Obsolete power grids are putting the brakes on Poland’s renewable energy rollout. According to the Energy Regulatory Office (URE), more than a third of overhead lines are over 40 years old, while a third of power stations were built before the year 1982. This aging infrastructure may slow the nation’s rapid increase in renewable sources. Agata Skrzypczyk has the details.
Photovoltaic installation in Poland. (Photo by Juliawozniak, CC BY-SA 4.0)
At the end of August 2022, the installed photovoltaic capacity reached 11 GW (a more than 84% increase from the same period last year). By 2030 solar production is expected to jump by up 20 GW in new solar sources with a production potential of 21 TWh per year and over 14 GW in new onshore wind farms with a production potential of 37 TWh per year. It is expected by this time, over 2 million new customers will connect to the grid.
This will require an overhaul of outdated energy infrastructure. The data clearly shows that the network expansion and modernization don’t align with the growing demand for renewable energy in Poland. Anna Łukaszewska-Trzeciakowska, Deputy Minister in the Ministry of Climate and Environment, has recently admitted that the insufficient grid capacity has meant an increased number of refusals for renewable energy sources connection; As many as 60-80 percent of applications are currently being rejected, she said.
The main obstacle hindering the expansion and modernization of the energy grid is money. Poland has spent too long waiting to deal with the problem, and now it is too expensive to solve. According to Rafał Gawin, the President of the Energy Regulatory Office, the analysis of the distribution system carried out by the Office showed that the modernization needed over the next decade will cost at least 100 billion PLN (roughly 21.3 billion EUR). The complex and long administrative process of obtaining construction and environmental approvals will also hamper this process.
However, there is light at the end of the tunnel, not only in governmental plans for modernization, but also in the form of an initiative coming from the private sector. The Polish company Copernic Connect, part of the Krakow-based Copernic Group, operating in the renewable energy industry since 2019, came with a proposal to support administration and distribution system operators (DSO). The company wants to support the potential of photovoltaics and other renewables in the national energy mix, thanks to the financial participation of private investors in the modernization of the grid throughout the country. The model developed by Copernic Connect is based on uniting entities whose applications for connecting to the energy grid have been rejected. As a group, they would co-finance investments in energy infrastructure. The partners will include investment funds from Luxembourg, Lithuania, Estonia, France, Germany, and Spain among others, all nations with an interest in investing in the energy sector in Poland.
The project is coordinated by Dr inż. Franciszek Buchta, a highly experienced electrical power engineer. He is a recognised specialist, who in the past created and implemented a method for the development of the 110 kV transmission lines in Poland.
“We try to consolidate projects regionally to enable their development,” says Franciszek Buchta from Copernic Connect. “The process of modernization of the network by the operator is long and expensive. That’s why we decided to start negotiations with operators and carry out the modernization process on our own.”
This solution is to create a model of effective financing of projects with capital from private investors. Companies will fund grid modernization and subsequently ask for the grid connection and conditions that will include their contribution, possibly financing it in the long run. Eventually, the investors will be able to connect their renewable energy installations to the grid and increase the share of renewable energy in the energy market, without waiting for a long and tedious grid modernisation by the state. As part of this initiative, approximately 5 GW of potential power was already consolidated from PV farms, which grid connection applications have been refused. According to the company, the economy of scale achieved by market consolidation will reduce the overall cost of modernization per 1 MW making it much easier and less costly. At the same time, the projects with substantial potential that have been preliminarily developed will not go wasted.
DSOs are becoming more enthusiastic about his idea. Franciszek Buchta said they had seen first signs of willingness to negotiate for the grid connection. “I am a strong believer in decentralized, cooperative and democratic energy. For this, of course, we need a modern energy grid that will allow us to develop such future,” she said.
Meanwhile, the government has its own plans to modernize the grid, knowing that it is a necessary step to open up the energy market for new investment. The largest energy distributors and the Energy Regulatory Office signed the Pact for the Transformation of Polish Energy Distribution Grids. The document includes, for example, financing necessary investments in the energy grid with a special focus on adapting the energy infrastructure to the need of Poland’s green transition. These investments would be carried out in the period from 2023 to 2030. According to the Energy Regulatory Office, by 2030 the national power system will undergo huge changes to be to connect anticipated new solar and wind sources.
However, the grid development plan requires both the modernization of the outdated network as well as the construction of direct power lines. Since 2003, the Energy Regulatory Office has not issued a single positive decision regarding power lines. This means that no single direct distribution line for electricity produced from wind or solar could be built. This results in a stalemate. The rapid modernization of the grid could translate into a higher energy tariff and result in a sudden increase in prices and fees for customers. At the same time though, without the grid modernization, the Polish energy sector prices will rise over time.
Amid our current issues of rising energy prices and obsolete energy production sources, modernizing the electric grid is the first step towards Poland ensuring energy security and benefiting from a diversified energy mix. Perhaps a helping hand from the private sector might set the ball rolling.
This contribution was first submitted in December 2022 and has been revised.