15 October 2023 may become a significant day for Poland and its energy transition process. In an election with a record voter turnout of 74.4%, liberal opposition parties won a majority of seats in both houses of parliament, thus marking the end of the eight-year rule of the United Right (PiS/ZP). At the helm of the government will be the liberal Civic Coalition (KO), the centrist “Third Way”, and The Left, with Donald Tusk as Prime Minister. Before the election, the main question was: who would win and lead Poland through the decisive years of this transition? Now that the answer is known, many new questions arise. Who will be responsible for the government's transition plans? What will be the priorities? Will the new coalition follow the plans started by PiS, such as the construction of a nuclear power plant? How will Poland's relationship with the EU change? Some answers can be found in the new coalition agreement. Many other answers will likely only be known after a few weeks or months, as President Andrzej Duda (Andrzej Duda) is delaying the power transfer process to Donald Tusk (Donald Tusk).
Events expected over the coming weeks
Following the elections on 15 October, the first session of the new parliament took place on 13 November, but we are still waiting for the appointment of the new Prime Minister and government. The decision on who to give the first opportunity to form a government is entirely up to the President. Andrzej Duda, who was the PiS candidate for the presidency, chose the former PiS Prime Minister Mateusz Morawiecki (Mateusz Morawiecki), even though his party did not have a ruling majority and thus had practically no chance of forming a coalition. The change of government is being delayed: the new majority will only get the chance to nominate its own candidate – and that will be former Prime Minister Donald Tusk – after M. Morawiecki fails to win a vote of confidence. The whole process could take several weeks, so it is expected that the new Polish government will only begin its work in mid-December.
As soon as Donald Tusk is confirmed as Prime Minister, an important decision will have to be made regarding who will lead individual government bodies. Some politicians and think tanks have put forward the idea of a Green Transition Ministry. There is much speculation about who could lead such a ministry. Paulina Hennig-Kloska from the “Third Way/Polska 2050” organisation is mentioned as a potential minister, and media reports suggest she has a good chance. The “Polska 2050” organisation is one of the main coalition partners that focuses on climate issues in its policies. The Green Party would also be interested in this position, but given that it only has three MPs, its influence is much smaller. It is difficult to say whether any official announcement will be received from the coalition before D. Tusk’s official nomination.
Changes are expected for state-owned energy companies. During the PiS government's term, the then-opposition frequently criticised the politicisation of state-owned enterprises, such as the fuel giant Orlen or the largest electricity company, PGE. In the new coalition agreement, the parties promise to depoliticise state-owned enterprises. This means that new boards and CEOs can be expected at Orlen, PGE, and other companies in the weeks following the formation of the government. These companies are extremely important to Poland’s energy transition process.
C19 Economic Recovery Fund – when and how?
During his election campaign, Donald Tusk said that he would provide access to billions of euros from the Recovery Fund on the “first day after the election”. The funding, which will largely be directed towards green projects, was halted during the PiS government. This occurred due to a dispute between the previous government and the European Union over rule-of-law issues in Poland. D. Tusk will not be able to fulfil his promise until he officially becomes the head of government. Despite this, he still travelled to Brussels to meet with European Commission President Ursula von der Leyen (Ursula von der Leyen). Donald Tusk promised that upon taking office as Prime Minister, he would secure the allocation of the funds. How will this happen if resolving PiS's rule-of-law violations takes time? D. Tusk did not answer this question, but it is clear that he must hurry. The money needs to be spent within the specified deadline. It must be done by the end of 2026, and less than three years is a short period for certain large projects in the energy sector. These decisions will likely be among the first made by the new coalition. In the coalition agreement, the Recovery Fund is seen as an important source for financing the transition.
Electricity prices could be one of the first major problems for the new government. The cost of electricity production has risen significantly over the last two years, and household bills were kept low thanks to government subsidies. These subsidies are an increasing burden on the state budget, and some representatives of the new government's liberal wing have repeatedly criticised government handouts publicly. As the new year approaches, decisions on whether to maintain or change the subsidies will need to be made quickly. Another issue concerns electricity prices for businesses and industry, which have become a serious problem for the manufacturing sectors.
