Data and facts about Polish energy sector, energy transition, climate

1. Energy transition in Poland
Edition 2019
www.forum-energii.eu

2. Energy transition in Poland
2
AUTHORS:
Rafał Macuk
Joanna Maćkowiak-Pandera, PhD
Aleksandra Gawlikowska-Fyk, PhD
Andrzej Rubczyński
DATE OF PUBLICATION:
April 2019
Forum Energii is the Polish think tank forging the foundations of an effective, secure, clean and innovative energy system.
All Forum Energii analyses may be copied and duplicated free of charge as long as the source and authors are indicated.

3. Energy transition in Poland
3
Main conclusions 06
Generation capacity 07
Installed capacity in the Polish system in 2018 08
Change in installed capacity in 2018 as compared to 2017 09
Changes in installed capacity 10
Changes in installed RES capacity 11
Electricity production 12
Electricity production in 2018 13
Change in electricity production in 2018 as compared to 2017 14
Changes in electricity production 15
Changes in electricity production from renewable energy sources 16
APRIL 2019
TABLE OF CONTENTS

4. Energy transition in Poland
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Energy balance 17
Balance of domestic of electricity production and consumption 18
Change in electricity demand 19
Change in peak power demand 20
Emissions 21
Total national greenhouse gas emissions 22
Power and heating sector greenhouse gas emissions 23
Power sector gas and dust emissions 24
Electricity prices 25
Comparison of spot electricity prices on neighbouring markets 26
Power sector fuels 27
Domestic production of hard coal 28
Trade balance of steam hard coal 29
Domestic consumption of steam hard coal in 2017 30
Domestic natural gas consumption 31
Supply of natural gas 32
APRIL 2019

5. Energy transition in Poland
5
Foreword
We are pleased to present you the second edition of our review of the most important data describing the condition of the energy transition in Poland.
Lastyear’sreportindicatedaslowbeginningoftheprocessofchangesinthePolishpowersector.However,thisyear’sdataareinterpretedinadifferent
way. The figures confirm that the current energy model is coming to an end, but it is still not clear what will come instead.
The trend of gradual decrease in the share of coal and diversification of the energy mix continued. However, this is not the result of the commitments
made by our country until 2020 and 2030. The direction of the changes is neither consistent with the objectives of the Winter Package. Changes of
the Polish energy mix do not result from the growing role of RES, but from the increased use of gas units.In 2018, the volume of electricity from new
RES investments was symbolic. Greenhouse gas emissions were increasing.
I particularly encourage you to have a closer look at the coal import data. Growing imports have not been off the front pages of the newspapers in the
last year. In our report, we demonstrate that simultaneously to beating import records, mainly from Russia, Poland is no longer an exporter of this fuel.
For decades we have learned to think of coal as a pillar of energy security and trade balance of our country. The facts we have gathered prove that it
is time to forget about it.
Yours faithfully
Joanna Maćkowiak-Pandera
President of Forum Energii

6. Energy transition in Poland
6
Main conclusions
• The share of imports in covering domestic energy needs is increasing. Record imports of electricity, coal and gas were noted.
• Energy mix diversification is progressing towards greater utilization of gas units. The share of coal remains unchanged.
• Greenhouse gas emissions are on the rise, including in the power sector.
• In 2018, the share of RES in Polish energy mix did not grow. New investments are missing.

7. Energy transition in Poland
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Generation capacity

8. Energy transition in Poland
8
Installed capacity in the Polish system in 2018
• The share of installed capacity in lignite and hard coal decreased from 72% in 2017 to 70% at the end of 2018.
• The share of installed capacity of gas units increased by 1 p.p.
Source: based on data of the Agencja Rynku Energii S.A. (ARE).
As of 31.12.2018
HYDRO
1.0 GW
2.2%
ONSHORE WIND
5.8 GW
13.2%
BIOGAS
0.2 GW
0.5%
BIOMASS
0.9 GW
2.0%
PHOTOVOLTAICS
0.6 GW
1.3%
HARD COAL
21.8 GW
49.3%
LIGNITE
9.3 GW
21.0%
NATURAL GAS
2.6 GW
6.0%
OTHER INDUSTRIAL
0.6 GW
1.4%
PUMPED-STORAGE
1.4 GW
3.2%
RES
8.5 GW
19.2%

