Poland’s Energy Crossroads

Poland’s energy sector is undergoing a critical, if slow, transition after the election of Donald Tusk as prime minister exactly one year ago. Coal still dominates the mix despite a greater use of gas and a growth in renewables. Grid modernisation and energy security have taken centre stage. 

Significant challenges include high energy costs, particularly for industry. There’s also the matter of where government subsidies could, and should, be spent. Issues around policy cohesion, public and industry engagement and regional impacts all persist.

In this episode, we delve into the latest developments shaping Poland’s energy landscape. Montel’s experts provide a snapshot of the latest news, and Joanna Pandera, founder of the Forum Energii think-tank in Poland, discusses the milestones, challenges, and what Poland’s energy transition means for Europe and beyond. 

Host: Richard Sverrisson, Editor-in-Chief, Montel

Guests: Joanna Pandera, Founder and CEO, Forum Energii, Professor at European University in Florence;  Hubert Put, Senior Energy Consultant, Montel;Marcin Czekanski,Poland Correspondent, Montel

Editor: Bled Maliqi

Transcript

Richard Sverrisson, Editor-in-Chief, Montel: 0:06

Hello and welcome to the Montel Weekly podcast where we bring you the latest news issues and changes happening in the energy sector. Today we take a deep dive into Poland. The country's energy sector is at a pivotal moment, a centrist government led by former European Council President Donald Tusk is accelerating the decline of the country's mining sector. Tusk assumed office. Just over a year ago, the country plans a massive transition from coal. Via gas to renewables. The key question is, when can this actually happen? But energy security concerns remain, especially amid a wiring geopolitical situation and tighter cold and gas supply. Joining me, Richard Sverrisson and setting the scene for us in this episode is Montel's Poland correspondent Marcin Czekanski. So warm. Welcome to you, Marcin. How are you?

Marcin Czekanski,Poland Correspondent, Montel: 0:56

Hello, Richard. I'm fine. And how are you?

Richard Sverrisson, Editor-in-Chief, Montel: 0:59

Very well, very well. So very good to have you on the pod Marcin and then, and the view from Poland.

Marcin Czekanski,Poland Correspondent, Montel: 1:04

Thank you very much. I'm delighted to be here.

Richard Sverrisson, Editor-in-Chief, Montel: 1:06

We are one year on from Donald has taking office as Polish Prime Minister. So what can you talk us through the changes in, in, in Poland's energy sector in that time?

Marcin Czekanski,Poland Correspondent, Montel: 1:15

Frankly speaking Richard there hasn't been many changes. I mean, it's like the Polish government trying to preserve the status quo state is the main actor in PO in both power generation, wholesale power market, and also owns power grids, which is I would say a fundamental problem not addressed by the new government. So nothing happened so far in terms of addressing this change. Even after a year, we still have the ban on onshore wind on. There, there are works on a change of overall, but it's, they are progressing very slow. Pond has a major challenge ahead in late 2020, closer to 2030, which would be a generation gap cause a few NIGOs of coal fired plants will lose capacities, subsidies, and since they are unviable Poland has really no idea how to address this issue apart from deploying really sizable. Renewables fleet of 31 gigawatts. At the moment, we have no flexible power plants to step in when sun doesn't shine or when wind stops blowing. So we are currently using coal-fired plants, which. Have to be kept running even at the times when renewables are ready to provide almost full load to the system.

Richard Sverrisson, Editor-in-Chief, Montel: 2:37

Excellent, Marcin, and if you could summarize for us, Marcin, what are the two main challenges for Poland when it comes to making the switch from coal to renewables?

Marcin Czekanski,Poland Correspondent, Montel: 2:46

So the first challenge would be the generation cap in late 2000 twenties. There is really no solution on the horizon. And the second problem is fundamental that the state's ownership in power generation grids. And also we have to remember that state is a legislator and tends to favor its own firms over competitors. So that's really a fundamental issue, I would say,

Richard Sverrisson, Editor-in-Chief, Montel: 3:11

Marcin. Perfect. Thank you very much for your, for views, the explanation and setting the scene in the way that you did there. Perfect. Thank you very much.

Marcin Czekanski,Poland Correspondent, Montel: 3:20

Thank you. It was a pleasure to speak to you.

