Polish coal funding derails EU energy deal

Polish coal funding
© iStock/ewg3D

A proposed EU deal on electricity market reform has fallen through due to the European Council’s defence of Polish coal funding.

EU legislators negotiated for 12 hours last night before retiring without finalising a deal. The deal was due to form part of the European Commission’s “clean energy package” of legal reforms first proposed in 2016; but negotiators could not agree on the future of Polish coal funding.

Poland, which is currently hosting the United Nations’ 24th Conference of the Parties (COP24) in the southern city of Katowice, has called for a gradual “just transition” away from Polish coal funding from government programmes and the country’s use of coal as a primary fuel. COP24 delegates are expected to adopt a rulebook to ensure appropriate implementation of the terms of the Paris climate agreement, which commits signatories to keep global warming below 2°C.

Yesterday’s talks fell apart over “capacity mechanisms”, a Polish coal funding model which subsidises coal-fired power plants to remain on standby even when their output is not needed, in order to be prepared for times of peak demand for electricity: nearly 80 per cent of Poland’s electricity is powered by coal. The government has devised a long term strategy to reduce this, planning for 60 per cent of the country’s electricity and heating to be produced from coal by 2030 and dropping further to 30 per cent by 2040; however Energy Minister Krzysztof Tchórzewski has approved a new 1,000-megawatt coal-fired power plant to be built by 2024.

Other sticking points in the debate included funding models for Poland’s energy transition, which parties would regulate the reduction of Polish coal funding; and potential regulation of energy prices. Florent Marcellesi, a Spanish Green MEP who was present at the talks, said: “It is clear that Poland cannot on its own determine the whole of Europe’s energy policy.”

Negotiators will return to the table for a “trilogue” between the Parliament, the Commission and the Council of Europe on December 18.


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