9. Energy transition in Poland
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Change in installed capacity in 2018 as compared to 2017
• The increase in installed capacity in gas units is a result of the completion of the investment in the industrial CHP plant in Płock.
• The installed capacity of photovoltaic panels increased by more than 80% year-to-year.
-200
-100
0
-88
585
271
0 0 0
-8
17 17 10
100
200
300
400
500
600
700
MW
NATURAL GASLIGNITEHARD COAL PUMPED
-STORAGE
BIOMASSHYDRO ONSHORE WIND PHOTOVOLTAICSBIOGASOTHER
INDUSTRIAL
Source: based on data of ARE.

10. Energy transition in Poland
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Changes in installed capacity
• In the last decade, new capacities consisted of mainly RES and gas-fired industrial units.
Source: based on data of ARE.
* Since 2016, the “industrial” category has been disaggregated by fuel type.
GW
0
20
30
40
50
10
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
NATURAL GASLIGNITEHARD COAL PUMPED-STORAGEINDUSTRIAL RES

11. Energy transition in Poland
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Changes in installed RES capacity
• The installed PV capacity tripled to 560 MW in 2016-18.
• Other renewable sources development is halted since 2016.
Source: based on data of ARE.
0
6
7
8
9
2
3
4
5
1
GW
BIOMASSHYDRO ONSHORE WIND PHOTOVOLTAICSBIOGAS
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

12. Energy transition in Poland
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Electricity production

13. Energy transition in Poland
13
HARD COAL
83.5 TWh
49.1%
LIGNITE
49.4 TWh
29.1%
NATURAL GAS
12.2 TWh
7.2%
OTHER INDUSTRIAL
2.9 TWh
1.7%
PUMPED-STORAGE
0.4 TWh
0.2%
HYDRO
2.0 TWh
1.2%
BIOGAS
1.1 TWh
0.7%
BIOMASS
3.8 TWh
2.3%
BIOMASS
COFIRING
1.5 TWh
0.9%
ONSHORE
WIND
12.8 TWh
7.6%
PHOTOVOLTAICS
0.3 TWh
0.2%
RES
21.6 TWh
12.7%
Electricity production in 2018
• Coal is the most important fuel in electricity production - its share was 78.1% compared to 78.4% in 2017.
• The importance of gas is growing. Its share in the energy mix was 7.2% compared to 5.6% in 2017.
• The share of RES in electricity production decreased to 12.7% from 14.1% in 2017.
Source: based on data of ARE.

14. Energy transition in Poland
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Change in electricity production in 2018 as compared to 2017
• The decrease in lignite production results mainly from the shutdown of the Adamów power plant.
• The decrease in production from onshore wind power plants is related to unfavourable legal regulations and less wind.
• The production of electricity from coal and gas increased after the completion of the Kozienice power plant and the CHP plant
in Płock.
-3000
-2000
-1000
0
1000
2000
3000
GWh
2383
2683
-65 -57
96
355
-317
-2061
135
-589
-2847
NATURAL
GAS
LIGNITEHARD COAL PUMPED
-STORAGE
BIOMASS
COFIRING
HYDRO BIOGAS PHOTOVOLTAICSONSHORE
WIND
BIOMASSOTHER
INDUSTRIAL
Source: based on data of ARE.

