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Commentary of the ZPP: Activation of seniors as an opportunity to fill supply gaps in the labour market

Warsaw, 21 December 2022 

 

Commentary of the ZPP:
Activation of seniors as an opportunity to fill supply gaps in the labour market

 

  • The analysis of demographic trends, conducted based on the Statistics Poland data, indicates that persons at the age of 50 and over will constitute approximately 50% of Polish society in 2050.  This means the necessity of professional activation of that group, with special emphasis on persons of retirement age.
  • In Poland, approximately 90 % of people reaching retirement age decide to leave their jobs.  Experts point out that retirement is too often treated as a compulsion rather than an option.
  • In the coming years, the average age of an employee will increase and so will the average age of a customer.  Activation of seniors in the labour market may be a response to the inevitable change in consumer trends.
  • Shaping the senior policy in relation to the labour market should be preceded by a thorough diagnosis of the needs of the diverse group of people aged 50+.

In Poland, the number of persons receiving a pension is growing. Based on the Statistics Poland data, approximately 5.98 million persons were receiving pension in the period from January to April 2021. After a slight decline in the period from May to August, the number of beneficiaries increased to 5.999 million in September and was growing.  In October 2021, 6.02 million persons were receiving pension, 6.03 million in November and 6.04 million in December of the same year.

Conclusions drawn based on the Statistics Poland data make it necessary to analyse the forecasts related to the number of senior citizens in Poland. Statistical data analysts have calculated that the number of persons aged 60+ is expected to increase to approximately 10.8 million in 2030, reaching 13.7 million in 2050. This means, taking into account other demographic data, that persons aged 50 and over will constitute approximately 50% of the Polish population.  Polish residents at the age of 60 and over will constitute just over 40% of the population in 28 years’ time. This data involves an unprecedented increase in the burden on the pension system and a sharp reduction in the working-age population but not only.  On average, the group of professionally active persons will be much older than today.

The issue needs to be addressed now. In Poland, approximately 90% of persons who reach retirement age resign from work.  This is related to the perception that reaching the retirement age is a sort of compulsion to retire and not one of the possibilities.  Based on the Statistics Poland data, only 39% of persons aged 60-64 and only 6% of persons over 65 will be professionally active in 2020.  Although companies recognise the problem, the percentage of employed senior citizens is still significantly low in Poland, compared to most Western European countries.

The situation is partly made better thanks to the inflow of economic immigrants and refugees – especially from the territory of Ukraine. However, in any case, the scale of that phenomenon must not obscure the consequences of the ageing of the society, which will be of key importance for shaping the labour market in Poland. At the same time, one should not forget that, in addition to a larger number of older employees, there will also be a greater number of older customers in Poland. This correlation may have a positive impact on the already existing trend of employing senior citizens. In Poland, in the first quarter of 2021, the number of working women at the age of 60 and over and men over 65 years old was  687,000. In the second quarter, it was already 721 thousand persons, and  754 thousand persons in the third quarter.  This is a positive trend; however, it does not compensate for the persistently low fertility rate, which will amount to 1.4 children per woman in 2022. The economic indicators, which are worrying the society, will not bring a demographic miracle.

Adapting the labour market to the needs of older workers is becoming a great challenge. Shrinking down of the group of people in the traditionally-understood working age will translate into changes in the employment model in companies in the near future, and increase the number of senior citizens in professions where their representation is currently low. In addition to the increase in the average age of employees, the aforementioned increase in the average age of customers will also be a challenge for the market, which will translate into an evolutionary change in consumer trends.

There is no doubt that employers will have to implement certain methods to activate senior citizens in their enterprises, organizations or institutions.  Actions making the workplace more accessible to persons at the age of 50 or over should be subject to special supervision. The methods of implementing those measures should include special activation programmes, retraining courses (including language courses) and better use of flexible forms of employment.