Richard Sverrisson, Editor-in-Chief, Montel: 3:22

I'm now joined by Joanna Pandera, who is the founder and CEO of the Forum Energii Think Tank in Poland, as well as professor at the European University in Florence. Welcome back to the pod Joanna.

Joanna Pandera, Founder and CEO, Forum Energii, Professor at European University in Florence: 3:34

Hello, and thank you for the invitation again.

Richard Sverrisson, Editor-in-Chief, Montel: 3:37

You're very welcome. And also joining us today is Hubert Put is Senior Energy Consultant at Montel. This is your first time on the pod, Hubert. And welcome as well. A warm welcome to you.

Hubert Put, Senior Energy Consultant, Montel: 3:46

Indeed. Thank you so much, Richard. Hello listeners.

Richard Sverrisson, Editor-in-Chief, Montel: 3:49

Joanna, I'd like to start with you. This week we're almost exactly at one year into Donald Tusk's premiership. How has that impacted the energy market in Poland?

Joanna Pandera, Founder and CEO, Forum Energii, Professor at European University in Florence: 3:58

What we can see now in Poland that the share of coal is declining very fast. So there were already months where the share of coal in the electricity mix fall below 50%. So when I started to deal with energy transition was 15 years ago. It was 90%. On average this year, we will have 55% of coal in the electricity mix. And basically it was mainly replaced by renewables wind and solar. And what we can see that the pressure on energy transition is only growing. However, also what we see and basically I admitted that, many fundamental re reforms which are needed and unfortunately are still missing. We there is consultation process now ongoing on the national and climate energy plan, which is fundamental for utilities to, to plan their investments. What we can also see it's quite big interest in gas fired power plants and PSE our transmission system operator very much is looking to the conventional power plants, which can replace old coal fired power plants. So the pressure on phasing out coal is only increasing. And the subsidies for coal mining are really huge now and are growing. So this is more or less where we are now.

Richard Sverrisson, Editor-in-Chief, Montel: 5:20

Is that, is there distinct difference between this company the last, or is it more of a continuation in terms of the coals just been continuing down with it. It would've done whatever government was in place.

Joanna Pandera, Founder and CEO, Forum Energii, Professor at European University in Florence: 5:31

I think that what we can see is basically continuation. So even the previous government maybe the narrative was different because the previous government had very strong protocol narrative saying that coal will last forever. They have actually completed. Agreement with miners that the call production will last until almost 2050. Which what has changed now this year? We can see it's completely unrealistic. So this agreement was signed in 2021 and actually year ago a year later, we knew that this is completely naturalistic because market forces. Are just changing the landscape. Actually the production of coal is falling faster than assumed. And by by the way, usage of coal is also falling faster than assumed. And, it's interesting because actually these are fundamental reasons why the energy system is changing. By the way, it was never planned by Polish government. So they always published energy policies as a document which is on the one hand quite relevant because it is coming from this. Specific law, but nevertheless, it was always like a document where you actually communicate with minors and you promise them more than you can get them. And, but what you could see that the fundamental reasons why the energy system is changing are there. So even if there was this 10 h rule elaboration, which is basically limiting development of onshore wind farm despite that. Still onshore wind developed. And by the way, solar energy now it's almost 20 gigawatt in polish power system. And the interest is huge. And it also, I think, changed the perception of renewables in Poland, which are now perceived as a number one choice of the society. So once you ask people which kind of electricity they expect is basically carbon free, but it's mainly cheap renewables, which have very positive you know, under like perception and this government continues, what maybe is a difference sometimes the level of ambition and how many proposals are put on the table. This is something what I think there is room for improvement for this government. That we still wait for many bigger reforms, like divestment of the coal assets we need. We wait also for the different changes to the operation of electricity market, which will increase the investments and because we need now the pressure on phasing out coal is huge as said. So utilities, they just want to get rid of coal and, but then it's not about phasing out something only, but what to phase in. This discussion is now, how fast we can actually make the energy system to transition and what are the costs also of this very fast change because the faster, the more expensive.

Richard Sverrisson, Editor-in-Chief, Montel: 8:31

I'd like to return to some of those issues a bit later on the pod. Certainly gas and certainly solar and the solar boom we've seen in Poland. But Hubert, I'd like to put to you, there are some tough decisions ahead, don't there? The, you know, the coal fire plants are not getting any younger they're getting older. They may need to be, moth board or retired at some stage. And, installing or building new gas plants is never cheap or often not that quick. So can you talk us through some of the tough decisions and the challenges that poland's faces in the coming years in your view?

