Transformation and price of energy. Will electricity be more expensive due to climate change?

Currently we get energy in Poland mainly from burning fossil fuels. We generate electricity mainly from the combustion of coal, heat also from coal and gas, and automobile transport relies mainly on internal combustion engines that use oil or gasoline.

Although these polluting energy sources are also considered the most economically viable, energy prices have increased significantly in recent times. In the case of electricity, even a European has been accused of this climate policy. The “Polish Power Plants” initiative, which brings together energy companies from the State Treasury, placed a banner in the public space, which stated that “EU climate policy = expensive energy and high prices”, and “the tax climate change in the European Union is also up to 60% of energy production costs”.

“Really CO2 Emissions Trading Scheme – and not an indefinite climate tax – is responsible for around 60%. the cost of energy production. But – first of all, it is a system whose profits go to the Polish state budget, and not to the European Union budget. Second, it should be noted that this is 60%. the cost of energy production itself, not 60%. the amount we see on the electricity bill. The consumer also pays VAT and excise duties, as well as distribution, transport and capacity costs, etc. As a result, the ETS system is not responsible for two-thirds of the electricity bill, but rather for about a quarter “- commented then analyst and economist Paweł Czyżak from think Therefore, due to the message potentially misleading, the WWF Poland Foundation filed a complaint with the Advertising Council regarding the Polish Powerhouses campaign.

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Later it also turned out that the fact that electricity was expensive was influenced by a record high margin. Analysts from the Instrat foundation estimated that a typical Polish power plant in December last year established a margin … in the amount of 70%. the cost of energy production.

So you see that climate policy and energy transformation are not the cause of the increase in electricity prices in Poland. This is also not the case in the case of fuel prices. In this case – as in the case of natural gas – it is of course the most important The Russian invasion of Ukraine and its economic consequences.

But can the energy transition help us… bring down our energy prices? It turns out that in the long run, that will definitely be the case. The first thing to point out is that renewable energy sources they give independence – no country will limit our access to wind or sun. But above all, the production costs of wind and solar energy are systematically and constantly falling, also in Poland.

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Around the world, wind and solar energy are already cheaper than those generated by burning coal. The International Energy Agency announced in 2020 that solar power plants have become the world’s cheapest source of electricity in history.

According to the IEA, new large-scale photovoltaic projects in Europe are capable of supplying energy at 30-60 USD/MWh (114-228 PLN/MWh). Such rates are certainly below costenergy can be supplied by new coal-fired power plants.

Furthermore, as stated in the report of the WiseEuropa institute, despite the negative assessment of the investment environment for renewable energies in Poland – for example the existing distance law – thanks to technological progress, one can s Expect that by 2025 investments in photovoltaic installations and onshore wind farms (and possibly also offshore wind farms) will become significantly more profitable than investing in new coal-fired units. The authors of the report point out that the realization of the aforementioned situation in 2025 seems likely “how much Poland will remain a member of the European Union“.

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