The analysis of demographic and macroeconomic trends leaves employers no choice.  Already today, companies are forced to implement measures to build an inclusive organisational culture that takes diversity into account, i.e., a diversity and inclusion strategy. 
State structures – both at the central and local government levels – must also become more involved in the process of activating senior citizens in the labour market than they are today. Although initiatives such as “A skilful worker has no age” and other related initiatives are being implemented in the country, their scale and the response of the labour market still remain too small. In the meantime, although many companies still do not want to accept it, Generation X will be retiring in 15 years’ time.

Senior policy strategies must not take on the form of coercion. As practice shows, activation “with the use of force” does not bring the expected results.  The real needs of senior citizens must be taken into account and correlated with the needs of the labour market. It should not be forgotten, and many initiators of programmes addressed to the oldest citizens have fallen into this generalising trap, that the group of senior citizens is diverse in terms of age and territory – the perspective of the residents of large cities is different from that of medium-sized agglomerations and inhabitants of rural areas. It also seems economically justified – within a rational framework – to institutionally support forms of care for the elderly and children to increase the participation in the labour market of people who also have caregiving responsibilities.

Measures to increase the participation of professionally inactive senior citizens in the labour market can reduce the non-wage burden on salaries and increase the profitability of taking up work. The estimated number of persons at the age of 50 and over who could supply the labour market is 2 million. A bold move, albeit politically difficult, would be to raise the retirement age.  Such a decision would certainly increase the efficiency of the pension system, which will face an increased disproportion between the number of professionally inactive seniors and those of working age soon. Based on the Personnel Service report, professional activation of persons aged 50+ and bringing the level of participation of senior citizens in the labour market closer to the level in Western European countries “could, in the long run, bring an increase in GDP of up to USD 66 billion”.

Activating senior citizens in the labour market is not only an opportunity but also an obligation of employers. More effective integration of employees aged 50+ in the labour market is an opportunity to increase the economic and social well-being of Poles – all the more so that their health condition and life expectancy increase year by year.


See:
21.12.2022 Commentary of the Union of Entrepreneurs and Employers: Activation of seniors as an opportunity to fill supply gaps in the labour market

Commentary of the ZPP on draft Regulation of the Council of  the European Commission on the development of renewable energy as a key form of achieving energy independence of Europe

                                                                                                              Warsaw, 20 December 2022

 

Commentary of the ZPP on draft Regulation of the Council of  the European Commission on the development of renewable energy as a key form of achieving energy independence of Europe

 

The Council of the European Commission is proposing another instrument to speed up investment in RES (Renewable Energy Sources) – the Regulation of the Council of  the European Commission on the development of renewable energy as a key form of achieving energy independence of Europe;

Shortening the investment process in carbon-free energy sources is, in the opinion of Brussels, the basis for achieving independence from fuel from Russia;

The proposals of the Council could trigger a thaw for government-frozen solutions in the field of modern renewable energy;

Brussels does not look at the legal blockages in the area of renewable energy and speeds up the introduction of solutions for wind farms, district heating and even biomass and biomethane, one by one.

When reading the draft Regulation of the Council of the European Commission establishing a framework to accelerate the introduction of renewable energy solutions, it should be noted that most of the regulatory dispositions of the Regulation are in line with the expectations of the green energy sector in our country.

On many occasions, as the ZPP (the Union of Entrepreneurs and Employers), supported by the RES industry in Poland, we have drawn attention to the need to facilitate investment in that sector, which could primarily include post-mining and industrial areas. It seems reasonable to introduce regulations obliging administrative bodies, entities that deal with energy transmission and distribution, to determine appropriate areas for RES installations, where significantly simplified administrative procedures would be introduced to allow investors to quickly implement projects (e.g. road lanes along motorways, former landfill sites, large surface car parks) both for environmental (negligible, minimal impact on the environment), social (lack of conflicts and acceptance of residents) and technical (grid connection conditions) reasons. In this way, the installation of renewable energy generation infrastructure would be facilitated as administrative bodies, local authorities and grid companies would have to verify the compliance of such installations with local environmental and technical requirements. The issue of selecting areas for faster RES investments is proposed in the from of yesterday’s amendment to REpowerEU approved by the European Parliament – discussed at the end of the text.