Hubert Put, Senior Energy Consultant, Montel: 9:06

Obviously, Richard, so well, as you said, there are a lot of challenges ahead of Poland and of Polish government and the Polish society as well. Maybe starting with the coal, obviously right now we are on the verge of actually putting the derion into our Polish regulatory scheme that would allow to create in the capacity auctions for the second half of the year, 2025, as well as for capacity auction year 2026 up until 2020, 28. Why is itself, why is,

Richard Sverrisson, Editor-in-Chief, Montel: 9:36

so this would be this would be, sorry to interrupt there, but this would be to explain to the listeners, this would be the auctions that are put out there to keep the plants in as a backup for keeping the lights on in a way...

Hubert Put, Senior Energy Consultant, Montel: 9:48

That is correct. Until. I would say I would say underline as well, their economic viability. Because without the capacity market, what was actually underlying one of the CEOs in on the conference one month ago by the CEO of of group, one of the leading state owned energy groups in Poland without it. It's they're not existent. They're not existent anymore because there is no business case for them. And the costs of running them are always higher than the potential the potential revenues from them. So this is something that definitely would be. Would be of a major challenge for both the industry as well as the the entire energy sector. This is the first thing. The second thing when it comes to commissioning on new gas plants, I would say it's not going as planned. So first of all, right now we have around four gigawatts of of CCTs in Poland, mainly in in chp so called combined heat and power plants. And the new West one comes from October, 2024. This is called Donna Ra, I think it was 1.2 gigawatts of the capacity. So this is something that definitely will be needed to, will be needed to cover the the capacity gap that we are heading to according to latest published sso. PSEs PSEs expectations, assumptions as well. I would say that's, that these are the most important challenges. Maybe not going into details now, but a bit further.

Richard Sverrisson, Editor-in-Chief, Montel: 11:11

No, absolutely hubert. Joanna, would you agree with that assumption that there's a capacity crunch coming? Just a few years down the road?

Joanna Pandera, Founder and CEO, Forum Energii, Professor at European University in Florence: 11:20

Actually we face a big problem with capacities as the power sector was actually frozen with different fundamental decisions for the last three years. Because previous government tried to push for, big reform, which was actually divestment of the coal assets. So many companies just, they stop thinking about coal and started to draw the green transition plans. And actually the coal fired power plants and actually remaining period for them was just did not have any anybody who would really, seriously think how to face down the call. Also, because this previous government took this agreement or signed this agreement with miners that the call will last. Until 2049. But actually how and who will pay for it was not named. And also how it also can work within the stated rules in the European Union, how much it'll cost to keep it other, any other alternatives. So it was really left completely behind. So this is I maybe capacity gap. What does it mean? So it's not maybe that the lights will go out immediately, but what we can see now that the prices are going up and the cost for balancing are growing. Capacity gap is to some extent some illustration of the situation. Also, probably to attract the attention of politicians that they really need to act, but the consequences are addressed. That the prices are going up. Now, of course, as everywhere in, in Europe, in Poland, also, we have this discussion about high energy prices. But actually yes. So this is the big challenge. The biggest challenge we have is not the households though but basically electricity prices for industry which are the highest in Europe now, by the way, not only because of fundamental reasons how electricity is generated, but also because of division of costs and taxes and different fees between households and industry. So the previous government decided that actually the cost of energy transition will be mainly covered by industry. In industrial consumers trying to release as much as possible households. So this is something completely different compared to Germany or Denmark, where the major cost of energy transition are taken by the households. And industry is is released from those fees in many cases and is treated really extraordinary.

Richard Sverrisson, Editor-in-Chief, Montel: 14:02

That, that's very interesting, general because, it's the households who vote in a sense, isn't it? Industry doesn't vote so sense. You can understand it and from that perspective but if I can just put to you before I turn to Hubert. Coal from outside looking into Poland, you said coal has been a very important part of the Polish economy. You mentioned mining, you mentioned 90% of energy generation comes from coal. Is, would it be fair to say that it's an important part or has been traditionally, but a Polish culture? It's a kind of and it's quite political. And is that changing? Sorry, that's three questions for you, Joana.

