enterprise) at Imperial, said “All aspects of human society rely on materials – from housing to transport, energy, communications and health. We need to create sustainable ways to extract, process, and reuse these resources.
“Moving to a truly sustainable society requires a holistic approach to these complex industrial processes. This is inherent to Imperial’s approach. We will tackle these challenges and design future innovations that are resource and energy efficient, nature positive, humancentric and just. By working hand-in-hand with other leading international institutions, we will create a truly multidisciplinary, global effort to drive the next industrial revolution in harmony with nature.”
The $150 million commitment has been made in Rio Tinto’s 150th anniversary year. It will be delivered in 10 annual instalments and will fund research that empowers diverse, inter-disciplinary teams to deliver innovative, and transformative solutions with environment, society, and governance at their core.
The Centre builds on Rio Tinto’s long-standing support of research and innovation. It will complement an Innovation Advisory Committee of global experts in their fields that Rio Tinto recently established to accelerate its innovation portfolio and provide external insights and guidance on emerging and disruptive technologies.
The Innovation Advisory Committee includes members with experience in academia, industry and government. More information on the Committee can be found at riotinto.com.
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Explained: The EU’s handicap in the global race for critical raw materials
The EU is highly dependent on third countries for the raw materials needed to engineer its energy transition and digital transformation.
Russia’s war in Ukraine and the need to wean itself off fossil fuels in order to reach climate targets have prompted the EU to accelerate its green transition in recent months but also forced it to acknowledge its dependencies over access to critical raw materials.
In the global race for raw materials, the EU faces multiple challenges.
The first one is China, which recently started restricting exports of gallium and germanium, two metals essential for the production of semiconductors, in response to Western curbs on Beijing’s access to micro-processing technology.
The EU considers both materials of high strategic importance. As well as semiconductors and other electronic devices, they are used for military applications such as missile defence and radar systems.
Beijing’s restrictions come as a stark warning as the EU attempts to diversify and boost domestic supply of raw materials to reduce dependency on third countries.
Reliance on ‘low-governance’ countries
But diversifying supply chains could mean the EU has to source these materials from countries that don’t adhere to the same standards.
Recent data suggests the EU’s supply is highly dependent on countries that have a low governance level, based on indicators including political stability, rule of law and corruption control.
The EU’s Critical Raw Materials Act (CRMA), adopted in March this year, stipulates that EU strategic projects to scale up supply must be assessed taking into account all aspects of sustainability, including environmental protection, socially responsible practices and respect for human rights such as the rights of women.
But many countries feeding EU supply are not aligned with European values. This raises concerns about the impact on the local communities where materials are mined, as well as the potential exploitation of natural resources.
For example, the Democratic Republic of Congo, whose governance indicators are among the lowest in the world, supplies 63% of the EU’s cobalt, which is essential for manufacturing batteries for electrical vehicles.
Diversifying supply a challenge
The EU is also highly dependent on single countries for key materials such as Magnesium (China, 97%), Lithium (Chile, 97%), Iridium (South Africa, 93%) and Niobium (Brazil, 92%). These dependencies make supply chains vulnerable.
The Critical Raw Materials Act aims to ensure no third country provides more than 65% of the Union’s annual consumption of any raw material.
But diversifying supply is complex when refineries of many essential materials are monopolised by one or more global powers. China dominates the refining market for many critical raw materials.
Russia’s invasion of Ukraine and the ensuing energy crisis has shown the acute dangers of over-reliance for supplies of raw materials. China’s increasingly antagonistic stance and the political instability in many African countries have also served as reminders of the fragility of the EU’s trading relationships.
A spiralling global demand
The demand for raw materials is growing steeply, as developed countries race to digitalise and decarbonise their economies. This can only happen with sufficient supply of raw materials, meaning countries must scale up extracting, refining and recycling operations.
The global demand for lithium, for example, is set to increase a staggering 89-fold by 2050, according to the European Commission. Demand for gallium will multiply 17-fold during the same time.
The Critical Raw Materials Act sets targets for the Union to extract 10%, process 40% and recycle 15% of its annual consumption of raw materials by 2030.
To meet these targets and compete on the global stage, European Commission President Ursula von der Leyen has said the EU needs to speed up investments in research and development, recognising that the bloc’s global share of R&D expenditure has fallen 10% in the last 20 years.