With regard to photovoltaic investments, the Commission suggests reducing the time limit for issuing a building permit to one month, which seems a bit too short in our national circumstances.

The Regulation demonstrates the determination of the European Union countries to develop renewable energy sources and there is no doubt that the war in Ukraine will speed up decarbonisation processes in Europe.

The future economic image of Europe will be shaped based on green energy. This should be a supra-political guideline for the decision-makers in our country, which does not mean us giving up defending our energy interests, even those based on fossil fuels for a long time to come.

An example of reconciling energy interests is the assumptions of the programme “Bloki 200+”, as part of which the development of renewable energy is based on stabilising our own coal sources. Such a policy is certainly in line with the Regulation of the Council and it just needs to be properly presented and justified.

The fact of diversity of energy and heating situation in Poland must be understood in Europe, especially considering the new geopolitical conditions we find ourselves in after Russia’s aggression against Ukraine.

It should be noted that the draft Regulation does not refer to combined heat and power plants but only to the expansion of renewable energy power plants. Given the challenges of the heating sector, in terms of the need for its transformation, which is linked to, among other things, the proposals of the ”Fit for 55 package”, we believe that it would make sense to introduce a principle based on which the construction of RES installations in existing district heating systems could also benefit from accelerated procedures. This could be expressed as follows: The authorisation process for the expansion of district heating systems to include renewable energy projects and authorisations related to upgrading the assets necessary for their connection to the grid, should not exceed six months, including environmental impact assessment, if required by the relevant legislation. To be consistent, in the draft Art. 2 sec. 2, after the word “power plant” the expression “or combined heat and power plant” should be added, and in Art. 4, after each word “power plant” the expression “or combined heat and power plant” should be added.

We need to be aware that, in the future, it will be renewable energy sources that will be the basis of the European energy market and that Poland, with its huge burden of the energy sector with coal sources, must remodel its energy market to a much greater extent than other EU countries.

Observing the costs of generating energy from renewable sources today, it is already possible to predict the costs of energy and heat on European markets once energy independence is achieved. Poland cannot remain outside that market as high-cost sources and a loss of competitiveness would threaten our entire economy.

The Council formulates the need for immediate action and this requires more details  as some of them will require statutory changes. Although the Council indicates that this is an internal regulation with the possibility of extension, it can be considered that it will be in place for a very long time and is likely to take a permanent form.

The Regulation draws attention to further works on the rules for direct contracting, the so-called CPPAs (Corporate Power Purchase Agreement), which is an extremely important form of the bottom-up shaping of energy market. This is closely linked to the development of distributed energy. Further on, the Regulation draws attention to the need to disperse energy and heat generation sources. So far, the Polish energy sector has been moving towards centralisation, i.e., in the opposite direction.

The document emphasises the need to reduce procedures for those sources that have particularly high generation potential and investment in which will bring rapid results for the system. This concerns onshore wind farms and large-scale photovoltaics. Meanwhile, the 10H rule blocking the development of that form of energy generation is still in force and the investment in photovoltaics is currently not particularly supported in our country. The sdherence of a Polish legislator to the assumptions of the proposed Regulation would increase the potential of onshore wind farms by at least 10 gigawatts of installed capacity, and perhaps as much as 20 gigawatts of installed green energy in solar sources, which could translate into the production of 40 terawatt hours of green energy per year in 2030. The acts allowing that level of green investment are being prepared. Today, their adoption depends solely on the political will of decision-makers.

The Council encourages joint action and cooperation within the framework of the Single Market Enforcement Taskforce (SMET ), which seems particularly relevant for our energy sector as we could assimilate some best practices and also, through such cooperation, we could participate in shaping the future energy market in Europe.

According to the proposal, the Regulation would have direct and immediate application, which is expected to lead to a swift, uniform and EU-wide approach to the various legislative procedures in the green energy investment sector. The Commission plans to consult stakeholders to ensure that the Regulation is implemented as effectively as possible.