Joanna Pandera, Founder and CEO, Forum Energii, Professor at European University in Florence: 14:37

Yes, but it's a very interesting questions question. I really read a lot of books now about mining and its history in Poland. And actually I'm not I don't know if you are aware that the per first Polish coal mine was open actually 300 years ago. Actually. But still, actually it was completely different call of different quality which was just on the ground, not deep in the ground. And but of course around it. And also it is very, dangerous job. So a lot of appreciation, which came into the sector for many years related with higher salary and a lot of respect. Which this miners and workers they got from decision makers. And but of course, times have changed. And I think that what is now, so we have new technologies. So in fact, we don't have to send people to do such dangerous job. When it comes to the hardcore, because Lignite is another story. And what is probably a big challenge is how to change it. And generally we see that climate policy became a kind of a cultural war. So mining and miners, they belong also to this cultural war, in my view. The challenge is to find compromise in the polarized world where everybody only looks for controversy. So I, I see unfortunately that Poland has a very bad experiences from the past when it comes to energy transition. So there were many sectors in nineties. Which were just closed from one day to another without actually honest communication without. And actually we already had in lower saric cellia regions there were actually mine mines closed in July and August during, a holiday period because government was not at that time really brave enough to say, guys, something is ending. We just cloth. And it really created a lot of trauma in many regions. That, and I think what is now what I can see also, we speak also with minors. So they, on one hand they are demanding and they just wants to have, guarantees and this respect. But on the other, they, they say sometimes directly that they feel just cheated. So that nobody's honest with them. So it seems to be a big topic. So you were right. So it's part of I don't know if culture, but probably casual war and where actually nobody with this growing, expectations and problems of the world is really brave enough to say. This is now the strategy like of course not ending the mining from one day to another, but this is the realistic part also because the subsidies, as I said to the mining sector are really huge now. So we talk about subsidies within this year and next year at the level of, 4 billion euro or even more. So it's really huge. And on top of this you have sub, you have the capacity payments and subsidies to call fired power plants. Then miners, then freezing of the electricity prices because prices are too high. And then also subsidies for energy intensive industry. And you see the moment where actually about 10, 15% of power market values is not coming from the market, but from the state budget. So this is ridiculous situation, which in my view is completely dangerous in the sense that. The in investment signal is not right. And everybody is now waiting for subsidies in instead of saying goodbye, we are coming something new is also on the way. So this is more or less the situation.

Richard Sverrisson, Editor-in-Chief, Montel: 18:20

That's fascinating. Hubert. I mean, what can you add to this? I think it, it, you're talking billions of euros going to subsidies. Into the hands of cold fire generators. How can this go on? Or, shouldn't it, wouldn't this be better funneled into, you mentioned gas fire generation or to offshore winds or even, into other renewable forms of generation.

