The coal imperative
Marek Pozzi: Of course, reducing emissions by 20 percent is really difficult to accomplish since we know that Poland's energy industry, which is the main producer of CO2 emissions, is based on coal. I think that reducing emissions by 20 percent in the next 20-or-so years is unrealistic and, moreover, I'm not convinced that it's necessary since - as we know - the countries that are mainly responsible for the growth of CO2 emissions are outside the EU, such as China, India and the US.
Now, what kind of efforts is Poland undertaking [to reduce emissions]? There are three groups of undertakings. First, there's the modernization of existing energy technology. For example, this year Kompania Węglowa and RWE signed an agreement to construct a modern sub-bituminous coal-fired power station. This will be built in Upper Silesia. The efficiency of this type of power station is much greater than that of existing traditional power stations. If the efficiency of a currently functioning power station is 33-35 percent, then this new type is about 46 percent - in other words, one of more efficient power stations in the world. Therefore, this new efficiency will, among other things, lower CO2 emissions.
We should remember that Poland has comparatively large sources of coal and its use is one of the ways that Poland can ensure its energy security. What other way can we do this? We can import natural gas or oil, but these are costly alternatives since we don't have enough of our own sources. We can invest in nuclear energy, but we know that there are a number of problems associated with this.
For example, from the moment the decision is made to build a nuclear power plant to the moment it enters use, we're talking about 10 to 15 years. So, this isn't an immediate solution, but rather a long-term one. Secondly, there's no one to realize this project easily because in Poland we don't have specialists in the construction of nuclear energy plants. Thirdly, there's a problem with storage, and I'm not even talking about the ecological issues of storing radioactive waste. These are problems that we need to resolve if we want to develop nuclear energy. We also know that one nuclear energy plant will not solve our problems.
Plus, we're still left with coal. Wanted or unwanted, this is our wealth when it comes to energy supplies.
And the other two groups of undertakings?
The second is what we call CO2 capture and storage. But here we are also encountering problems. It's estimated that introducing this method will result in a doubling of energy prices, since the equipment to capture, transport and store CO2 emissions consumes large amounts of energy and is very expensive. This is a way to lower CO2 emissions, but it is very costly.
And the third method is increasing the usage of non-traditional energy sources. Here, we are looking at different sources, like wind energy. But a study was done on how much wind energy would be needed for the city of Warsaw alone, and the whole Mazowieckie voivodship would have to be one big wind farm. It is unrealistic that wind energy, on a large scale, could be a primary energy source. Wind or biomass energy can be a source of local energy for individual use or small communities. It's obvious that it won't work on a large scale.
Is it worth investing in sequestration? What about the question of CO2 storage that many experts are concerned about?
This is a technological challenge and it is crucial for Poland that such experimentation is carried out. It is through this type of research that our own technological thought is developed.
I'd like to note that attempts are already being made to carry out sequestration in coal mines, either in those areas where coal has already been exploited, or those with deposits of methane. In the latter case, the CO2 could be used to push the methane out.
Such processes pose a significant challenge since they require certain geological conditions. The geological structure of such a mine must be impermeable so that the CO2 does not leak out. We have plenty of such areas, but they need to be researched carefully. This is a scientific problem to be worked upon for many years to come.
How will cutting CO2 emissions and emissions trading affect the Polish economy?
If we needed to purchase emissions credits, then of course the Polish and EU economies would both become uncompetitive. Why? Because the main emitters of CO2 are China and India, countries outside the EU. So, if we're going to be paying for tonnes of CO2 emissions, the cost of energy production will rise and that's when the economy will become uncompetitive.
How does Poland compare to other EU countries in terms of reducing emissions in the past?
In the last 15 years, Poland has reduced CO2 emissions more than the EU expected from it. The EU was committed to reductions of seven percent and Poland has reduced emissions by eight percent, placing itself among the group of EU member states who are significantly reducing CO2 emissions.
How will CO2 emissions cuts affect the Silesia region?
There are a number of factors that will influence the Silesia region's development. For instance, coal is not only extracted for the purpose of burning, but we also extract coal for coking. And this coke reaches high prices on the international market because emerging economies, like China, have developed dramatically in the last 15 years and they require large supplies of steel. And steel production requires a lot of coke.
For example, in Silesia, Jastrzębska Spółka Węglowa, which extracts large amounts of bituminous coal, is a sector leader in terms of large investments. This is a company which has, after many years of stagnation, started investments in new coal mines.
What has the state of Polish hard coal mining been like in the last 15 years? Well, in that period the industry has let go some 240,000 miners and production has been reduced by 100 million tonnes, which resulted in the closure of a number of mines.
Are industry firms coping well with these problems?
If we're talking about coal for coke, Jastrzębska Spółka Węglowa's plans for development are not bad. But if we are talking about coal that's used for energy, then the situation is different. There was huge underinvestment in [Polish] mines for many years and they were either closed or restructured and closed. Therefore, there's a lack of funds for basic work, meaning accessing new coal deposits. But recently I've heard that the World Bank has agreed to grant financing for those types of investments.
Like I said before, in order for Poland to secure its energy supplies, it needs to use coal. It has no other choice. Poland doesn't have the funds to import other energy supplies. Plus, since Poland is accustomed to coal, all of its power plants are built to use it. We can't change that in the next couple of years in order to import natural gas or oil and use that to run the plants. New power plants would have to be built. This would mean huge amounts of money just to change the way the plants function.
But where do we get the funds? Modernization alone costs around zł.150 billion. And I believe that costs to build new power plants have not been estimated yet. So this is not possible in the next 10 years.
What else can be done to clean up the industry?
We are also working on other ways to extract energy out of coal. Through gasification of coal, for example, but there are also other ways to get clean energy out of coal.
Another method is through the use of hydrogen, getting the energy out of coal without having to extract it. These technologies are at the stage of development and research. They would literally involve no emissions, but in order to implement these technologies, it would take more than a decade.
In your opinion, is Poland reducing CO2 emissions fast enough?
If we are talking about the speed at which we are reducing CO2 emissions, compared to other EU countries, it's really fast. We are doing it quickly and faster than the average rate of EU member states, which is a huge success.
Will demand for coal drop in the future?
According to the estimates of [various] international agencies, the demand for coal will be on the rise until 2030. A rise in demand of up to 30 percent is taken into account - a third more coal than was used in 2006.
Coal is the energy of the future, although one should not forget about clean-coal technologies. They may be expensive, but this is our future.
