Each Year Without Liberalisation of 10H Costs Poland PLN 7 Billion

by dbereza

Each Year Without Liberalisation of 10H Costs Poland PLN 7 Billion

by dbereza

by dbereza
Each year of delay in liberalisation of the 10H rule costs approximately PLN 6–7 billion accumulated over 2026–2030 in higher electricity prices. Additionally, each delay also translates into dependence on energy import and leads to higher CO2 emissions — these are the conclusions from an analysis of Aurora and Client Earth Prawnicy dla Ziemi, who checked how the delay in liberalisation of the 10H rule affects the cost of electricity in Poland.

The amendment to the Distance Act, if implemented in December, would limit additional costs for the Polish economy by PLN 7 billion compared to a situation where the decision is made after the autumn 2023 elections. Moreover, the authors of the analysis estimated that postponing the amendment by two years — until December 2024 — would increase electricity production costs by as much as PLN 13 billion in 2026–2030 compared to the amendment becoming effective in December 2022.

The loss of PLN 7 billion per year would result from production of expensive electricity from fossil fuels, which today form the core of the Polish energy mix. Onshore wind supplies electricity at a much lower cost than coal-fired power plants. Today it is four times less expensive.

PLN 7 billion is the equivalent of almost 90,000 subsidies to thermal modernisation of homes and purchase of heat pumps and PV for such homes under the governmental “Clean Air” programme — counting the highest subsidy available today, PLN 79 thousand with pre-financing.

“The analysis accurately demonstrates the losses incurred by Polish citizens as a result of the lack of decisive action by the government on matter of the highest priority for energy security of the country — unleashing onshore wind. The decision cannot wait any longer. Onshore wind is the solution for energy poverty, extraordinarily high electricity prices and Poland’s dependence on imported fuel,” emphasized Janusz Gajowiecki, President of the Polish Wind Energy Association.

The “The Impact of Changes to the 10H Rule on Electricity Prices in Poland” report by Aurora and Client Earth Prawnicy dla Ziemi report[1] demonstrates that acceleration of liberalisation of the Distance Act will decrease cumulated energy cost by PLN 5.7 to 13.2 billion in 2026–2030, depending on scenario. The highest savings are brought by immediate liberalisation of the 10H rule — in December 2022. The first new wind projects are commissioned in 2026, i.e. when electricity prices are still high due to the crisis.

The amendment is one of milestones for the disbursement of funds from the National Recovery Plan. Furthermore, in accordance with Kantar studies from June 2022, unblocking onshore wind is supported by as much as 79% of Polish citizens, inducing 74% of Law and Justice followers and 64% of Solidarna Polska followers.

“Today onshore wind development is blocked by the 10H rule rather than project profitability. Our analyses demonstrate that wind projects are profitable even without additional support schemes. When the 10H rule is liberalised, we expect installed capacity in onshore wind to triple,” said Filip Piasecki, Polish Market Expert in Aurora Energy Research, co-author of the analysis.

Wind energy projects are profitable for investors. More importantly, each additional GW of wind capacity translates into lower electricity costs for the entire economy. In accordance with the analysis, each year of delay in amending the Distance Act decreases installed capacity of wind energy in Poland at the end of 2030 by 1.5 GW.

“Unblocking wind energy is one of the most urgent issues to be dealt with in the Polish politics. Non-adoption of the amendment to the Distance Act in December means not only higher electricity prices in subsequent years, but also the lack of the first advance payment from the National Recovery Plan and the risk of definitive loss of all NRP funds. This is crucial, as more than a million families in Poland are experiencing energy poverty and require urgent action decreasing energy prices. The ruling coalition must break the political impasse around wind energy as soon as possible and amend the law already this year,” said Wojciech Kukuła, Senior Lawyer at ClientEarth Prawnicy dla Ziemi.

The construction of new wind farms takes approximately three years; therefore, billions of savings discussed by the analysis are cumulated over 2026–2030. If the decision to liberalise the “10H rule” is made already in December, the first new wind farms will start to supply electricity approximately in 2026.

[1] https://www.clientearth.pl/media/km5gt50c/2022-12-14-wp%C5%82yw-zmiany-zasady-10h-na-ceny-energii-w-polsce.pdf