Hubert Put, Senior Energy Consultant, Montel: 18:42

Yes, definitely. What can I say More adding on top of what Joanna said, which I can almost totally agree. Coming back from the from the past into the future a bit, because obviously this was a part of traditional Polish culture. It's the traditions from this region, as siRNA mentioned us to cultivated. This is still a strong I would say societal impact as well, which turned in, which turns into a political lobbying as well at times of the elections, which play a. This plays a major role in the energy transition processes, which are led to some extent by the state. Obviously. However, we have to realize one thing that we are not competitive when it comes to coal market anymore. Why? Because there are three main factors. That influence the price of coal. The raw materials. So first of all, the UE value of it. Second of all, the cost of extraction of it. And the third one is the labor costs. So we are not Australia, we are not Indonesia, we are not colo. Therefore, it's not feasible anymore. But then we're having the capacity gap, we're having problems. We might have problems from 2026 as per the Polish TSO saying that we might lack 4.2 gigawatts of the capacity in 2026 and even 9.4 gigawatts in 2034. With the current the current I would say continuation of build out of new gas fired power plants. So what's next? You've mentioned offshore wind. So definitely there is a potential for that. I would say that. So maybe for those who don't know, the Polish system when it comes to the offshore wind, is divided into two parts. The first part it was where the capacity granted on an administrative basis, 5.9 gigawatts. The other one, so the second phase. It's 12 gigawatts in four auctions. Four in four auctions. Two, first of them, four gigawatts, two, the two latter of them, two gigawatts each when it comes to the first phase. So this almost six gigawatts. I do not see major risks in in building this out. There might be some delays, however not a major delay to this because the, I would say that the state is pretty is pretty motivated to. To actually commission the to actually help in commission the operation of those offshore wind power plants. The first offshore wind and energy from offshore wind will will flow probably at the end of 2026. The other power plant will be commissioned and the end of thousand 27, so I'll keep my fingers crossed for them. However, when it comes to the second phase of offshore wind, I am more skeptical. Last year's experiences from UK this year, experience from Denmark where no bids were submitted. They put a pressure, they put a risk on the government and the entire cooperation between the investors and the state. So that's why I would say that it's something that, that might be thoroughly thought. However, right now, pretty recently no not more than one week ago, there, there was a regulation that divided the maximal reference price for in, in an auctions between the l leases, which are closer to the shore and further from the shore. However, these prices are pretty low when it comes to the expectations of the investors. So that's why. I'm a bit skeptical Also, there are two more things to add here. First of all, the availability of production in H-V-D-H-V-E-C cables. So how high voltage direct current cables. And the second one, the availability of the specialized vessels that can actually transport the wind turbines off shore. So this is the first thing. When it comes to the onshore wind Johanna said that there wasn't, I would say that the deployment of this source was abated, so to say, and they were built and built. But obviously the government doesn't, 2016, put a break on it. However, right now, the entire onshore wind sector is waiting for the, is waiting for the acceptance of the 500 meters rule, which should come any minute, I would say due to the fact

Richard Sverrisson, Editor-in-Chief, Montel: 22:29

what's the 500 meters rule? Sorry to interrupt there.

Hubert Put, Senior Energy Consultant, Montel: 22:32

Yeah, no worries. Maybe let's start from the from a bit of a history. In 2016, at 10 H Rule was adopted, which meant that basically you cannot build your households or any kind of premises up until the 10th the business of 10 times the height of the turbine, and conversely it worked as well. This halted majority of the projects and now the 500

Joanna Pandera, Founder and CEO, Forum Energii, Professor at European University in Florence: 22:53

so it was about, if I may interrupt you, it was about two two and three kilometers. So just to give you the example that the distance from the house which actually resulted that 98% of the country was excluded from planning of onshore wind. Sorry. Sorry.

Hubert Put, Senior Energy Consultant, Montel: 23:12

No worries. It is great actually, because right now it would be roughly roughly reduced by 1.8 kilometers. So up to down to 500 meters, obviously which will which will create an obviously upward potential for for the entire, for data onshore with industry. Nevertheless, right now we stand at 700 meters rule, which compared to 500 meters hindered the progress of 70% of the capacity. Which is a huge number, which is a huge number. However we, some somebody from our listeners might say, oh, good. So they will just they will just the president will sign the, will, sign the act. Everything's gonna be okay, right? But. From 2027 and onwards, why is it because of the entire red tape, entire permitting procedures, entire issu issuing time. So this is another bottleneck that I see when it comes to the renewable deployment in Poland.

Richard Sverrisson, Editor-in-Chief, Montel: 24:07

Perfect. I, if I could I'd just like to talk about offshore wind with you as well, Joanna, because I think before I turn to two other big topics, which is gas and also nuclear, but I think Jon, if we go to offshore wind, I, there are as Hubert has mentioned, there are many headwinds in the sector. The zero bits in Denmark, and also in the UK had some issues, and Sweden canceled 13 gigawatts of offshore wind due to concerns over Russia and activities in the Baltics and military concerns, basically defense issues. What's the Polish position here?'cause obviously you are, closer to, to the boards with Russia than Sweden is.