The strategic objective of the Regulation is to reduce energy demand and replace natural gas, oil and coal supplies with renewable energy – within a foreseeable time horizon.

The Regulation of the Council also draws attention to connection problems and suggests connection facilitation for renewable sources, which, in turn, fits in with the Direct Lines Act currently being developed.

The expansion and modernisation of existing power plants, in the opinion of the Council, is an extremely important part of increasing the generation potential of renewable energy sources. Maintaining or increasing the capacity of wind farms based on fewer, but more efficient, wind turbines should be an administratively straightforward task that would require no special paperwork.

This fits in with the law on the joint use of connection infrastructure by renewable sources (cable pooling) which the Ministry of Climate and Environment is currently preparing.

The Regulation pays particular attention to heat pumps as an extremely important solution for the future of modern district heating. District heating accounts for half of energy consumption in the EU countries. Heat pumps may also be of particular importance in Poland, especially in rural areas and small towns. Perhaps this is a solution for the country’s district heating systems, where heat pumps could be combines with a gas source – measurably reducing gas consumption.

The reality of ground pumps with a vertical collector and water pumps currently looks as follows: building permit is required to install a heat pump if the works are to be carried out in a building listed in the register of historic buildings. If the building itself is not listed in the register but the area is – an application must be submitted. Both of the above applications must be supplemented with a consent of the conservation officer. A building permit may also be required for the construction of a facility in ‘’Natura 2000’’ area. Additionally, ground and water pumps require geological works. For that purpose, a project of geological works needs to be created, which needs to be presented to the district governor. Water heat pumps also require a water permit if groundwater extraction of more than 5 m³ per day is planned or extraction from a water intake of more than 30 m depth is necessary. All of the above-mentioned permits are issued by the district governor, and the same applies to the applications – they must also be submitted to the district governor. However, it is a different unit in the district governor’s office each time. Furthermore, pursuant to Art. 29, sec. 4, pt. 3 c of the Act of 7 July 1994 Construction Law (consolidated text Dz.U. /Journal of Laws/ of 2021, item 2351), the installation of heat pumps with an installed electrical power of no more than 50 kW does not require a building permit or application.

The introduction of the proposed rule that the authorisation process for the installation of heat pumps should not exceed three months will help to unify the regulations in force in Poland.

The principle of energy solidarity, which is a general principle of the European Union invoked in the Regulation, may be of particular significance for Polish industry as it will make it possible to purchase green energy until the time the domestic sources will meet the needs of domestic factories. Although the Regulation only refers to new authorisation procedures, in our Polish circumstances it should be extended to include already initiated procedures for obtaining building permits and connection conditions.

Despite so many positive stimuli in the Regulation, the reality of the Polish energy market shows that the amendment of Directive (EU) 2018/2001 to increase the EU target for 2030 to 45%, compared to 40% in the previous proposal of 14 July 2021, is unlikely to be achievable in our country.

An EU-level approach is needed to create the right incentives for the Member States with different levels of ambition to accelerate, in a coordinated manner, the energy transition from a traditional fossil-fuel-based energy system to a more integrated and energy-efficient one based on renewable energy, which is rightly indicated in the Regulation with the statement “a higher level of funding should be introduced for investments in renewable energy sources for companies and individual citizens”.

What the Regulation does not contain, and should, is considering the specificity of the Polish market.

To simplify the licensing and operation of renewable energy power plants, they should be within the competence of a special administrative unit at a voivodeship level.

The authorisation process for the installation of solar energy equipment and associated storage and grid connection facilities in existing or future constructions created for purposes other than solar energy production should be handled by the aforementioned special administrative unit.

The process of issuing permits for the construction of large PV farms should also be shortened (DSO grid connection conditions).

To achieve a rapid transition and to use renewable sources in Poland, the modernisation and construction of new grid infrastructure should be a priority – the grid is currently outdated and it is not possible to distribute renewable energy.