15. Energy transition in Poland
15
Changes in electricity production
• In the last decade, the share of natural gas in the energy mix has increased significantly.
• The changes in other sources were minor.
Source: based on data of ARE.
* Since 2016, the “industrial” category has been disaggregated by fuel type.
20
0
40
60
80
100
120
140
160
180
TWh
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
NATURAL GASLIGNITEHARD COAL PUMPED-STORAGEINDUSTRIAL RES

16. Energy transition in Poland
16
Changes in electricity production from renewable energy sources
• In 2018, the lowest production and the lowest share of RES in the mix after 2014 were noted.
Source: based on data of ARE.
0
5
10
15
20
25
30
TWh
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
BIOMASSHYDRO ONSHORE WIND PHOTOVOLTAICSBIOGAS BIOMASS COFIRING

17. Energy transition in Poland
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Energy balance

18. Energy transition in Poland
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Balance of domestic electricity production and consumption
• In 2018, electricity production remained at the 2017 level.
• The growing demand for electricity was covered by imports. The net import volume increased two-and-half-fold.
Source: based on data of ARE.
145
150
155
160
165
170
175
180
TWh
PRODUCTION CONSUMPTION
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
5.7 TWh
2.3 TWh

19. Energy transition in Poland
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Change in electricity demand
• In 2009-18 the demand for electricity in Poland increased on average by 1.6%, and last year by 1.8%.
• GDP is growing faster than electricity demand.
Source: based on data of ARE and Główny Urząd Statystyczny (GUS).
-2.6%
4.5%
1.4%
0.5% 0.5% 0.8%
2.1% 2.4% 2.4% 1.8%
5.4% 5.4%
7.9%
6.6%
1.7%
3.8% 3.8% 3.1%
4.8% 5.1%
149.4
156.1
158.3 159.1 159.9
161.3
164.6
168.6
172.7
175.8
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
100
110
120
130
140
150
160
170
180
TWh
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
ELECTRICITY DEMAND GROWTH y/y GDP GROWTH y/yELECTRICITY DEMAND

20. Energy transition in Poland
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Change in peak power demand
• The annual maximum peak power demand in the Polish system is growing - in 2018 it reached a new record level of 26.45 GW.
• The problem of rapidly growing peak power demand in summer is worsening.
Source: based on data of the Polskie Sieci Elektroenergetyczne S.A. (PSE).
18
20
22
24
26
28
GW
ANNUAL MAXIMUM SUMMER PERIOD MAXIMUM
4.8 GW
2.7 GW
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

21. Energy transition in Poland
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Emissions

22. Energy transition in Poland
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Total national greenhouse gas emissions
• In 2017, total greenhouse gas emissions increased by 16 million tonnes or about 4% compared to the previous year.
• The upward trend has been continuing since 2014.
Source: based on data of the European Environment Agency (EEA).
0
100
200
300
400
500
600
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
mlntonnesofCO2
equivalent
-28%
-12%
+4%

23. Energy transition in Poland
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Power and heating sector greenhouse gas emissions
• Emissions from the power sector increased in 2017 by 1% compared to 2016.
• Emissions from the heating sector remain constant.
Source: based on data of EEA.
0
50
100
150
200
250
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
POWER AND CHP PLANTS HEAT ONLY BOILER PLANTS
-29%
-74%
-73%
-15%
-22%
-7%
mlntonnesofCO2
equivalent

24. Energy transition in Poland
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Power sector gas and dust emissions
• In 2016, over 40% reduction in SOx
emissions was observed. Emission reductions result from the implementation of the Industrial
Emissions Directive.
• In 2016, the trend of slow NOx
and dust emission reduction continued.
0
100
200
300
400
500
600
700
800
thousandtonnes
SOX
NOX
DUST
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: based on data of GUS.

