w polskiej elektroenergetyce 2009-2019
in the Polish Electric Energy System 2009-2019
It was established at the last EU summit in Brussels that in the years 2013 – 2019 Polish
power plants will be able to obtain a significant part of CO2 emissions allowances for
free. However, in order for this to be the case, they must fulfill a specific condition: free
allowances will only be allocated to those power plants that were in operation before the
end of 2008 and plants in respect of which the investment process was physically
initiated before 31 December 2008. This is an enormous chance for key sectors of the
Polish economy – energy and construction, as well as for investors, and as such should
be used wisely. Actual/physical initiation of activities is extremely important. This issue
was already discussed during a seminar entitled „The Energy and Climate Package –
Details of the Compromise”, which was organised by the Ministry of the Economy and the
Green Effort Group on 16 December 2008 in the Ministry of the Economy. During this
meeting, possibilities arising out of the provisions of Polish Construction Law, which
define the concept of physical initiation of the investment process, were discussed.
The New Investments in the Polish energy sector in the years 2009 – 2019 conference,
which was organised by Procesy Inwestycyjne Sp. z o.o., the ETA Association, and the E.
Kwiatkowski Institute and took place on 25 March 2009, provided an opportunity for
continuation of the discussion that was started during the seminar in December. This
discussion was aimed at confirming and presenting completed stages of investments
carried out by entities that intend to make use of the unique chance given by the EU’s
condition – physical initiation of the investment process before 31 December 2008.
The following individuals took part in the conference as speakers:
• prof. Krzysztof Żmijewski, Chairman of the Independent Energy Consultancy
• Andrzej Urban, Deputy Chief Inspector of Building Control, General Office of
• Derek Taylor – DG TREN, European Commission;
• Marzena Chodor – DG Environment, European Commission;
• Maria Chojnacka – DG REGIO, European Commission;
• Wojciech Chmielewski, Deputy Director of the Ownership Control and
Privatisation Department, Ministry of the State Treasury.
The conference was opened and chaired by Ms. Marina Coey, President of the
Management Board of Procesy Inwestycyjne Sp. z o.o., who greeted the participants of
the conference. She then informed the participants of the conference that the debate is
to be filmed – full video coverage is available online at www.proinwestycje.pl.
The first speaker to take the floor was Prof. Krzysztof Żmijewski, Chairman of the
Independent Energy Consultancy Board, who stated that it order to ensure energy supply
until 2020, we must invest approx. 33 billion Euro in sources. The negotiated derogation
will allow the Polish economy to breathe slightly easier – we will receive a stable amount
of 70% of emissions in 2007, which will lower energy production costs by about 27 to 33
billion Euro, i.e. almost the amount that will need to be spent. It is also worth taking into
account that in spite of this, prices will remain high. That is why particular attention must
be paid to end-users in order to achieve a significant level of social acceptance, so that a
crisis does not occur. The situation is dramatic, even without taking into account
expenditures relating to investments in the next decade 1 . The amounts that will be saved
thanks to the derogation will need to be used for investments. We are well prepared for
this, and many firms have physically initiated investment processes, as this conference
intends to confirm.
The provisions of the new EU-ETS directive do not contain a specific definition of
physically initiated investment process; therefore, we should assume that in this case
this term should be encompassed by the basic Community principle of solidarity 2 , i.e. can
be defined by means of Polish Construction Law and connected legal acts.
UPDATE AND OPERATIONAL SESSION
The representatives of firms that physically initiated investment processes before 31
December 2008 made the next presentations. The state of the investment processes
encompassed by the derogation was discussed by:
• Marian Strumiłło, Vice-president of the Management Board, Dalkia Polska
• Andrzej Modzelewski, Director, RWE Polska SA,
• Krzysztof Zborowski, President of the Management Board, Elektrownia
• Marek Różycki, President of the Management Board, „Kozienice II” Sp. z
• Antoni Korus, Project Manager, Elektrownia „Rybnik” SA,
• Remigiusz Nowakowski, Director for Development of Electrical Energy
Projects, Fortum Power and Heat Sp. z o.o.,
1 2020 – 2030.
2 If there is no EU legislation as to a given issue, national law applies.
• Krzysztof Kąkol, Director of the Developmental Investments Department,
PGE Górnictwo i Energetyka SA,
• Andrzej Zielaskowski, Sales Director of the Energy Centre, PCC Rokita SA,
• Julian Krawczyński, Technical Director, PCC Utilities SA.