A system of gratification should be introduced for investors in the field of RES installations: PV installations, heat pumps, windmills, geothermal, biogas plants, hydrogen, etc. – introducing incentives to encourage entrepreneurs to invest in RES.

It should be possible for electricity or heat producers to demonstrate/report the percentage of RES (company- and country-specific) in the energy production process in return for appropriate incentives/allowance to reduce the financial burden on energy producers to invest towards climate neutrality.

Taking into account the direct cooperation of parties in the field of RES investments, rules of cooperation between the state, the energy generation company and a private person should be introduced: provision of property by a private person for a renewable energy investment to an energy generation company in exchange for discounts in the form of a lower price for electricity or a percentage share of the generated energy. The terms of cooperation could apply to individual persons as well as to a group of residents in a local community where the RES investment would be carried out. This would speed up the implementation of the tasks without having to go through the process of acquiring land for renewable energy investments.

We would like to request the deletion of the provision in Art. 4, sec. 2, ”unless there are justified safety concerns or there is a technical incompatibility of system components”. This provision leaves a lot of room for interpretation and may constitute a false argument based on which administrative authorities may refuse to grant permission for the expansion of RES power plants.

Last minute information

In the opinion of the ZPP, the proposal of the Regulation is a clear signal of the direction in which the European energy industry will go and that the decarbonisation process is irrevocable.

The issue of accelerating investment in RES is wildly topical. On 14 December, the European Parliament voted in favour of amendments in the REPowerEU document to speed up the licensing of renewable energy sources. An essential element of the document, which is part of the REPowerEU strategy, concerns the creation of “renewables acceleration areas”.

The purpose of the proposed law is to speed up the procedure of granting permits for new RES power plants, thereby increasing the domestic production capacity of the EU. The EU Member States still need to approve the text before it comes into force. The EU countries are currently examining the proposal of the Commission and are expected to take a position next Monday paving the way for talks with the Parliament with a view to finalise the bill after the new year.

The amended text proposes shorter deadlines for the approval of new installations – up to a maximum of nine months for the so-called “renewables acceleration areas”, which will be defined individually by each EU country depending on local circumstances. Under the principle of “tacit consent”, an application will be considered approved if the competent authority does not respond within the set deadline. Outside those areas, the acceleration process should not last longer than 18 months.

Under the proposal, renewable energy projects will be considered as projects of
“overriding public interest” and may therefore benefit from simplified procedures and specific derogations from EU environmental legislation.

Furthermore, the EU countries will have to ensure that permits for the installation of photovoltaic devices on buildings will be issued within one month, and a notification procedure will be sufficient for smaller installations, below 50 kilowatts.

While biomass incinerators were not part of the original proposal, a last-minute amendment by the EPP group gives the possibility for the EU Member States to include them in the fast-track permitting system.

“Renewables acceleration areas should be created at least for wind turbines and photovoltaics and could be created for biomethane plants”, reads the final text voted on by the MEPs. And while biomass plants are generally “excluded from renewables acceleration areas”, an exception could be made “for installations located in outermost regions”, it is added in the text.

According to the approved proposal, no revewables acceleration areas can be designated in nature conservation areas or bird and marine mammal migration routes – with the exception of artificial and built-up areas such as rooftops, car parks or transport infrastructure.

However, environmental groups have expressed concern that projects in “focal areas” will be exempted from environmental impact assessments (EIAs), such as those required under the Birds and Habitats Directives.

The Union of Entrepreneurs and Employers follows with interest the process of establishing the EU consensus in the area of accelerating investments in renewable energy sources and declares its readiness to issue an opinion on draft Polish laws arising as a consequence of that process.

See: 20.12.2022 Commentary of the ZPP on draft Regulation of the Council of the European Commission on the development of renewable energy as a key form of achieving energy independence of Europe

Report Conference – Summary of the Rebuild Together Programme

Warsaw, 13 December 2022

 

Report Conference – Summary of the Rebuild Together Programme

 

On 13 December, a conference summarising the project of the ZPP (the Union of Entrepreneurs and Employers), “Europe – Poland – Ukraine. Rebuild Together” took place. This was another initiative of the ZPP, following the social campaign “We help Ukraine”, the purpose of which was to create and strengthen the relationship between European, Polish and Ukrainian business communities and to prepare a framework for cooperation in the future reconstruction of the Ukrainian state and economy.