25. Energy transition in Poland
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Electricity prices

26. Energy transition in Poland
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Comparison of spot electricity prices on neighbouring markets
• In 2018, the whole region experienced a significant increase in electricity prices.
• It is evident that prices on neighbouring markets in the European Union are progressively levelling out,
as a result of the functioning of the internal electricity market.
Source: based on data of Towarowa Giełda Energii S.A. (TGE), European Energy Exchange AG (EEX), Nordpool, OTE, a.s.
0
Quarter
10
20
30
40
50
60
70
I II III IV I II III IV I II III IV I II III IV I II III IV
2014 2015 2016 2017 2018
€/MWh
SWEDEN LITHUANIA GERMANY CZECHIA SLOVAKIAPOLAND

27. Energy transition in Poland
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Power sector fuels

28. Energy transition in Poland
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Domestic production of hard coal
• In 2018, hard coal production decreased by 2 million tonnes compared to 2017.
Source: based on data of GUS and Polski Rynek Węgla
0
10
20
30
40
50
60
70
80
90
mlntonnes
COKING COALSTEAM COALTOTAL HARD COAL
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

29. Energy transition in Poland
29
Trade balance of steam hard coal
• Steam coal imports are a record high, with over 78% of the volume coming from Russia. Other main import directions are Colombia,
the USA and Kazakhstan.
• Exports from Poland are the lowest in 15 years.
IMPORTEXPORTmlntonnes
0
4
8
12
16
20
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018*
20
16
12
8
4
0
-
CZECHIA
CZECHIA SLOVAKIA AUSTRIA GERMANY
RUSSIA OTHERS (IMPORTS)
OTHERS (EXPORTS)
IMPORT:
EXPORT:
Source: based on data of Eurostat.
*preliminary data

30. Energy transition in Poland
30
Domestic consumption of steam hard coal in 2017
• Almost half of the steam coal, 30.7 million tonnes, was used to generate electricity.
• Over 40% of the volume, i.e. 25 million tonnes, was used for heating purposes.
Source: based on data of GUS and Polski Rynek Węgla.
HOUSEHOLDS
10.2 mln tonnes
16.5%
HEATING SECTOR
12.3 mln tonnes
19.9%
POWER SECTOR
30.7 mln tonnes
49.5%
OTHER INDUSTRIAL
6.3 mln tonnes
10.1%
OTHER
2.5 mln tonnes
4.0%

31. Energy transition in Poland
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Domestic natural gas consumption
• In 2017, the consumption of high-methane natural gas increased to 16.4 billion m3
, i.e. by over 25% in 9 years.
• In the same period, domestic production decreased by 18% and amounted to 1.7 billion m3
.
• Nitrified natural gas comes entirely from domestic production. Its use is at a constant level of approx. 3.8 billion m3
annually.
Source: based on data of GUS, Energy Regulatory Office (URE), and Ministry of Energy.
21.1%
8.5%
15.7%
52.1%
2.4% 0.2%
INDUSTRIAL
SERVICES
POWERHEATING SECTOR
HOUSEHOLDS
OTHER TRANSPORTATION
0
3
6
9
12
15
18
21
24
2009 2010 2011 2012 2013 2014 2015 2016 2017
billionm3
NITRIFIED
HIGH-METANE (EXCHANGE BALANCE)
HIGH-METANE (DOMESTIC)
2017

32. Energy transition in Poland
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Supply of natural gas
• Imports from the East account for more than 50% of gas supplies.
• In 2017, imports from other directions increased, mainly due to contracts for the purchase of liquefied gas.
Source: based on data of GUS, URE, and Ministry of Energy.
2016 2017
DOMESTIC
PRODUCTION
45.9 TWh
22.6%
DOMESTIC
PRODUCTION
44.9 TWh
21.0%
GERMANY
28.3 TWh
14.0%
GERMANY
37.9 TWh
17.8%
NORWAY
0.9 TWh
0.4%
OTHER EU-28 MEMBERS
0.1 TWh
0.03%
OTHER EU-28 MEMBERS
1.3 TWh
0.6%
NORWAY
0.9 TWh
0.4%
USA
1.0 TWh
0.5%
QATAR
11.1 TWh
5.5%
THE EAST
116.7 TWh
57.5%
QATAR
16.9 TWh
7.9%
THE EAST
110.4 TWh
51.8%

33. Energy transition in Poland
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34. Energy transition in Poland
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Notes

35. Energy transition in Poland

36. Energy transition
in Poland
Edition 2019