Latest news from Poland – a summary of last month
The elections held on 15 October marked the biggest change in Polish politics since 2015. After eight years of right-wing PiS/ZP rule, the party lost its parliamentary majority. Although it had more votes than any other party, three former opposition groups have now gained a majority and will form the government. Although the liberal/left opposition ran for parliament in alliances, it is worth remembering that each of them consists of two or more parties, so the new coalition will include both larger and smaller parties: ranging from the KO-member Platforma Obywatelska with over 120 deputies (out of a total of 460 parliamentary deputies) to the Green Party (also part of KO) with only 3 deputies.
A week before the first session of the new parliament, the former opposition groups – PO/KO, “Third Way” and “The Left” – signed a coalition agreement, which was made public (showing changes compared to the previous ruling party). The document has 13 pages and outlines the government’s priorities in general terms. In the eighth point, the parties agree to “cooperate to mitigate climate change and limit its impact on life in Poland”. The parties are “determined to accelerate the transition to green energy” by “unleashing the potential of wind, solar, and biogas”, as well as by increasing competitiveness and private sector involvement (e.g., more investment in renewable energy sources, including partnerships with local governments). The coalition wants to continue developing nuclear energy and investing in electricity grids. One of the more specific proposals is to direct all funds from the EU Emissions Trading System (EU ETS) to finance the transition. The agreement also mentions key objectives – a fair transition and the fight against “energy poverty”. One chapter of the agreement is devoted to nature conservation. It also includes measures that can be considered climate-related activities, such as new and stricter forest protection measures. A ban on using wood as fuel in municipal power plants has been introduced, and the acceleration of housing insulation programmes has been set.
The European Council’s agreement on the proposal to amend the EU electricity market came with some long-awaited news for Poland – a (short) lifeline for some older coal-fired power plants. They were scheduled to stop receiving state subsidies in 2025. The decommissioning of these power plants threatened Poland with an electricity generation gap. Now, the most polluting power plants will still be able to receive funding until the end of 2028 – provided that conditions (such as an impact assessment regarding emissions) are met and an agreement on the Council’s position is reached in negotiations with the parliament.
Polskie Elektrownie Jądrowe (PEJ), the state-owned company tasked with building a nuclear power plant, received “one of the most important administrative decisions” required for construction on 26 October. The Pomeranian Voivodeship authorities issued a decision on the location of the future power plant in Choczewo, Pomerania. The new nuclear power plant will have three nuclear reactors with a total capacity of 3,750 MWe.
Greenpeace is protesting against the construction of a floating liquefied natural gas (LNG) terminal near Gdańsk. The state-owned company Gaz System plans to build a floating terminal that could process up to 6.1 billion cubic metres of gas per year. The company claims that this project is important to meet gas demand without importing fuel from Russia. It is also said to have regional importance, as the gas will likely be directed south to Slovakia or the Czech Republic. Greenpeace called this project harmful to the climate and the local environment in the Gulf of Gdańsk. The organisation had called on citizens to express their objections to the project during a public consultation that lasted until 16 November. Since 2015, Poland has had an onshore LNG terminal in Świnoujście (with a capacity of 6.2 billion m³ per year), and since 2022, the Baltic Pipe gas pipeline from the North Sea (10 billion m³ annual capacity).
Key upcoming events and information
A few weeks before the elections, the “Energy Security and Climate Experts Council” – an independent and informal group of experts developing joint recommendations in the field of energy and climate policy – published “recommendations on key measures in climate and energy policy for the new Polish government”. The publication provides (it is also available in English) a broad insight into what experts consider the biggest challenges and necessary reforms in Poland’s energy sector. After the election, some members of the Council also held debates on the same topic (a broadcast is available, but only in Polish).
The Instrat foundation will organise an event in Warsaw on 12 December entitled “Paths for the decarbonisation of Poland’s energy sector and economy until 2040”. It is a great opportunity for anyone in Warsaw to gain insight into expert opinion on Poland’s transition process. It is particularly worth noting that the programmes of some political parties are partly based on the modelling of Poland’s energy system and transition paths carried out by Instrat.