Joanna Pandera, Founder and CEO, Forum Energii, Professor at European University in Florence: 24:44

The main reason that indeed as Hubert said that there is some reluctance now raised by decision energy decision makers by the head of TSO Ky. There was. Even this week an article when he said that it's just too expensive at this moment. So it's 512 slot per megawatt hour. So it's spec and actually the cost of onshore wind is about 250. So the main challenge is now related with costs, and it's not that actually offshore wind is considered as the direction not to go because seeing the potential like thore. Potential of offshore wind is huge. So it is assumed at the level of 33 gigawatt, but the challenge is the value chain and the entire cost because I also spoke with different associations recently that this is the cost calculation related with value chains of offshore wind. And the challenge is to deliver a fit. Equipment on time and the cost and the real cost which just need to be taken on board. And generally Baltic is perceived, for Poland is blessed with access to Baltic C because of many reasons I think. Exactly. It'll shift. The role of access to the sea in future, in my view, will only increase. So it's like really advantage that we can build that offshore. But the challenge is really. Cost because once you will then have 10 gigawatt within the contract for difference for the next 25 years, you are locked in with a high cost for actually rest of our life. So this is at least what I hear and what I observe in the discussion. So it should be much more competitive.

Richard Sverrisson, Editor-in-Chief, Montel: 26:32

So it's more about cost than security. Yeah. So Joanna, just. We, last time I had you on the fod, we talked about the energy crisis and the impact that was having on Poland. How has the, for example in, in terms of the gas market, how has Russia, how has Poland coped with with, the cut in Russian gas.

Joanna Pandera, Founder and CEO, Forum Energii, Professor at European University in Florence: 26:51

So this is a very good question, interesting one, because Poland actually was it was like I dunno how you say it in English, but it was like Batman intervention in September, 2022 where the Bic pipe was opened. You may say it were really like exactly on time. So we were just running out. Gas was cut off. Few months. And then Poland was really under threat that will not balance the demand for gas. And then Baltic pipe, of course, it's constructions started many years ago was just really on time. So actually the finalization of the pro project should come in January next year. And, f four months later earlier or five, the project was open. So it rescued us, I think. And generally the feeling in Poland was that we were right with gas because, there was this controversy and not seem to, and German approach to gas where Poland, maybe with not perfect diplomatic forces in explaining what is this all about and also vested interest inside was always frustrated that nobody is listening to us. That Russia is really dependent on Russian fossil fuel is a danger. But so this is how it was Baltic pipe, LNG, which was of course built earlier made us really put us in completely different situation. But nevertheless, I think what has changed, because Polish plants in the past were that we will really almost gasify our economy. So there were plants that Poland will use by. 2000, 35, 35 billions of cubic meters of gas. And now the plants are really modified. And even if we speak now about some gas fired power plants, of course it should be hydrogen ready in future and see this need to convert to green gas. There are still sectors where actually gas usage will be cut or modified. We can see now the plans that Poland generally we are using now around, I think Hubert, correct me if I'm wrong 19 billion cubic meters. Or a bit like

Hubert Put, Senior Energy Consultant, Montel: 29:05

the over 17.

Joanna Pandera, Founder and CEO, Forum Energii, Professor at European University in Florence: 29:06

Oh, 17. Okay. So it was even declining because indeed I had some old statistics. So the share of gas is, ah, it's I'm a bit surprised but generally we speak about the plants that 23, 24 maximum cubic meters will be used. So generally, the approach towards imports of fossil fuels. Through the Russian invasion has changed. Poland now is big. Just next month's European presidency starts. I just have discussions with government recently on what will be the priority and keeping the goals of repower EU and and keeping away Russian fossil fuels. From the European market is a priority for Polish government. And of, but still now, the main supplier of energy to Poland is Saudi Arabia. So it replaced Russia. It's of course oil, mainly gas markets is much more diversified. But still this dependence on, other countries is a topic in the in debate.

Richard Sverrisson, Editor-in-Chief, Montel: 30:05

I think you're absolutely right. So Poland must feel in some ways vindicated about its concerns for many years about the dependency on the, certainly on Russian gas after what has happened since the invasion of Ukraine in 2022 and before. But just a final question, I'd like you both to keep it short. Nuclear is often touted and it has, there's talk of of a revival or renaissance of nuclear across different parts of Europe and Poland certainly is talking very seriously about it. Is nuclear the answer for Poland? And if so, why or why not? Hubert it's over to you.

