The document Towards a sustainable and integrated Europe: Report of the Commission Expert Group on electricity interconnection targets challenges stereotypical views of Poland as an ‘energy island.’
Poland is committed to the diversification of gas supply sources in Europe, supporting both technology diversity and competition in electricity generation.
Our country is also working towards the development of system interconnections in the European Union, thus contributing towards improved energy supply security, market integration, increased competitiveness of industries and the fostering of innovation in the EU.
The technological, business and regulatory evolution of the electricity market in Europe in recent years has been very dynamic.
Achieving agreed targets and defining new, ever more ambitious aims has become the rule. Poland is taking active part in changing the energy landscape of the ‘Old Continent’.
In developing a rational, sustainable economy which combines economic growth with improved environmental conditions, we have succeeded in reducing the carbon dioxide emissions of our energy sector by 40 percent with respect to Kyoto protocol provisions, while also growing the GDP seven-fold.
The installed wind generating capacity is c.6000 MW, putting Poland in seventh place with respect to other countries in the European Union.
Today, we are a full-fledged participant in the energy transformation which still presents a huge challenge to the Polish economy.
Despite all these hard facts, Poland is still sometimes seen a ‘slower speed’ country when it comes to its energy policy and the structure of its energy systems.
This stereotype negatively affects Poland’s image, meaning it is perceived to be an ‘energy isolationist’ or an ‘energy island’, a state unable and reluctant to integrate with the European electricity system.
In light of new data contained in the commission’s Expert Group report, this image of Poland has to be fundamentally revised.
The report is the result of work carried out by an expert group tasked with proposing a new approach to measuring the interconnectivity level.
This became a key point due to the need for adapting the development of Europe’s electricity interconnections to the standards imposed by the goals of the EU energy and climate policy and integration of the internal market in electricity.
The aim was non-binding; however, the intention was to test the extent to which such a tool would stimulate energy trading between countries.
The situation then was fundamentally different than it is today.
The markets of individual countries have become monopolised and to a significant extent separate from each other, leading to the conclusion that the impetus for strengthening competition, and as a consequence integration, has to come from the outside.
At the time, it was postulated that the electricity interconnection target was to be 10 percent of the installed capacity of every member state.
This definition was highly unreliable, primarily due to physical availability of interconnectors not being the same as their actual availability, resulting in loop flows, among other phenomena.
Along with a dynamically changing electricity generation mix in the EU, referring at the same time to the available interconnector capacity and to the installed capacity volume no longer makes sense as the main criterion for measuring interconnectivity levels.
A new approach
In a study conducted in 2014, still using the old rules, Poland only managed to achieve two percent.
It did not reflect the true situation, as due to the phenomenon of unplanned energy flows from neighbouring countries and, more broadly, negative effects of unstable RES generation beyond Polish borders, the capacity of interconnectors within Poland was significantly reduced for reasons national power system operators could not influence.
A new approach was proposed, based on three ratios:
– Utilisation of interconnector capacity, measured by the ratio of the thermal capacity of interconnectors to peak demand, allowing real reflection of the security of supply
– Utilisation of interconnector capacity measured by the ratio of thermal capacity of interconnectors to the installed capacity of the renewable sources, allowing reliable assessment of the ability to export the RES generated electricity
– The last criterion should be the price spread measured by annual average differences in wholesale electricity prices in 2020; should they exceed €2/MWh, it is suggested an analysis be conducted covering possibilities of increasing the interconnection capacity
In the latest edition of the report, the numbers are definitely in our favour.
With a division of countries into three groups, the first (featuring interconnection levels below 30 percent) includes, among others, the United Kingdom, Spain and Italy.
Poland, however, is grouped together with France, Sweden, Norway, Finland and other countries whose interconnection levels vary between 30 percent and 60 percent.
The third group includes countries with interconnection levels above 60 percent.
Such radical improvement in Poland’s results, in just over just three years, helps evidence the inadequacy of the previously applied criteria.
The results of the report are consistent with assessments of interconnectivity levels by the government of the Republic of Poland.
We have submitted several objections as to the methodology used and the way results were previously calculated.
The way the matter was dealt with by the European Commission was also clearly a result of Poland’s position in the EU Council.
Proposals for new formulas respond to numerous problems Poland has pointed out at the EU forum. It is essential we make the landscape of Poland’s cross-border transmission infrastructure more credible and realistic.
The results contained in the report may also be used for a new and reliable analysis of investment requirements, thus making technically and economically justified decisions in this respect.
Therefore, the results published in the ‘Towards a sustainable and integrated Europe’ report are important and we welcome them in two contexts: firstly, the report firmly dismisses suggestions that Poland is an ‘energy island’, and secondly it may be used to rationalise decisions of an economic nature concerning the electricity market.