As Marcin Nowacki, the Vice President of the Union of Entrepreneurs and Employers, pointed out: “The essence of the project is to support Ukrainian business in the process of entering the Polish market and cooperating with Polish companies. Based on this, we want to establish an agreement, so that the Polish business will play a major role in the reconstruction of Ukraine in the future”.

The first stage of the project was the organisation of a series of meetings – five meetings in a form of round table talks – the goal of which was to establish a dialogue, discuss expectations and priorities related to the reconstruction of Ukraine and to identify industries and companies ready to cooperate to strengthen the Ukrainian economy. As part of that initiative, face-to-face meetings were held with Polish and Ukrainian representatives of industries crucial to the maintenance and reconstruction of the Ukrainian economy. Additionally, two main events were organised within the scope of the Rebuild Together programme – in Warsaw, on 6 October, and in Kyiv, on 28 November.

The reconstruction of Ukraine will be a multinational action of the EU, G7 countries. Nonetheless, the  funds for the reconstruction of Ukraine from individual countries will be allocated based on the preferences of business – noticed the Vice President of the ZPP.

The Vice President of the ZPP was supported by other participants of the conference. As Bartosz Marczuk stated, “The reconstruction of Ukraine is an opportunity for cooperation and building our position in the long term perspective – the fact that we are talking about that now is of great importance, as the process of rebuilding Ukraine has already begun.

There should be as many micro-level relationships as possible. It is necessary to network and use the capital of Polish business”-  emphasised the Vice President of the Management Board of the Polish Development Fund.

Energy security will undoubtedly play a key role in the reconstruction of Ukraine and its economic activity. Mateusz Domian spoke in that context.

The lack of electricity affects all industries, the whole business” –  said the acting Director of the Representative Office of PKN ORLEN in Ukraine, “The lack of electricity can be compensated with the use of other raw materials, especially diesel oil; however, the situation in Ukraine is also difficult in that respect. It is extremely important for Ukraine to maintain, after the war, its independence from Russia and Belarus in terms of raw materials and continue its cooperation with Poland and the European Union in that respect.

With regard to the opportunities and possibilities for the development of Polish business in the present situation, the last speaker at the conference agreed with the previous speech makers saying: “Geographically, Poland is in a privileged position when it comes to the possibility of expanding economic activity in the process of rebuilding Ukraine and cooperation with Ukrainian business. Polish logistics is definitely attractive for Ukrainian companies”.

All conference participants emphasised the need for further action in terms of implementation of the objective of the programme ,,Europe – Poland – Ukraine. Rebuild Together”. The Vice President of the ZPP stated that the activities to establish and strengthen the relations between the European, Polish and Ukrainian business communities have only just started and added that the ZPP wanted to continue to take an active part in them.

The summary of all the activities under the “Rebuild Together” project, which has been implemented for more than six months, is the report which contains the conclusions and a description of individual actions undertaken as the result of the meetings of the representatives of economic sectors in the form of round table talks and conferences.

 

See: 13.12.2022 Report: Summary of the project “Poland-Europe-Ukraine. Rebuild Together”

Opinion of the Chief Energy Expert of ZPP: Worrying conclusions from the Conference of the Parties on the future of Polish renewable energy industry

Warsaw, 6 December 2022 

 

Opinion of the Chief Energy Expert of ZPP: Worrying conclusions from the Conference of the Parties on the future of Polish renewable energy industry

 

At the end of November, the Ministry of Climate organised an event, the Conference of the Parties to the Sectoral Agreements, with the aim of summarising the progress of work in the area of RES development in Poland. The Ministry signed four sectoral agreements on the promotion of investments in renewable energy sources in 2021 and 2022:

  • Sectoral Agreement for the Development of Offshore Wind Energy,
  • Sectoral Agreement for the Development of the Photovoltaic Sector,
  • Sectoral Agreement for the Development of the Biogas and Biomethane Sector,
  • Sectoral Agreement for the Development of the Hydrogen Economy.

