On Thursday, July 28th, me and Jakub Wiech, also an editor at Energetyka24.com, interviewed the Minister of Climate of Poland, Anna Moskwa. It lasted for an hour and covered many current issues regarding Polish and EU energy.
We asked Moskwa, who is a minister since October 2021, about the coal crisis. She denied that there was any and assured me that overseas deliveries would soon arrive. She also said that none of the state-controlled mining companies sold any coal that is used in the energy sector and that export exists, but mainly regarding coking coal, which Poland is the biggest producer in the EU.
Anna Moskwa didn’t say much about the resignation of Piotr Naimski, former government’s Plenipotentiary for Strategic Energy Infrastructure, who was responsible for the construction of Baltic Pipe, the pipeline that connects Poland with Norway and is a key to the country’s independence from Russian gas. Although Moskwa suggested that he still has a role to play in energy and her ministry will make him an offer, but she didn’t say what kind.
Moreover, she shared the current state of preparation for the Polish nuclear power plant, the EU’s gas-reducing proposal, ETS reform, and renewable financing through government programs.
Translation of a whole interview that was published at Energetyka24.com:
Jakub Wiech: Do you recognize that humans are responsible for the current climate change?
Anna Moskwa: This is a very good question. Human activity has an impact on the environment and climate. It can be positive, neutral, and negative.
That is, climate scientists are right.
Yes, while different circles discuss among themselves human-independent climate change, constant cycles of climate change, and the level of human influence on the climate. There is no single opinion, but the human impact is nevertheless undeniable.
I would like to contrast these opinions with the views of one member of the State Council for Nature Conservation, namely Mr. Gregory Chocian. He wrote, for example, that “we overestimate the importance of man to the climate”.
I think we agree that this impact is there and that we can do a lot to reduce it. I think this discussion is more about assessing the level of that impact. We agree that the environment needs to be taken care of, and by doing so we hope to have a positive impact on the climate.
And what is that level?
Mr. Editor would probably like me to refer to a percentage
This is so difficult to assess accurately that any analysis is only an estimate and impossible to verify. I focus more on how we can realistically reduce our negative impact on the climate or environment. At the ministry, we mainly focus on the latter aspect. We look at what we can do to better conserve the resources we have.
And what can we do, as Poland? What is most important to you in this regard?
First of all, reduce air pollution. I see this challenge as the most important, it’s our priority.
Daniel Czyzewski: This brings us to the coal topic, I think. Minister, who is at fault for the coal supply issue?
This question has a thesis in it – that someone is at fault and that coal will not be there. It’s not true, it’s circulating messages in the media, from which nothing follows. It only heats up the mood and spreads panic.
But your letters to the prime minister on this issue were leaked to the media.
The media narrative included claims that “there were letters.” But no one asked whether they were true. The ministries did not confirm it. I would prefer that we not talk about rumors, we are not interested in this narrative. We feel responsible for making sure the coal is there, we were watching over it even before the sanctions were introduced. I don’t want to enter into a discussion about rumors, because that will not bring coal to Poland.
Then let’s talk about numbers. How much of this coal are we importing? You said in June about 8 million tons, in July there was information about an emergency order of 4.5 million tons.
Since the beginning of the year, things are as follows: 2.7 million tons of coal entered Poland from Russia, and no more coal from that country enters Poland. This raw material is both in stockpiles and in households, most of it has probably been purchased. According to data from July 19, from January 1 to the end of June, about 3 million tons – largely from Australia and Colombia – were imported into Poland from directions other than Russia. At the moment, we know about 7 million t contracted for the second half of the year, and more contracts are being negotiated. Partly this is thermal coal, partly it is coal for heating plants. It is mainly imported by state entities. Approx. 20-40% of the coal from each load is sifted so that it can go to households. This sifted raw material goes to large hubs, from where the coal can be picked up by depots. In addition, we have PGG coal available. We are also opening ports outside of Poland, such as in the Baltic States.
Jakub Wiech: This is due to problems at the ports themselves or downstream logistics?
It’s about both, but both challenges are under control. The problem is, for example, the size of the ships and the availability of port handling facilities, so that it is not done manually. So far, the sea route has been used for coal imports on a much smaller scale. And we are also concerned with speed. The Ministry of Infrastructure and the Ministry of State Assets now have a difficult task ahead of them, which they are managing well
And when were the first contracts concluded to fill the gap left by Russian coal?
Certainly, before the embargo, supplies had already been ordered.
Daniel Czyzewski: Poland is exporting coal, even more than in previous years. Couldn’t it be stopped?
