The new government faces a long list of decisions to make. Neglected renovations of the power plant, poor condition distribution networksunfinished project of separating coal assets and going bankrupt mining. In addition, there is pressure to reduce electricity prices. Each of these areas requires immediate decisions and large financial outlays.
The situation is difficult, but not hopeless. The first step of the new government should be to revise the approach to coal adopted by PiS. Without developing a real strategy and dispelling the myths, the next team will get stuck in poorly allocated costs, impossible to fulfill and socially unfair promises. It will not be able to prepare much-needed strategic documents – Long-Term Low-Emission Strategy, State Energy Policy, National Energy and Climate Plan and Heating Strategywhich are key to directing much-needed investments in Poland.
Mining with a social contract
The mining industry is demanding further support in the amount of PLN 7 billion, threatening bankruptcy – despite record coal prices in the last two years. PiS’s strategy was based on avoiding decisions, despite clear market signals regarding the deteriorating prospects for coal, and on adapting to the expectations of trade unions – at the expense of citizens.
The so-called the social contract agreed in 2021 was introduced without a regulatory impact assessment and would burden the entire Polish society with the costs of supporting this sector for the next 25 years. However, it is impossible to implement due to limited coal resources and conflict with EU regulations related to public aid. They do not allow support for mining from public funds (although the sector could still operate on market principles).
Are subsidies a bad idea?
A poorly constructed social contract will increase anxiety in the mining industry, and investments will not be made on its basis anyway. First of all, however, it will have a negative impact on the energy sector, maintaining coal-fired units will become more and more expensive, and the risk of unbalancing the national energy system will be higher and higher. Renewed subsidies for mining not only do not bring Poland closer, but also further away from solving systemic problems.
The situation in the energy sector has never been as difficult as it is today. What should be done to fix it? More on this later in this article on WysokieNapiecie.pl