The aforementioned investors, namely Dalkia Polska SA, RWE Polska SA, Elektrownia
„Kozienice” SA i „Kozienice II” Sp. z o.o., Elektrownia „Rybnik” SA, Fortum Power and
Heat Sp. z o.o., PGE Górnictwo i Energetyka SA, PGE Górnictwo i Energetyka SA, PCC
Rokita SA and PCC Utilities S.A., confirmed that they physically initiated investments
relating to new capacities in various parts of Poland before the end of December 2008.
These investments relate to:
• Plants for thermal utilisation of waste products;
• Coal-powered capacities in new and existing power plants;
• Heat and power plants (including those aimed at co-combustion of biomass);
• Capacities intended for specific industrial entities;
or, for example, to modernisation of old installations such as boilers.
The following types of actions were carried out in relation to the aforementioned
• Elaboration of feasibility studies with economic analysis;
• Elaboration of environmental impact studies;
• Preparation of applications for obtaining construction conditions;
• Preparation of specific technical aspects;
• Initiation of works of a formal and legal nature, as well as of the process of
preparing necessary documentation;
• Initiation of the process of selecting executives (in many cases public
procurement proceedings have already been started);
• Preparation of photographic documentation relating to executed activities;
• Submission of applications for connection of a new unit to the National Electrical
• Execution of preparatory works for physical processes, including:
o Execution of geotechnical tests (e.g. drilling in order to establish ground
o Geodesic works (e.g. setting up and showing of geodesic signs),
o Execution of deconstruction works,
As well as:
o Appraisal of the potential for supplying water to a given installation,
o Power connections,
Fencing-off of areas intended for future construction,
Leveling of the ground,
Execution of parts of foundations and the structure of new installations,
Preparation of maps for the needs of a specific project.
Concluding this part of the conference, Prof. Krzysztof Żmijewski summarised the
investments at 11 488,6 MWe. Addition of 5805 MWe 3 shows that the current level of
investments is approximately 17 293,6 MWe.
Other sources show that the level of physically initiated investment processes from the
following categories is:
• Definite – 14 027 MWe,
• Doubtful (to be confirmed) - 4 557 MWe,
• Uninitiated physically – 470 MWe,
This gives a total of 19 054 MWe.
GUIDELINES – GENERAL OFFICE OF BUILDING CONTROL
The next speaker was Minister Andrzej Urban, Deputy Chief Inspector of Building
Control, who stated that Polish Construction Law defines the initiation of a construction
as the moment in which preparatory works are carried out on the construction site
(article 41 of Construction Law). These include geodesic marking of constructions on the
land, leveling off of the construction site, development of construction site (including
erection of temporary structures), ensuring connection to infrastructure networks.
However, the law does not literally define physical initiation of investment processes. This
term definitely encompasses geological and engineering works. The concept of physical
works should also encompass creation of plans, and also purchase of materials. On the
basis of the presentations made by investors, Minister Urban stated that physical
initiation of the investment process should also include deconstruction works, erection of
fencing, geotechnical testing, leveling. There are more doubts in respect of geodesic
works and establishment of conditions for construction, which set out conditions but do
not indicate exactly what is to be constructed on a given bit of land and whether a given
investment will be carried out. He also stated that the vast majority of presented actions
can be deemed physical initiation of the investment process in light of Polish law.
3 This sum of MWe was planned for execution in December 2008; however, the companies that announced their
construction (Vattenfall, TAURON Polska Energia, PKN Orlen, KWB Konin, Energetyka Dwory) chose not to
speak on this issue during the conference.
Minister Urban’s speech gave rise to discussion amongst the participants of the
Prof. Krzysztof Żmijewski debated with Minister Urban in respect of the issue of
displaying geodesic signs, which he saw as a definitely physical action.
Bogdan Żmijewski, a president of the Developer’s company Lewant, noted that
preparation of an investment concept and its description can also be deemed physical
initiation of the investment process.
Jerzy Majcher, Atkins Global, highlighted that conduction of a feasibility study
encompassing sources of financing and securities for a given investment is also physical
initiation of the construction process.
Jacek Piekacz, Vattenfall, noted that it is the European Commission that will have the
most say in respect of this issue, and that it will probably create special committees to
define this term.
HAVE WE GOTTEN OFF TO A GOOD START– MINISTRY OF THE
Wojciech Chmielewski, Deputy Director of the Ownership Control and
Privatisation Department 3 of the Ministry of the State Treasury spoke of the
Ministry’s view on problems connection with investments that have already been started.