A lot of myths about Polish coal exports have been created again recently. It is mainly coking coal, minimal sales of Bogdanka mines to Ukraine, for example, and private entities. The introduction of an export ban is legislatively demanding. There was no such decision at the level of the European Union, and the introduction of restrictions on freedom of trade is prohibited. Some attempts in this regard were made by Hungary, but the European Commission quickly took an interest, as this is now illegal. Nevertheless, state-owned companies do not export thermal coal. Private entities export this coal, but this also works the other way – the raw material from the Czech Republic, for example, appears in Poland.
Jakub Wiech: Do you know any estimates of how much coal will cost on the retail market in the coming months?
For us, the reference point is the prices quoted at ARA ports. This is such a main reference point for the entire European Union. Today, coal was selling there for about $340 per ton.
So the coal subsidy is enough for… 1.5 tons?
Oh, that’s another trap question! Let me put it this way: we are analyzing the situation nationwide. We know, for example, that due to last year’s mild winter, Polish households have some coal reserves left. According to the estimates of the Central Statistical Office, the average consumption of this raw material in a household during the winter is about 3 tons. So these 3 thousand zlotys give an average support of 1,000 zlotys of subsidy for each ton. Of course, we can enter into the narrative that we will go around the basements and check how much coal someone has, but this is probably not the point. We are committed to providing effective and quick assistance – in this assistance we have assumed an average value of PLN 1,000 per ton. On the other hand, I can answer the accusations about the lack of conditions this way: if we had made it all count for officials in municipalities or citizens to bring receipts, we would have excluded those who have already bought coal and it would have taken a very long time, and we are concerned with quick support. Imagine the burden such additional conditions would create for local governments.
Daniel Czyzewski: I have a few questions, but related to each other. Will the social contract with the mining industry be renegotiated? Will SOEs invest in increasing mining in the coming years? Will power companies put up new coal blocks?
Everything you are talking about is a process of primarily evaluating and updating energy policy. That’s the right reason for these new assumptions. We have completed the analysis of energy blocks. We have an analysis of energy demand for the coming years. PSE conducts this on an ongoing basis – updates on the demand for stable sources and the RES development plan. From these analyses, we found out that there are periods where we need more of these stable sources than we assumed.
So will new coal units be needed?
Not necessarily, I will remind you that we have quite a lot of them in Poland, and we had a plan to close these blocks, to get them out of the system. We made a renewed economic and technical analysis of each of these blocks, which blocks with simple modernization work can be extended for a certain period. We created a whole series of indicators to choose the most efficient model, and we have it locked. It’s mainly about the so-called bicentennials and various optimization measures, but mainly about modernization. We are not talking about all the blocks, we have selected a list of blocks that could stay in the network.
Jakub Wiech: And how long is the list?
We are not sharing that for now. The result of the analysis will be information on how this will affect the possible demand for extraction because it doesn’t always have to be an increase in demand. We are analyzing whether and how this will affect simple optimization measures and increased output at mines. As of today, we do not close the possible issue of increasing mining. We need to complete the analysis. Today, this does not affect the social contract and its main objectives, i.e. 2049. However, the notification of the social contract is ongoing, the European Commission regularly addresses new questions to us, and meetings are held. The current need to increase extraction will not be revolutionary. We are obviously not in a position to significantly increase extraction from April 16 to December. These are measures like working on Saturday and speeding up coal exports. So we are going in the direction of optimization. He observes with amazement that every European Council meeting reveals a new country that talks about increasing mining and the share of coal in the energy sector. Recently it was Greece, talking about doubling the use of coal capacity. Officially, similar plans have been declared by Austria, and at previous councils in many communications in several other countries.
Jakub Wiech: For how long did the Greeks want an increase in coal capacity?
Daniel Czyzewski: Was it for a temporary increase, an emergency, or a long-term increase?
It was about a longer period. The minister didn’t talk about a date while looking at the power he was talking about, it’s not a one-time measure. He was talking about an increase from lignite power generation, which currently stands at 5TWh to 10TWh. The Austrian minister also confirmed an increase in the use of coal capacity, and at previous meetings, the Netherlands, Germany, and Spain have also declared their plans in this regard. Spain was a particular surprise, where the process of implementing the social contract is virtually over. Today it is difficult to find a country that would not carry out such activities. Countries that have nuclear are in a different situation, although the Czechs are certainly also increasing extraction. We see new permits and environmental decisions in the border mines. The Czechs are carrying out these processes quite quickly and feverishly on their side. It can be argued that, as of today, everyone who has coal capacity is tapping into it to some degree. Including Commissioner Timmermans, who has already said twice that coal absolutely does. At the same time, in June in Wroclaw, he told our miners that he would find them better and safer jobs. I didn’t manage to ask at the last EU Council where specifically, but it would have been interesting.
