Warsaw’s energy transition proposals will require state aid approval from the European Commission, which is expected to insist on a coal exit date.
The Polish government is planning to nationalise dozens of coal plants and use public money to keep them running to allow state-owned energy companies to invest in greener alternatives.
The proposal by the ministry of state assets is part of negotiations between the government and energy companies to restructure the ailing coal sector.
Under the plan, 70 lignite coal units, which generated more than half of Poland’s electricity in 2020, will be purchased by the state and handed over to a single state-run National Energy Security Agency (NABE).
In a statement, the ministry said this would enable a “gradual and long-term transformation of the power sector” by replacing coal with low-carbon and green sources. In 2020, Poland’s share of electricity generated from coal dropped below 70% for the first time.
The merger of coal assets into a single entity is designed to give three state-owned energy companies – PGE, Enea and Tauron – fiscal space to develop clean energy sources.
The government has previously agreed to continue to subsidise coal production until 2049 – an exit date campaigners and experts say is far too late.
“The government will be fighting on two fronts and I believe it will be impossible to get approval for both from the Commission. It will be no nice Sunday talk,” Robert Tomaszewski, a senior energy analyst at Warsaw-based think tank Polityka Insight, told Climate Home.
Tomaszewski said Brussels was unlikely to green light Poland’s restructuring proposal for coal plants without a date to shut down old and inefficient plants.