What are the biggest social and economic challenges of energy transformation? Where is Poland in this area? Can energy transformation be a factor weakening Europe’s competitiveness? Where can we get funds from and what are the biggest investment barriers in the energy sector? The participants of the meeting sought answers to these questions, among others:
- Wanda Beechindependent expert;
- Andrzej Czerwinskiformer Minister of the State Treasury;
- Maciej KlisVice-President of the Management Board of Bank Gospodarstwa Krajowego;
- Janusz PiechockiMayor of the City and Commune of Margonin;
- Thomas SurmaDirector of Regulatory and Public Relations, Veolia.
The moderator of the debate was Urszula JozwiakPresident of the Management Board of the XBW Ignacy Krasicki Foundation, expert at the ESG Institute.
– The climate crisis is still getting worse. Consumption and production in the world are constantly growing, since 1750, when humanity began the mass burning of fossil fuels, the concentration of carbon dioxide in the atmosphere has increased by about 50 percent. This contributes to climate change, which is currently the greatest challenge facing humanity – the president began the debate Urszula Jozwiak. – Sustainable energy production is a so-called must have. Unfortunately, the transition from traditional fossil fuels to renewable energy sources will not be easy, especially in our country. In Poland, almost 70% of energy production is still based on coal, and its withdrawal from the energy sector is planned for 2049. What are the greatest social and economic challenges of the energy transformation from your perspective? – asked Jóźwiak.
Supply Chains. Green but Poor?
Wanda Beech She pointed out that the first challenge is the cost of financing the transformation, with, for example, sub-Saharan Africa being several times higher than in Europe, the United States or Japan. The second challenge is access to rare earth minerals and the related supply chain. The expert pointed out that in Europe over 90% of photovoltaic installations were manufactured entirely or partially in China. – It may turn out that yes, we will carry out the energy transformation and perhaps Europe will be the first to do it effectively, but in 2050 it may wake up as green, and at the same time very poor and very dependent – warned Wanda Buk.
During the debate, the expert pointed out that the social problem is not fear of new technologies, but of moving away from the reality in which we have functioned for most of our lives. In her opinion, assertiveness and courage are needed in presenting the future of energy to citizens. “We must not bury our heads in the sand,” she emphasized.
Agreement is the basis
– The calls have not changed for years. Everyone who sat in the decision-maker’s chair announced that they would now develop a stable energy policy. That’s how it started. And that’s how it ended – he noted Andrzej Czerwinski. He recalled that the previous PO-PSL government had developed a road map of transformational changes, which were however abandoned by the next coalition. He also recalled that the 3×20 energy and climate package was adopted in Europe, on which many people decided to do business. – The concessions that were in force at that time were purchased not to build sources of generation, but to sell them for a large profit. It ended up that there were 10 times more decisions on the location of renewable energy production than the installed capacity in Poland – said the former minister. In his opinion, no government will be able to carry out the energy transformation without an agreement with important interested groups, with local governments playing a particularly important role.
Mentality as an obstacle
Vice President Maciej Klis assessed that one of the biggest obstacles to the transformation is the issue of its financing. Projects concerning renewable energy sources usually require a multi-level financing structure, which cannot be satisfied from a single financial source. Hence, BGK, which is very strongly focused on investments related to renewable energy sources, emphasizes cooperation with financial consortiums and public-legal cooperation, which ensures much greater effectiveness of financing. Especially since the complexity of the investment process very often puts off many of those interested in green investments. – Apropos the moderator’s question, I must also say that a very big obstacle to the transformation is the element of mentality. Very often each of us comes across the view that the transformation is some kind of green terrorism that brings us to the bottom. The problem of mentality is one of the biggest obstacles that we must overcome together – stated Vice-President Kliś.
Four challenges
Director Thomas Surma he listed four important threads for the transformation: strategy, regulations, financing and justice. The expert noted that companies such as Veolia know how to carry out the transformation, but without a national strategy, implementing the plans will be very difficult and more expensive. – As an international concern, we observe various markets and see how important it is to have a stable, predictable energy policy and a strategic document, how it affects financing costs – he said. The lack of stability causes an increase in the regulatory and political risk index, which is valued in money. On the other hand, the shape of the regulations determines the direction of changes in the energy market. According to Director Surma, the currently applicable regulations should already be adapted to the current market conditions. Speaking about project financing, he assessed that although financial support programs exist, the problem for companies is finding a source of 60% of their own financing, because in Veolia alone the amount at stake is over PLN 3 billion. Referring to the thread of justice, the director stated that creating an environment friendly to financing renewable energy sources will allow for reducing fuel imports and redirecting funds to the development of other sectors of the economy.
Promises and reality
Mayor Janusz Piechocki, in whose commune the second largest wind farm in Poland is located, warned that the situation in terms of photovoltaics has not improved and may worsen. Consumers who invested in it were guaranteed to receive 80% of it, for two years it has been only 50% and the government is now planning to tax the panels. – This is another blow to consumers of small panels. I don’t know what purpose this is supposed to serve – he said. – As the commune’s administrator, I try not to disturb local business. And if you have the opportunity to help local or national business, such help is your duty. And here I see that despite great promises that it will be better, when it comes to panels and ordinary citizens, it will not be better – stated the mayor. During the discussion, he also presented the reactions of neighboring communes and residents related to the construction of the wind farm and to the intentions to build a biogas plant. While the protests against the construction of the wind farm were managed to calm down, the protests regarding the biogas plant caused the investor to withdraw.