Jakub Wiech: Since nuclear has been mentioned, I would like to ask what projects Minister Naimski blocked? Because that he was blocking, President Kaczynski said in the interview.
Minister Naimski worked with us, first of all, within the Energy Security Team. This is such an inter-ministerial team because energy functions in various ministries and affects many ministries. In the Team, we talk about key investments, infrastructure, supply, security, etc. We functioned in this formula and it was a good cooperation. We also monitored Baltic Pipe, which is not only a needed project but is also being built on time. I can relate from this side to the activities of Minister Naimski and his influence on energy security. He played a positive role in our Team.
What do you think is behind his resignation?
Energy is such an area that it is difficult to have a single view. We have a lot of nuances and approaches, and it’s hard to demand that we all agree. Especially in these turbulent times. I will not analyze the Prime Minister’s decision or the comments that followed. I can refer to cooperation in the ministry, I hope that the Minister will agree to continue to cooperate with us, and we ask him to do so as well. We will also formally address this proposal to him.
In what role would he cooperate?
We will provide information in our own time. We would like Minister Naimski to remain in this sphere because the topic of gas, nuclear, or energy security are areas he has been involved in. I believe he can still do a lot for Poland. He certainly hasn’t said his last word in energy.
Is this proposal for Piotr Naimski an attempt to balance the energy balance of power in the government following the news that Krzysztof Tchórzewski will join the Ministry of State Assets?
We do not approach energy from the personnel side. It would be irresponsible to look at energy from this side at a time when energy security is a priority. We have a goal, which is energy security, and that’s how we select the means, the people, and the tasks to achieve it. Absolutely this personal-political part, which largely happens at the level of the media, and not realistically inside the government, is in the background. I believe that the fact that a lot of personal discussions have been taking place in the media recently is due to the influence of Russian disinformation, to show that we are not in control of the situation and that there are internal disputes, and conflicts. Each of the meetings at the Prime Minister’s office regarding coal is good, peaceful, and conclusive talks; everyone approaches their tasks with responsibility.
Do Solidarna Polska politicians participate in them?
In our ministry, which is responsible for energy security, we have two representatives of Solidarna Polska. We have management meetings on Wednesdays and Fridays, the ministers participate, they have full knowledge.
Coming back to nuclear, should we expect that the deadlines from the Polish Nuclear Power Program will be met and that we will soon choose a technology supplier for the Polish nuclear project even though we are approaching elections?
At our ministry, we have a Nuclear Energy Department so the competencies in this area are with us. We also supervise the State Atomic Energy Agency. We carried out activities related to this project together with Minister Naimski, both in terms of talks with potential technology suppliers (American, Korean, and French) and in the conduct of this project in general. An environmental impact report has been delivered to the General Directorate of Environmental Protection. That year we promised site selection, and this has been done. Now indeed the choice of technology ….
…preferred location has been selected by the investor, i.e. by Polskie Elektrownie Jądrowe, but officially there is no decision of GDOŚ.
When submitting documents for the environmental decision, we had to indicate it.
Yes. The environmental decision has it that it analyzes everything. This location for today is the one that has been indicated.
So I understand that we are indicating AP1000 technology with it? Because in the environmental report of the Polish Nuclear Power Plants this technology was indicated.
The technology, or more its parameters, must be indicated at the time of submission. With every environmental decision, we submit this variant of potentially greatest impact. It is not an indication of the technology, but an indication of the variant of potential maximum impact, and this approach was taken.
Of course, there are a lot of other decisions besides the choice of technology this year. We talk about it this way as if technology is something that gets us the project. It’s a matter of selecting the various entities that will participate in the process.
Will these decisions be made this year?
Probably not all this year, because they are staggered.
But before the elections?
Elections are not a caesura for us, certainly not for me. According to the schedule that was adopted, as of today, it is not at risk at all. From the beginning, this project was shared between our ministry and the Strategic Energy Infrastructure Commissioner. I have already met with Mr. Matthew Berger, we are in contact. This is such a big task that the administration of our ministry is necessary to carry it out, so it will continue to be carried out in this way.
Daniel Czyzewski: Minister, how is the ETS reform you announced going?
It’s a success that the conversation on this topic has started at all.
Since everyone is increasing the share of coal in the power industry, I understand that more countries will support the reform.
