As EU regulators confirm the legal validity of last month’s Russia-Poland natural gas agreement , which calls for Poland to increase Russian gas imports from 7.5 billion to more than 9 billion cubic meters (bcm) per year, Poland must continue diversifying its energy portfolio as well as lead the charge towards a more unified European energy policy.
Unlike many of its Central European neighbors (including Slovakia, Bulgaria, and the Baltic States), Poland still avoids being entirely dependent on Russian gas imports. This puts it in a unique position to both influence the EU’s long-term energy strategy as well as develop a more immediate response to greater regional energy cooperation. From an EU-wide perspective, greater legislative power by the European Parliament post-Lisbon as well as Poland’s (and Hungary’s) impending EU presidency makes for an opportune moment to push for an EU energy security agenda.
From a regional perspective, this also entails speeding up the directives agreed to during this year’s Visegrad energy summit, which included supporting a southern energy corridor, developing north-south interconnections via an energy supply triangle and streamlining regulatory frameworks and market competitiveness (including for electricity intermediaries).
In addition to advocating for upgraded EU-wide energy infrastructure and greater market unity, Poland should continue to diversify its own energy portfolio, namely by investing in alternative and renewable energy resources. However, if Poland is to satisfy the EU’s calls for increased renewable energy (20 percent bloc-wide by 2020), it needs both financial and institutional support from the EU and individual members states like Germany (instead of obstruction) to develop its proposed LNG terminal, invest in nuclear and wind power, and asses the merits of shale gas.
The success of Warsaw’s international shale gas conference, including high investor interest from American and Canadian firms, strengthened Poland’s standing as an emerging energy producer and potential supplier. This spring, findings from initial exploration as well as the ability to set an appropriate regulatory regime will set the tone for further shale gas extraction and development. As far as nuclear energy is concerned, Poland is in a strong position to build human capital in this area. Given Poland’s strong technical and engineering schools, along with commitments from international partners (such as GE Hitachi), the country is well-positioned to meet its target of completing at least two nuclear power plants by 2020. Moreover, Poland’s cooperation goes beyond just the EU, Poland’s Central Mining Institute is partnering with the US National Energy Technology Laboratory to research and develop carbon capture and storage (CCS) technology.
In addition to exploring non-coal based energy sources, a significant portion of Poland’s energy strategy lies in the reduction of overall demand. For instance, Poland is looking to introduce tradable “white certificates” which aim to achieve energy savings targets, increase efficiency in power and heat production and reduce losses in energy transport and distribution. This scheme would be implemented among retail energy suppliers, distributors, and end-users, with the Polish Ministry of the Economy being responsible for monitoring compliance and verifying targeted savings.
Poland’s energy outlook is complex and presents several challenges, however, there is no doubt that major reforms and transformation are imminent. They say variety is the spice of life. As it concerns Poland’s future energy makeup, it may very well be the key to its economic and geopolitical relevance.
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