The aim of the sectoral agreements is to remove barriers to the development of this energy sector, and to promote investment in this area.

Sectoral agreements were signed by both leading Polish companies in the renewable energy sector and representatives of the Ministry, local authorities and the main renewable energy industry associations.

The absence of the onshore wind sector seems to somewhat distort the view of renewables as a whole and is due to the protracted process of passing an amendment to the law blocking the development of this type of investment.

It is not a particularly revelatory observation that increasing regulatory pressure from the EU is forcing Poland to take urgent action to decarbonise its industry. Energy prices have risen significantly. Polish companies must keep up with the changes, otherwise they will go under. Meanwhile, the key to saving money and making businesses low-carbon has been sitting in the parliamentary freezer for five months, and there are still no new windturbines.

I have been following the recent dynamic changes in the Polish energy market with concern, and it is not conducive to the growth and security of Polish entrepreneurs today. One of the key challenges for companies today is the availability and price of electricity, which has increased by almost 500% for some businesses in just two years. The energy price freeze planned for next year is only a temporary measure that does not solve the problem, but rather suspends it for a few months, and only for some entities.

In the current energy crisis, Polish companies, especially industrial ones, need cheap green electricity to meet the ambitious requirements imposed by EU directives. Onshore wind power, which has been the cheapest source of power generation for years, is crucial for saving money and achieving low carbon emissions. It is high time to combat all barriers to wind technology, but first the so-called distance law, which has been crippling the industry for years, should be liberalised.

The interests of enterprises, including those that are more or less energy-intensive, are increasingly under threat. Electricity prices strongly affect the economics of companies, including large enterprises, often ruining the monthly budget. The government’s efforts to freeze prices would not have been needed if solutions had been implemented in time to directly inhibit the cause of the electricity price increase. Allowing new wind power plants to be built in Poland will mean that in 2-3 years’ time, when more wind power will be in the system – we will have significantly reduced the risk of large price fluctuations.

The energy crisis calls for new wind power investments that will give us energy sovereignty. The fact that wind is the cheapest source of electricity is confirmed by energy auctions and, in addition, it permanently lowers the final bill for the consumer by affecting the result of the merit order based mainly on coal in Poland.

The transition of companies to green energy is also one of the main business trends at the moment. It is driven by the desire to reduce the cost of energy consumed, but also by growing expectations from customers and business partners who expect supply chains with a minimal carbon footprint. Corporations in the transition to green energy are often driven by ambitious targets in their strategies or even pressure from competitors. The surge in corporate interest in green, clean energy in recent years has become widespread across Europe.

Building a stable legislative and regulatory environment is crucial from the perspective of any industry when making investment decisions.

The aim of the aforementioned Conference of the Parties was to illustrate the development potential of renewable energy sources against the background of legislative needs, as well as to show the potential of Polish industry in building a new energy system in Poland.

As Chief Energy Technology Specialist at the Union of Entrepreneurs and Employers, but also because of my other functions, I had the opportunity to lead a panel discussion: Prospects for the development of photovoltaics in Poland – Opportunities and threats. I addressed one of the threads that is an essential piece of the wider puzzle.

The conference was divided into two parts. The first one discussed the prospects for the development of renewable energy sources in Poland against the background of the country’s security, in the context of Poland’s changing geopolitical situation.  

The second part of the Conference was devoted to the thematic panels of the Sectoral Agreements, where the challenges associated with each type of renewable source were discussed.

The conference was attended by the Minister of Climate, Ms Anna Moskwa, the Minister of Economic Development and Technology, Mr Waldemar Buda, the Secretary of State, Mr Ireneusz Zyska and the Head of the Energy Supply Unit from the International Energy Agency, Mr Christophe McGlade.