We hope so. Looking at the vital interest of these countries and their return to coal in the face of threats to energy security, this should also stabilize the price, and they will pay for emission allowances. That is, the complete opposite of the goal that was set will be achieved. I believe that the depletion of the ETS budget by these funds, which would not be raised for the next few years, would not hurt the transition, and would certainly have a positive effect on energy security. I think the Czech presidency will be a breakthrough when it comes to ETS reform. It is good that this topic, especially the theme of exclusion of financial institutions, has appeared in the European Parliament, which would have been unthinkable not so long ago. It is good that we have moved to the level of debate on the rate of reduction of units of allowances of one and a half, two or two and a half, which is already a lot. This shows that the current control mechanism is not working and needs to be changed. We will be formally submitting a reform proposal to the Czech presidency at the September Council meeting. At the last meeting, the Slovak deputy prime minister spoke about the need to suspend the ETS, and the Visegrad Group supports us in this. We are starting a new round of negotiations under these new circumstances, the maximum goal is to suspend the ETS, and the minimum goal is to complete the reform.
So there won’t be a new campaign with the light bulb and blaming higher energy prices on the EU?
We were not responsible for it, but the ETS obviously affects the bill for the consumer.
Jakub Wiech: Let’s stay at the EU level and reduce gas consumption. What would Poland have to “come down” from? If we were to reduce consumption by 15% then Grupa Azoty would have to stop production.
There have been no such detailed discussions on how this mechanism would work, but it does not apply to us. The Commission calculated what the deficit would be in the worst-case scenario, and it came out that a 15 percent reduction in consumption would put the Union as a whole on the safe side. There was no discussion of the details. Probably because by the time we got to the details, the discussion was dominated by a list of countries’ expectations, dislikes, requests, and questions about the instrument. Ultimately, the reductions are voluntary.
Where in our country could these reductions find an application?
The idea of 15% mandatory reductions everywhere seemed unreasonable from the beginning. The assumption was that we have the same economies, the same demand, supplies, interconnectors, access to the sea, and all the conditions. And above all, energy policy is the responsibility of individual countries and governments, not the European Union. The 15 percent was more of such a discussion starter and topic trigger than an end in itself. We have filled storage facilities, and we have the infrastructure and supply, so it would be highly unfair to require us to make a sharp reduction.
Will Germany ask us for gas?
This is another media narrative. This paper was not a Poland-Germany or Germany-rest of the world mechanism. I think any country with the capacity to do anything to support energy security in other countries would not refuse. Of course, after agreements, established conditions, and in the context of bilateral relations. It’s difficult to judge who, whom and what they will ask for. I am in constant contact with Vice Chancellor Habeck, we keep each other informed about what is happening in the gas systems.
At the Council meeting, I raised that it is difficult to talk about solidarity mechanisms when there is no certainty that each country has used at its level all measures and actions for energy security. Belgium announces that it will extend the operation of its nuclear reactors before asking for solidarity mechanisms, and this is an appropriate action…
…What cannot be said of Germany…
…and this is what we would expect from any country.
Daniel Czyzewski: Aren’t you concerned that the PLN 11.5 billion in coal subsidies stands in contrast to the Clean Air Program and the fight against smog in general?
At the same time as this instrument, we have the Clean Air Plus Program. The Warm Housing program has also been established, My Heat is in operation. In the parliamentary debate, there was surprise that there are individual apartment blocks in Poland where people have tiled stoves at home, and that includes Warsaw. This allowance is a fallback and does not affect the amount of coal that will be on the market. If someone had a stove and planned to buy coal, whether with or without the supplement this coal has to be bought to keep warm. In the Clean Air Plus program, we have provided funds in the order of PLN 1.8 billion for fast track, pre-financing, you can get 50 percent after the application is submitted, and the other half right after settlement. We are constantly analyzing what else we can do to improve the Clean Air program, the market is dynamic. There is not insignificant interest in “Mój Prąd”…
But it has declined.
It depends on how you measure it, by the number of applications you certainly can’t see it.
Jakub Wiech: And by the amount of power installed after net-billing came in?
I think here we still have to wait a while, because we had a large number of new prosumers who signed contracts at the end of the old system, by the end of March. For the time being, we don’t see a decrease in the dynamics of the applications submitted. We have also accelerated the rate of processing, and we see a large increase in applications for heat pumps. I’m already in the new system, I’ve had both a heat pump and a photovoltaic since the beginning of July.
A lot of power?
10 kW. It’s already working, the pump is not an easy mechanism at first, but manageable at the household level.
Jakub Wiech: The last question is about the coming winter. What is your advice to Poles in terms of the coming months?
Daniel Czyzewski: Especially to solid homesteaders?
First of all, stay calm. We are very resourceful as a nation, and if you look at just how much coal is accumulated in Polish basements, you can see that we are well organized. I encourage you to take a look at the Clean Air program, before this and subsequent winters, the increased thresholds, and financing instruments that are in place at the National Environmental Protection and Water Management Fund. There, the bureaucracy is reduced to a minimum. We remove all possible barriers, and I promise, to continue to do so. Let’s stay calm – gas and coal will not run out, we are safe.
Thank you for the interview.