He highlighted that during the period in which the derogation will be in force, it is
probable that some companies controlled by the State Treasury and presented during the
conference will be privatised. The Ministry of State Treasury will be able to influence
these companies and the development of their investments by means of the necessity of
acceptance of investments as part of the ownership decision mechanism. It is probable
that the moment in which decisions as to purchase of highly valuable assets are made
will be considered the moment in which a given investment if started, although final
interpretation of issues connected with investments will depend on the view of the
European Commission. Poland’s task is to do everything possible to make this decision
positive for us. It is also important for conducted actions not to interfere with competition
on the energy market.
Initiation of actions aimed at construction of new capacities in seen in a very positive
light by the MST, especially as it places companies in a situation that is more predictable
for potential investors in the privatisation process.
3x20 AFTER SUMMIT – PRESENTATIONS BY REPRESENTATIVES OF
THE EUROPEAN COMMISSION
Opening the part of the conference devoted to presentations by representatives of the
European Commission, Prof. Krzysztof Żmijewski highlighted that our wish is for the word
‘physical’ to mean the same thing in the Commission’s interpretation as it does in the
Derek Taylor, Energy Advisor of DG TREN, spoke on the issue of CO2 and dangers
connected with emission of greenhouse gases. He highlighted that combustion of coal in
Europe does not have a future if we do not limit emissions – a means of achieving this is
initiation of new investments. The European Union agrees that it would be most desirable
if, from 2020, all new power plants would be equipped with installations for carbon
capture and storage. By 2050, we should aim to achieve a 50% reduction in total
greenhouse gas emissions. CCS is not an option anymore – it is a necessity and we
should be aware of this fact. Research is currently underway. A problem area is the fact
that implementation of CCS technology lowers the efficiency of power plants, as a result
of which we must currently do as much as possible in order to increase efficiency. The
Energy and Climate Package foresees conduction of far-reaching actions aimed at
removing legislative barriers to CCS. The EU finances the development of technologies
for carbon capture and storage – supports research and issues regulations. It also,
within the framework of the Economic Recovery Package has agreed to support the
demonstration of CCS at a number of plants, including Belchatòw in Poland. It is
necessary for demonstration projects to be efficiently carried out, and it is important that
the majority of these will be successful. At the EU summit in November 2008 a decision
was passed as to continuation of actions aimed at reduction of CO2 emissions. The
member states expressed their will to use 50% of their revenue from the ETS auctioning
system to lower CO2 emissions, including to support safe CCS, and this should be
developed. If we are to use gas and coal in the future, implementation of CCS is an
To summarize, Dr. Taylor congratulated Poland on its successful negotiations and role in
acceptance of a compromise in respect of the provisions of the EU-ETS Directive but
pointed out that this in no way lessened the need to make the necessary reductions in
carbon emissions. Tremendous efforts would still be required.
Marzena Chodor of DG Environment made a presentation entitled „The EU ETS after
2012: specific derogations for the energy sector adopted in the December 2008.” She
discussed the phases of implementation of the new EU ETS Directive, the final text of
which should be confirmed in April 2009. The two coming years will be a very hot period
in terms of legislative works. Changes in the emissions trading directive that was adopted
in December 2009 encompass: introduction of a common limit on greenhouse gas
emissions at EU level and solutions aiding achievement of an international agreement,
broadening of the scope of legislation (new sectors and greenhouse gases),
harmonization of the principle of allocation of allowances, strengthening of monitoring
principles, reporting and verification of emissions. The Regulation regarding auctions is
currently being prepared and should be adopted by 30 June 2010 as part of the
comitology process. Pursuant to the principles set out by the EU, 10 member states can
apply for free allowances 4 for producers of electric energy, under the condition that they
fulfill the requirements stated in the directive. It is worth remembering that when
applying for free allowances, we are lowering the income of the state treasury. The price
of allowances is not only aimed at limiting CO2 emissions, but also at stimulating the
development of CCS and RES. In her conclusions, Ms. Chodor highlighted that after 2012
Polish energy production installations encompassed by the system in the second
settlement period and installations in respect of which the investment process was
started before the end of 2008 will be able to apply for free allowances on the basis of
the derogation. A condition for allocation of free allowances is presented by a
given member state and acceptance by the European Commission of an
investment plan aimed and modernisation and improvement of infrastructure
and environmentally friendly technologies, as well as presentation to the
Commission of a list of installations that allow for allocation of free allowances,
together with a description of the means in which they will be allocated (based
on indices). Free allowances, the number of which will gradually decrease until it
reaches 0% in 2020, will decrease the pool of allowances predestined for allocation at
In response to Prof. Żmijewski’s question as to the definition of physically initiated
investment processed and use of the subsidiarity principle, Ms. Chodor stated that
specific interpretation of the conditions of qualification of a given installation to this group
will be adopted by means of comitology.
