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Ahead of the final trilogue on the electricity Market Design that will take place on 18th December (Tuesday), 13 Polish social organizations which work for environmental and climate protection appeal to Ministers and MEPs to ensure that the power mechanism is not used to support the construction of new coal-fired capacities such as the planned Ostrołęka C power plant in Poland.

Full content of the letter sent to the decision-makers:

Ahead of the final and decisive trilogue meeting on the Electricity Market Regulation we, the undersigned 13 civil society organisations working for climate protection and just energy transition in Poland, appeal to you to ensure that the capacity mechanisms no longer subsidise coal plants.

Countries of the world gather now at the COP24 climate summit to safeguard global decarbonisation goals in line with the Paris Agreement. In order to fulfil its commitments, the EU needs to accelerate the clean energy transition and rapidly phase out coal first, and other fossil fuels subsequently. This will not be achieved if the subsidies in form of the capacity mechanisms continue to fund coal.

Results of the first Polish capacity market auction confirmed that this scheme will hand out billions of euros to coal plants. Out of 22,4 GW awarded through the auction at least 80% is coal and lignite. Contracts will be set at the staggering amount of approximately € 55 per kW, the price being more than five times higher than the one set by recent UK auctions. Within this first auction, more than 3,6 GW of coal plants under construction have secured extensive 15 year-long contracts that will provide them with public subsidies until the end of 2035. By the end of the contracts these 3,6 GW of plants will receive an estimated € 3 billion. This means that Polish taxpayers will foot the bill for about a half of total construction costs of these new plants.

It must be noted that Polish state-controlled companies Energa and Enea intend to use the capacity mechanisms to subsidise a new 1 GW coal plant Ostroleka C. It has no economic justification and poses a threat to people, the climate, the environment and the energy system. It is estimated that over its 40-year lifespan this power plant will emit approx. 6 mln tons of CO2 annually1. In their official statements, the utilities involved in this project indicated that it can be pursued only with the capacity payments2 as otherwise, according to analysts, Ostroleka C will be permanently and deeply unviable3 and can cause up to € 1,7 bln loses4. The plant will also pose a serious threat to public health. Air pollution caused by its operation can cause severe health impacts including up to 2,000 premature deaths and health costs estimated at reaching up to € 690 million5. It must be noted that the integrated permit for Ostroleka C was issued in 2011. Since then the project was cancelled and recommenced again in 2015. In 2018 the permit has been challenged in the court as it is not in line with the current EU emission standards6.
In the light of the above we call on you to ensure that:

  1. The carbon intensity criterion of 550g CO2/kWh must apply immediately to all plants.

    Polish capacity market is designed to maintain the status quo in the country’s coal-based energy system. It is estimated that only until 2030 it may cost Polish taxpayers even up to € 14 bln, vast majority of this amount would be spent on the life-time extension of existing coal-fired plants and possibly on building new coal plants such as Ostrołęka C. To fulfil the Paris Agreement, the EU - including Poland - needs to phase out coal and accelerate the clean energy transition. Therefore as a first step it is crucial to end subsidies to both new and existing coal plants.
  2. Definition of the new generation capacity is clearly set as such that has started commercial production after the new Electricity Market Regulation comes into force.

    EU Commission proposal as well as the Council general approach differentiating 550g CO2/kWh application timeline between generation capacities based on the time of their ‘final investment decision’, creates legal uncertainty that could lead to even more new coal investments being still subsidised with capacity mechanisms, as it is demonstrated by the Ostroleka C case. The European Parliament’s proposal to use the moment of the start of the commercial production provides a clear cut off point and assures legal certainty.

  3. The Electricity Market Regulation provisions on capacity mechanisms must apply immediately to all existing capacity mechanisms and concluded contracts.

    The Council’s General Approach introduces an exception, exempting those capacity mechanisms that are already approved from the new rules. This would exempt the Polish capacity market from the new rules sentencing Polish citizens to continue to subsidise archaic coal energy system for more than a decade to come. This would also distort the level playing field between Poland and neighbouring Member States and hamper the clean energy transition.

We hope that, EU will prove that it is serious about the commitments made under the Paris Agreement by ending subsidising coal with the capacity mechanisms and that you will show your support to the above postulates ahead of the final trilogue meeting.

On behalf of the signatories of the letter

Radosław Ślusarczyk
President of the Association Workshop for All Beings

Fundacja Frank Bold (Foundation Frank Bold)
Fundacja GAP Polska (Global Action Plan Poland)
Fundacja Greenpeace Polska (Foundation Greenpeace Poland)
FundacjaNaprawSobieMiasto (Foundation Fix Your City)
Fundacja „RozwójTak – OdkrywkiNie” (Foundation Development Yes – Open-pit Mines No)
Fundacja WWF Polska (WWF Poland)
FundacjaZielonyInstytut (Foundation Green Institute)
Stowarzyszenie Ekologiczne Eko-Unia (Ecological Association EKO-UNIA)
Stowarzyszenie Ekologiczno-Kulturalne „Wspólna Ziemia” (Ecological and Cultural Association ‘Common Earth’)
Stowarzyszenie Pracownia na rzecz Wszystkich Istot (Association Workshop for All Beings)
TowarzystwodlaNaturyiCzłowieka (Society for Nature and Man)
TowarzystwonarzeczZiemi (Society for Earth)
ZwiązekStowarzyszeńPolskaZielonaSieć (Alliance of Associations Polish Green Network)

1 Banktrack: Ostroleka C coal power plant
2 The last coal power plant in Poland may be only wishful thinking
3 Ostrołęka C - next steps for the Europe's last coal power plant
4 Ostrołęka C: Burning More Money Than Coal
5 Adamkiewicz Ł., Health impacts of the Ostrołęka C power plant, 2017, based on the valid IPPC, in Polish
6 The application for annulment of the Ostrołęka C integrated permit- costly consequences of Jan Szyszko’s decision



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