Have You Heard the One About the Polish Electrical Grid?
November 19, 2013
The UN Framework Convention on Climate Change is in its second week of deliberations in Warsaw, Poland – a country that derives 86 percent of its energy from coal, and doesn’t look much like it wants to change. They’re building their own iron curtain against Green energy that is flooding in from Germany….
Poland, the host of the climate change negotiations, is going to extreme lengths to protect its coal-fired electricity industry – making sudden changes to renewable energy support schemes, and even going so far as erecting a form of electronic barrier to keep renewable energy from neighbouring Germany out of its grid.
The move appears to have been made with the sole intention of protecting the economic interests of its incumbent, centralised and heavily coal reliant grid. As Germany roars towards a decentralised, renewables based grid, Poland appears determined to stick to the past. The contrast between the two countries could not be starker.
The move to install equipment knows as phase-shifters on transmission links between Poland and Germany is designed to give the Polish grid operator the power to block excess renewables output from Germany entering the Polish grid. As in Germany, a large amount of renewable energy causes wholesale prices to come down, and profits to fall.
The phase-shifters are being tested in coming months and will be installed over the next year by the German network operator 50Hertz, which looks after the grid in the eastern past of the country adjoining Poland. Ironically, 50Hertz is 40 per cent owned by Australia’s Industry Funds Management, which in turn owns Pacific Hydro, Australia’s biggest specialist renewable energy company.
Grzegorz Wisniewski , the president of the Institute for Renewable Energy, says the move is clearly designed to protect the income of the incumbents generators in Poland, and comes as the country is facing a looming energy deficit in a few years time.
Coal is given primacy in this country. WWF calculates that 95 billion zlotys (around $A30 billion) of subsidies since 1995, but Poland’s coal reserves are declining rapidly, at least the economically accessible ones. The country already imports 15 per cent of its coal needs, much of this from Siberia.
Wisniewski says the Polish government’s official forecasts are for coal to supply 65 per cent of electricity in 2060. But given its declining reserves, that is impossible. Experts say that within 20 years, the country could be entirely reliant on imports because its own reserves would be too expensive.
Recently, the Poland government recently ordered the state generation company to build a massive $3.75 billion coal plant, even though the company’s CEO said it would cause the company to lose money because of the high domestic price of coal.
All but a handful of solar farms have disappeared since that plan was rejected, hoping that the costs of solar will fall enough to allow more solar farms to be built anyway. But the industry needs momentum, and Wisniewski says, the utilities are up to old tricks.
The government recently agreed that solar systems under 40kW that lower the price of energy could be installed on the rooftops of homes and businesses with no connection fee.
But the network operators has frustrated installations by insisting application forms be stamped by a certified installer. But there is no such certification system in Poland, so no connections are being made.
That’s not dissimilar to a ruse used by another utility against GEO Renewables. They won approval for a new wind farm, but the utility insisted that the project deliver 45 per cent of its output within “peak hours” of 8am to 8pm, or face a penalty. “That’s not even in the regulations, “Bladek said.
But Wisniewski says such actions - including the creation of a “Berlin Wall” type barrier to keep out German green energy – are just delaying the inevitable. “They can stop renewables for a few years, but not forever.”
Scientists, UN officials and green groups said coal reserves must be left in the ground if the climate is not to overshoot the internationally agreed safe maximum temperature increase of two degrees Celsius over pre-industrial levels.
Christiana Figueres, executive secretary of the UN Framework Convention on Climate Change, who had left the climate talks to address the Coal and Climate Summit, had an uncomfortable message for the assembled chief executives of coal companies.
“I am here to say coal must change rapidly and dramatically for everyone’s sake,” she told them. Coal use could continue only if carbon dioxide was captured and stored, otherwise the world should switch to wind and solar, which she said were already competitive on cost in many parts of the world.
During the coal summit 27 of the world’s leading climate and energy scientists issued a statement saying investment in new coal plants without capturing the carbon dioxide emissions from them was unacceptable.
One of them, Dr. Bert Metz, a former co-chair of the Intergovernmental Panel on Climate Change (IPCC), said even the most efficient coal plants were unacceptable if the climate was to be kept safe—they were twice as polluting as gas and 15 times more so than renewables. Alternatives to fossil fuels are readily available and affordable, he said.
Beata Jaczewska, head of the Polish delegation at the climate talks, defended her Government’s decision to call a coal summit at the same time as the climate talks by saying that “coal has to be part of the solution.” Poland produces 86 percent of its electricity from coal.
Environment campaigners exposed what they called “the hypocrisy of banks” in claiming they care about the climate while providing billions of dollars to finance new coal mines, underwrite share issues and even own mines themselves.
A report, Banking on Coal, published by Urgewald, the Polish Green Network, BankTrack and CEE Bankwatch Network, “provides a who’s who list of the financial institutions undermining the Earth’s climate system and our common future.” The report says American, Chinese and British banks are currently the biggest investors in coal, and if all the investments pay off then there is no hope of saving the planet from the ravages of global warming.
“It is mind-boggling to see that less than two dozen banks from a handful of countries are putting us on a highway to hell when it comes to climate change,” said Heffa Schücking, one of the report’s authors. ”Big banks already showed that they can mess up the real economy. Now we’re seeing that they can also push our climate over the brink.”
American Banks Lead
In the period since the Kyoto Protocol came into force in 2005 four American banks, Citi, Morgan Stanley, Bank of America and JPMorgan Chase, have been the biggest coal investors. Between them they have accumulated more than €24 billion into mining coal.
To expose their “hypocrisy”, the report says some of the banks claim to be carbon-neutral while investing in the fossil fuel that is most damaging to the planet. Citi claims to be “most innovative investment bank for climate change and sustainability.” Morgan Stanley will “make your life greener and help tackle climate change”, while Bank of America claims to be “financing a low carbon economy.”