In response to a question presented by an independent expert, Mr. Ewaryst Hille,
regarding the forecast in respect of prices, Ms. Chodor stated that the Commission acts
as a regulator and does not create prognoses as to the price of allowances, but can – on
the basis of article 29a of the new directive – initiate activities aimed at preventing
excessive price fluctuations, monitoring allowances in the EU and accelerate or decrease
the level of auctions. Mr. Wojciech Stawiany, NFOŚiGW, then asked about differentiation
of RES and innovative RES. This question was answered by Ms. Maria Chojnacka of DG
4 For installations that are already in operation or in respect of which the investment process was physically
started before 31 December 2008.
REGIO. Innovative RES are those sources that use technologies that have not been
available on a global scale for the last 3 years.
Maria Chojnacka of DG REGIO spoke of financing of investments. This is a new topic
for EU funds, which is why she highlighted that the programmes that can provide
additional financing in the field of energy are „Infrastructure and the Environment” and
„Innovative Economy”. The first of these can help obtain means for development of RES
and energy efficiency, as well as support cogeneration. Innovative Economy relates to
traditional energy sources and is aimed at supporting transfer and transmission of
energy, mainly in those places where market powers do not function in the correct
manner. Ms. Chojnacka appealed for submission of applications relating to RES and
energy efficiency, as there is a lack of large projects in these areas. There are lists of
strategic and competition projects. 5 . The EU also offers free-of-charge assistance in
preparation of projects as part of the Jaspers initiative 6 . Applications for development of
technologies connected with reduction of CO2 emissions can be submitted as part of the
Innovative Economy programme. 7 Ms. Chojnacka also noted that Poland has made a step
forward by predestining a large allocation for the energy sector. At present, works are
ongoing in respect of the budget for the years 2014 – 2020, in which the topic of energy
will certainly have a large part. It is therefore highly advisable to already start thinking of
how to efficiently use these possibilities.
Remigiusz Nowakowski, Fortum Power and Heat Polska Sp. z o.o., enquired as to
the possibility of obtaining financing for construction of a heat and power plants as part
of the Jaspers programme and expressed a critical standpoint in respect of the fact that
the Infrastructure and Environment Operational Programme does not encompass
construction of high-efficiency cogeneration sources in which co-combustion of coal and
biomass takes place, which naturally has a positive impact on reduction of CO2
Ms. Chojnacka confirmed that the Jaspers initiative encompasses assessment of draft
projects submitted in respect of national operational programmes. In relation to the topic
of co-combustion she noted that the programme and its priorities are the result of
negotiations with the Polish government. If an entity, e.g. a company, expresses
5 Competition projects encompass applications relating to RES and energy efficiency.
6 Assistance in turning attention to the European Commission’s specific requirements.
7 For example, in respect of the CCS issue, a study as to the possibility of financing this type of investment from
EU funds is currently being elaborated as part of the Jaspers initiative.
such a need, the Polish government can submit a request to the Commission as
to modification of the provisions and aims of particular priorities.
SUMMARY OF ACTIONS
To close the conference, Prof. Krzysztof Żmijewski, Chairman of the Independent
Energy Consultancy Board, made a presentation during which he noted that all of our
activities are aimed at one goal „it will either be dark, or there will be light.” He
presented an analysis of what we must do in order to achieve the assumptions of the 3 x
20 programme and stated that in order to achieve the goals of the Energy and Climate
Package in Poland we must:
• Develop power capacity by 2020, including:
o 8 GW of new powers;
o 4 GW of modernised powers;
o 9 GW of renewable powers;
• Invest at least the following amounts by 2030:
o 10,8 billion € on coal;
o 4 billion € on lignite coal;
o 18,5 billion € on RES.
In order for us to success, we must invest in new powers and carry out initiated
investments. It will be great if we manage to execute even half of the physically initiated
investment processes discussed. All we need to do is take a rational approach to planning
financing for investments, so as not to fall into credit traps.
Presentations and video coverage of this conference are available online at