Dispatch from Poland | November '24
***Our weekly Dispatches provide an overview of the most relevant recent and upcoming developments for the shift to climate neutrality in selected European countries, from policy and diplomacy to society and industry. For a bird's-eye view of the country's climate-friendly transition, read the respective 'Guide to'.***
Stories to watch in the weeks ahead
Stories to watch in the weeks ahead
- EU Council presidency – On 1 January 2025, Poland will take over the presidency of the Council of the EU. “Our main message is security in seven pillars: military, energy, food, economic, health, information and civil security,” Magdalena Sobkowiak-Czarnecka, deputy minister for EU affairs, told Rzeczpospolita, one of Poland's leading daily newspapers. Poland's priorities are securing funding for strengthening the country’s eastern border and imposing another package of sanctions on Russia. It also wants to kickstart EU accession talks with Ukraine. In terms of energy, Poland is pushing for classifying nuclear energy as a green energy source, the newspaper reported.
- Electricity prices – Poland’s government has approved a bill to extend the freeze on electricity prices for households into 2025 by extending a price cap of 500 zloty (114.92 euros) per megawatt-hour (MWh). Initially, the freeze also covered businesses, and prime minister Donald Tusk said it was needed to ensure the economy remained competitive. Tusk argued that the next U.S. administration under president-elect Donald Trump might further lower domestic energy prices through expansive fossil fuel policies, which would compel Poland to react. The bill now approved by the government in Warsaw, however, would end the price freeze for businesses, local authorities and hospitals. The freeze will cost Poland, which has been placed under the EU’s excessive deficit procedure, 5.5 billion zloty (1.3 billion euros). Critics argue the policy avoids addressing structural issues in the energy sector, and discourages investments in more efficient energy systems. The bill has already been approved by the Sejm, the lower chamber of Poland's parliament. Next, it will proceed to the Senate for approval and then require the signature of president Andrzej Duda to become law.
- Wind power - Władysław Kosiniak-Kamysz, Poland’s deputy prime minister and head of the ruling coalition member Polish People's Party (PSL), announced that his party will table a proposal to reduce the minimum distance between new wind turbines and residential buildings from 700 to 500 meters to make it easier to build onshore projects. Separately, the climate ministry is working on a similar solution and wants the government to adopt it by the end of the year. The ruling coalition had already tried once to relax the rules, but following a fiery dispute, it abandoned the project.
The latest from Poland – last month in recap
The latest from Poland – last month in recap
- Financing nuclear energy - Plans for funding the construction of Poland's first nuclear power plant on the Baltic coast are beginning to take shape. Between 2025 and 2030, 30 percent of the projected costs -- 60.2 billion zloty (13.9 billion euros) -- will come from state coffers, while the remainder will be covered by foreign loans. The U.S. Export-Import Bank (70 million zloty/16.2 million euros) and the U.S. International Development Finance Corporation (4 billion zloty/950 million euros) have expressed initial interest in providing support. Meanwhile, Westinghouse, the U.S. company that Poland has chosen as its international partner in the project, placed first orders with Polish suppliers.
- Nuclear cooperation - Poland and Japan have signed a memorandum of understanding for collaboration on nuclear energy development, focusing on skill-building, technology exchange and public education about nuclear safety. This deal, however, does not entail Japan’s direct involvement in constructing a nuclear plant.
- Grid improvement - Polish state energy giant Orlen has secured an 800-million-euro loan from the European Investment Bank (EIB) to modernise electricity distribution networks, focusing on expanding renewable energy connections and integrating smart grid technologies in the north and the centre of the country. The funds, disbursed over three years, aim to address challenges like grid overload caused by rapid growth in renewable micro-installations, which exceeded 11.3 GW in 2023. These upgrades will enhance energy security and support distributed generation, says the company.
- Batteries - Swedish battery maker Northvolt has announced the closure of its energy storage development and production business in Poland and Sweden following its recent Chapter 11 bankruptcy filing in the U.S. The move will result in job losses at factories in Gdańsk, Poland, and in Sweden, although Northvolt plans to retain its Business Scaling Centre in Gdańsk. In recent years, Poland has emerged as Europe’s production hub for lithium-ion batteries. The booming sector, however, faces challenges relating to falling demand for electric vehicles in Europe, fierce competition from Asia and EU regulation that will potentially make Polish-made batteries less attractive for eco-conscious consumers and shareholders because of the country’s emission-intensive national electricity mix.
- Dunkelflaute – At the start of November, Poland was affected by a so-called “dunkelflaute” - a period with very little wind and sunshine. Electricity production from renewable power sources dropped to the lowest level of the year, while electricity prices and emissions surged. On 6 November, PSE, Poland's grid operator, for the second time ever called on all units with a power obligation to increase production, thus avoiding supply interruptions.
Alicja’s picks – highlights from upcoming events and top reads
Alicja’s picks – highlights from upcoming events and top reads
- The share of Poles willing to make personal sacrifices to combat climate change has sharply declined to five percent in 2024, from 13 percent in 2022, a report entitled “Earthlings attack” (Ziemianie atakują) shows. The authors pin the fall on an overload of negative information to which Poles have been exposed to over the past two years, including the war in Ukraine and stubbornly high inflation. Mateusz Galica, who led work on the report, told Rzeczpospolita daily the findings show that there is a need to “stop scaring people and lecturing them, hoping to make them feel responsible for the planet.”
- Pekao Bank's analytical department published a report, which it called a “response” to Mario Draghi’s influential report for the European Commission. The authors present the issue of European competitiveness from the perspective of Poland, which has been a poster child of economic growth over the past 30 years. Pekao’s analysts argue that as the EU loses ground to China and the U.S., Poland faces challenges, including a strong zloty, rising wages and the need to shift from cost-based competitiveness to innovation-led growth. The country also struggles with low patent output and an underdeveloped capital market.
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