Much Ado About Nothing … in the energy sector
William Shakespeare’s play was written in 1598 and is considered a classic comedy of its time. It features fast-paced action set in Messina (Sicily) and a series of comedic storylines revolving around love affairs. Shakespeare also uses a number of wordplay devices in English that are difficult for us to notice – the word “nothing” itself can be read in a slightly different way and refer to intrigue or gossip, or even something else entirely (I encourage you to look it up). In Poland, mainly the title has survived, and we know how much of it is just noise and lack of results. So we have a few such “nothings” in the energy sector.
Direct line
Widely advertised as a remedy for energy problems, the possibility of directly connecting an industrial plant to a power plant (of any type), with a potential estimated at up to 3GW of transmission capacity by 2030. After a tough battle, a law was passed in July 2023 and the first applications for direct lines were submitted to the Energy Regulatory Office. The result to date is two lines, with three other applications under consideration. The most spectacular is the connection of a 1 MW photovoltaic farm to a production plant, but the company does not want to disclose any details. The idea is being killed by the cost of the line itself, which is, of course, covered by the factory.
Cable pooling
The possibility of connecting different installations (generation) to the grid via a single cable – especially a combination of photovoltaics and wind power (which tend to operate at different times of the day). Ultimately, the August 2023 law is intended to solve the problem of lack of connection capacity and accelerate the transition to renewable energy sources. As of today, I see information (I may be mistaken) about two cable pooling projects, with the usual legal complications and procedures. Perhaps more storage projects (and facilitations for storage in cable pooling) will kick-start the business.
Biogas and Biomethane
A game changer for the Polish energy sector for years. I remember seeing a study (over 25 years ago) that predicted 2000 MW of biogas production in Poland by the year 2000 😊. Today, it is 2025, and we have about 180 biogas plants and one biomethane plant, which is unlikely to easily meet the KPREiK plans, which call for 15,500 GWh from biomethane in 2030.
Green Hydrogen
The Polish Hydrogen Strategy for 2030, adopted in November 2021, assumed 50 MW in installed hydrogen production facilities in 2025 (and 2 GW in 2030!), but also over 100 hydrogen buses and a minimum of 32 stations.
The results are negligible (perhaps only the number of so-called Hydrogen Valleys has been filled), and poor at the European level as well—green hydrogen is lagging behind, with China now leading the way.
In order not to bore anyone any further, it is not worth introducing too many threads and actors, so we can skip the so-called “clean coal technologies” (see Appendix 2 to the mining restructuring agreement) and, of course, the flagship project of the Polish nuclear energy sector with side threads such as SMR and HTGR (the Polish high-temperature reactor), not to mention the details of smart grids (in the smart metering variant – I recommend the 2012 studies) and, of course, the whole concept of changing suppliers and saving on energy bills.
For art lovers, especially comedy, the energy sector is a gold mine.
Poland is built on subsidies… What would the country look like without subsidies…
In a way that is imperceptible to all of us, Poland has become a country where everything has to be subsidized. It turns out that nothing can be produced, nowhere can you live, and nothing can be bought without additional money.
Energy and mining are, of course, among the leaders
– coal mining alone requires support for the restructuring of the sector (in 2025, PLN 9 billion is planned to be allocated, but in reality it will probably consume at least PLN 11 billion)
– due to the fact that we subsidize coal (which accounts for over 50% of the mix – of course, also in a mixture of hard coal and lignite) energy prices are not entirely market-based, but since they are too high anyway, we are freezing prices for individual households (at PLN 500/MWh) and for local government units – PLN 693/MWh (which will cost approx. PLN 3.5 billion in 2024, and probably similar this year)
– due to high prices (this is a deep conviction of the public, because the Chinese pay less), we also subsidize energy-intensive industries (approximately PLN 1 billion)
– that is why we are transforming the energy sector by subsidizing renewable energy (programs for individual customers) such as Mój Prąd 6.0 (PLN 1.85 billion), “Czyste Powietrze” (PLN 10 billion), “Moje Ciepło” (only PLN 600 million here) and others such as Stop Smog or Ciepłe Mieszkanie (Warm Home), where you can even get confused and mistakenly apply to Mój Smog (My Smog) and Ciepły Prąd (Warm Electricity).
– In transforming the energy sector, we must not forget about large renewable energy installations (mainly technology loans in various projects with different names), but also through price guarantees, e.g. for offshore wind farm investments – here too, direct support from the National Recovery Plan (loans and direct infrastructure support)
– for the whole thing to work, it is necessary to support conventional energy on the power market (PLN 6.4 billion in 2025, but this is taken from consumers’ bills – who complain that their bills are too high and demand subsidies) and through the expansion of transmission and distribution networks (mainly subsidies from the NRP (over PLN 4 billion for network expansion in rural areas, PLN 1.3 billion for transmission networks, PLN 4 billion for energy storage and related infrastructure, and PLN 500 million for the digitization of heating networks)
– thanks to the successful transformation, we can also increase the number of cars and promote the development of electromobility (2 billion for the development of charging stations, 1.6 billion in “NaszeAuto” as subsidies for cars – interestingly, larger subsidies can be obtained by holders of the Large Family Card)
The above list is certainly not exhaustive, but I need to eat something and take a look at agricultural subsidies – where we have energy programs such as “Energy for the Countryside” and “Agroenergy,” but above all, we pay for the cultivation of land itself (basically over €100 per hectare, but also for young farmers (€58/hour) and for tobacco and for each cow (€98.64 per spotted cow) and over €11 per goat and for hops and flax and starch potatoes (over €380/ha). In addition, further subsidies are available for organic farming and animal welfare, water retention and areas with honey plants.
Subsidies also cover children (800+) and their school supplies, newborns (baby bonuses), the “Active Parent” program, as well as subsidy opportunities for seniors (a wide range of benefits). Let’s not forget about holiday vouchers, additional coupons for visiting certain parts of Poland (the Podlasie Tourist Voucher, for example) and dozens of other types of subsidies at the central and local government levels. It is easy to get lost here, but there is, for example, “1.4 Design in SMEs – Eastern Poland” – PLN 100 million to support folk design.
The most interesting thing, however, is that the majority of the population is both for and against subsidies.
Programs such as 800+, additional salaries and pensions are treated as standard and unnoticeable (so-called “dog soup”). Subsidies for mining are not included in the discussion at all – rather, trade unions always report how much mining has paid in taxes (without deducting subsidies) and that these taxes need to be reduced. Farmers are protesting violently against European policy, blaming the Green Deal for all natural disasters, including cattle plague, while receiving 40-60% of their income from subsidies and grants. The money from subsidies is treated as “manna from heaven” with no connection to taxes or the budget deficit. Some political parties are radically demanding tax cuts and simplification of the system, but in the minds of their voters, this does not apply to the money paid out in subsidies (more of this is needed, and everyone will take it). Finally, it is worth noting the positive impact of subsidies on combating unemployment – in real terms, almost 40-50,000 people in Poland are currently employed in the sector of receiving and processing subsidy applications and various types of compensation.
As can be seen, Poland will continue to be dependent on subsidies for decades to come, and even artificial intelligence will not help here.