Hubert Put, Senior Energy Consultant, Montel: 30:38

Thank you, Richard. So let's start with the plan. So the National Energy and Climate Plan, which was released not a long time ago, actually plans 1.2 gigawatts of nuclear capacity by 2035 and 6.2 in 2040. This should be done in two locations. One of them was already chosen. The Westinghouse is chosen as a, as the company who will build it. And actually I do believe that this one will be built because there are there were too many steps taken right now to just abandon this path. So I do believe that this is something that's gonna be built when it comes to the second the second nuclear power plant, which right now the plants are that it'll be built in a greater Poland region, which is which is on the west of the country. It should be built by the Korean by the Korean company. However, I don't think that this is, that this is so secure. First of all, given the fact that there are some poli, there were some political changes given that changes in the government in the last year. First of all, second of all the the recent releases from. For example, the the PGE CEO, which is one of the, one of the, one of the stakeholders in the second nuclear project, which which is in favor of changing the location on the second project. Maybe this is enough when it comes to the political landscape and the regulatory landscape. However, when it comes to the economy, I saw quite a few dissertations and thesis and and then research papers regarding the fact that the capacity factor of the nuclear power plants are declining and there will decline with the growth of renewables. So it'll be all a matter of viability, feasibility in the economy, whether we would actually be left with the stranded asset or not, and one point of another. I don't, I would say that from energy security perspective, it is a great choice. It's something that we should definitely invest in, and those, there was definitely a great way forward for Poland. However, when it comes to the economy, I'm a bit more skeptical regarding the dimension capacity factors and the billions and billions of Euros dollars, however you call it, invested into that.

Richard Sverrisson, Editor-in-Chief, Montel: 32:40

Sounds very costly. Joanna, what's your view?

Joanna Pandera, Founder and CEO, Forum Energii, Professor at European University in Florence: 32:43

So it's I have one sent like anecdote that really this, that Poland would need. Nuclear does not mean that the technology providers are able to deliver it within budget and on time. And this is the main challenge in my view. Basically the ability of the. Technology providers will decide whether nuclear, there will be nuclear, new opening in Poland and Europe, or not. It also depends on. Other countries choices. So it's not only, PO Poland decision. So you can see strong commitment to nuclear. It's a big topic, highly politicized agreement between Polish Prime US president. And but still, it requires a lot of work which needs to be done. And, if you actually take a look on which role nuclear can play and when in Polish power system, it's maybe 10% of electricity generation in 2040. And then it's the question so we now consider really if you gigawatts of nuclear, so we will see, in my view we cannot wait for nuclear. There was previous government said, we will phase out, call only if we'll have nuclear. So it's ridiculous. So you cannot merge the project. We still don't have the financing scheme. So we don't know how much it'll exactly cost and how much it'll impact electricity bills. And once we see this, hot discussion about electricity prices, energy prices in Europe. I would wait with final decisions until we will know really what does it mean for the consumers. And also technology options depends on other things which will happen in the Powers system.

Richard Sverrisson, Editor-in-Chief, Montel: 34:33

So if I interpret you correctly, there, it's veering towards a no. Joanna, that's certainly a, maybe not, but but

Joanna Pandera, Founder and CEO, Forum Energii, Professor at European University in Florence: 34:40

now it's only black and white color. And I'm experts for energy. So I try to it's really the dilemma which we have. And there are much more low hanging fruits, which we have around us. And this would be the first choice. This is what I want to say.

Richard Sverrisson, Editor-in-Chief, Montel: 34:58

Perfect.

Hubert Put, Senior Energy Consultant, Montel: 34:59

Definitely. That's true. And what I want to underline is that we need the specific, I would say the continuation of policies. Joanna already mentioned the fiche terminal, so the LNG terminal. And this was actually the com the start of the entire process was in 2010. So society, different world. Society, different government, a lot of changes in between 14 14 years up until now. This was a continuation of the policy because energy and the energy, the united energy sector is a matter of national security, but also it's a strategic sector for the entire world, for all of the countries. So that's why what's really needed, let alone technologies, is just the continuation of the specific goals that we are having and we are going to achieve into the future.

Richard Sverrisson, Editor-in-Chief, Montel: 35:44

Hubert and Joanna, thank you very much for a fascinating insight into the Polish energy market and the challenges the country face. I can just, sense the, the urgency that is required to fix some of the problems ahead. So once again, thank you very much for being a guest on the Weekly podcast.

Joanna Pandera, Founder and CEO, Forum Energii, Professor at European University in Florence: 36:00

Thank you for the invitation.

Hubert Put, Senior Energy Consultant, Montel: 36:02

Thank you so much, Richard.

Richard Sverrisson, Editor-in-Chief, Montel: 36:03

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