The green revolution can be safe

The inevitable energy transformation is especially challenging for Poland. 'It is enough to realize that we must at least reduce CO2 emissions by about 180 million tons, to the level of 200 million tons, by 2030. This is more than the Polish energy sector produces, so the reduction target also applies to transport, construction, heating and other industries,' said Gustaw Szarek, a local partner at McKinsey & Company, during the ‘Green energy - how to make the energy revolution safe for the Polish economy’ panel.

List of challenges

Among the basic goals and at the same time challenges in the energy sector, Szarek included an increase in the share of renewable energy sources from approx. 10% up to approx. 40 %. This, in turn, requires an acceleration two times greater than the ambitious government programme for the development of onshore and offshore wind energy. The almost complete elimination of coal-based energy or the expansion and modernization of transmission and distribution networks will be associated with huge problems.

The green revolution requires large expenditures, estimated at up to EUR 240 billion by 2030, and if poorly carried out, it may turn out to be very costly for all stakeholders, consumers, companies, and the entire economy. The question is whether Poland is ready to carry out this process safely.

Financial structure

'The energy transformation must ensure energy security for Poland and be fair,' emphasized Artur Soboń, the deputy minister for State Assets. For this to happen, it must be well planned, agreed with social partners, ensuring appropriate conditions for employees to leave, including in the coal sector, and changes in regions where energy is traditionally firmly established, and finally it must be properly implemented.

Mr Soboń emphasized that intensive work on detailed solutions was currently underway as part of the energy strategy already adopted by the government and the announced achievement of climate neutrality within 30 years. He added that establishing a proper financial structure, which is largely already in place, is also necessary. This applies not only to public spending from the national budget or the 'regular' EU budget, but also to  additional funds from EU sources, such as the Just Transition Fund or the Recovery Fund.

Significant financial contribution is also expected from the energy sector companies themselves, which have to adapt their generation apparatus to energy obtained from renewable sources. In this context, the position of fuel companies is interesting, as on the one hand they can be painfully affected by the green revolution, and on the other hand, it can create opportunities for them for long-term business benefits.

 'A year ago, PKN Orlen announced a strategy of achieving climate neutrality by 2050 in Karpacz. Renewable energy sources are one of the most important points of this strategy,’ emphasized Karol Wolff, PKN Orlen's strategy director. Currently, Orlen focuses on gas energy, but it is also looking for other opportunities. 'The path of the fuel and energy industry is winding and narrow, but we are considering introducing new business models, such as the use of hydrogen or a more extensive use of nuclear energy. These projects may provide the same growth path in the future on which we have been for the last 20 years,' said Mr Wolff.

Competency Concern

As noted by Gustaw Szarek, the fate of crude oil refineries is doomed. And although the Orlen refinery in Płock will be closed as one of the last in Europe, closed it must be, owing to the phasing out of the demand for traditional fuels. At the same time, PKN Orlen is building, together with PGNiG and Lotos, a multi-energy concern, which is to become - as Mr Wolff said - an important player on the European market.

'We are about to make very large investments. The merger of the Orlen Group, Lotos and PGNiG will create a concern that will be able to carry out an energy revolution thanks to its competences, financial resources and commitment in the field of energy,' he emphasized.

Krzysztof Nowicki, the Vice President of the Management Board for Mergers and Acquisitions at the LOTOS Group, emphasized that one of the competences of this Pomeranian concern is the development of hydrogen energy. 'Lotos showed an interest in it when no-one was talking about the energy revolution in Poland at all. We are currently one of the largest producers of the so-called grey hydrogen, we are also strongly involved in the so-called green hydrogen,' said Nowicki.

A range of projects

Mr Nowicki also emphasized that the group has a good chance of starting relationships with investors who will contribute to the implementation of offshore challenges in the Baltic Sea. Ireneusz Zyska, the Deputy Minister for Climate and Environment, admitted that the development of offshore wind farms is one of the pillars of the Polish energy strategy. To this, of course, one must add a number of measures to strengthen renewable energy resources (including onshore wind farms, photovoltaics or nuclear energy), but also in the field of clean air, promotion of low-emission or zero-emission transport, etc.