The first part of the conference, with a panel on the country’s energy security issues, showed how complicated the whole Polish economy was as a result of the military threat from Russia. I don’t think anyone doubted that the new geopolitical situation is permanent and that energy security is highly vulnerable to hostile acts, as shown by Russia’s actions in Ukraine.

Distributed power generation therefore takes on a different meaning than we have so far expected. In addition to its role in modernisation, and economic or social importance, it can be a key element of the country’s security. Renewable energy is the primary mechanism for building a distributed energy system in any country.

It was clear from the statement of the President of the Energy Regulatory Office, Mr Rafał Gawin, that the way the entire Polish transmission and distribution system functions needs to change. Also the President of the Management Board of the Polish Power Transmission and Distribution Association (PTPiREE), Mr Robert Zasina, emphasised the role of DSOs in the future as a key player in the energy market. The Union of Entrepreneurs and Employers has long raised the issue of the commercialisation of low and medium voltage lines and it is a pity that this idea has not been discussed in more depth. The forthcoming law on direct lines fits perfectly into this theme, although the project has encountered a competence dispute between ministries and it is as yet unclear which ministry will continue to work on this regulation.

Mr Józef Węgrecki, Member of the PKN Orlen’s Management Board, pointed out how important a role investments related to distributed energy, hydrogen policy and renewable energy sources play in the company’s policy. Minister Ireneusz Zyska assured the full support of the Ministry of Climate for all measures to increase the level of investment in the green energy sector.  

Together, we must do everything possible to create a national supply chain for the industries involved in new energy investments. The administrative regulations currently in place, which block the development of investments in distributed energy, are becoming an extremely serious barrier to development.

Today, the liberalisation of administrative barriers is becoming a major focus for ministries connected to the energy market, as well as the creation of a friendly investment environment for investments in renewable energy sources. Blocking the development of onshore wind energy sector certainly does not help to create such an environment.

The panel I moderated, dedicated to photovoltaic sources, illustrated what development potential this source of green energy has. The current slowdown in investment in this sector, too, is solely due to legislative delays. A representative of Bank Ochrony Środowiska (“Bank for Environmental Protection”), Ms Anna Żyła, emphasised that banks are fully prepared to finance investments in photovoltaics.

The conference was a summary of the activities of the various parties to the sectoral agreements to date, with the exception of the hydrogen agreement whose representatives did not attend. While the attempt to take a holistic view of the future shape of Poland’s energy sector is to be welcomed, the Conference focused on the country’s rather distant energy future.

Meanwhile, the immediate problems of our energy and heating industry are already starting to be clearly felt by both the Polish economy and society. And these are both supply and cost problems. They are connected with the prices of energy sources and the scarcity of both renewable and conventional energy.

The Union of Entrepreneurs and Employers sees the need for ad hoc measures to optimise the effects of crisis phenomena in the Polish energy sector and the Polish heating sector by 2030. Only then will we be able to plan for the optimum development of individual distributed energy sectors.

Such measures, according to the Union of Entrepreneurs and Employers, can include:

  • Liberalisation of the law blocking onshore wind energy sector development
  • Legislative support for direct lines
  • Continuation of the Bloki 200+ (“200+ Blocks”) programme, in its justified part
  • Passing a law to facilitate green investment on brownfield sites.

As representatives of employers and entrepreneurs from most economic sectors, we would like to call for a significant acceleration of legislative procedures concerning basic laws and regulations enabling investment decisions to be taken quickly in the Polish energy sector to stabilise energy prices and supply in the coming years.

The future of the entire Polish economy may depend on the pace of these investments.

This is particularly important in the area of local distributed energy, where it should be made easier for companies to invest in their own generation sources as well as in local transmission networks.

 

Włodzimierz Ehrenhalt,
Chief Energy Expert of ZPP

 

See: 06.12.2022 Opinion of the Chief Energy Expert of ZPP: Worrying conclusions from the Conference of the Parties on the future of Polish renewable energy industry

Commentary of the Union of Entrepreneurs and Employers on the Communication from the Commission to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions…

Warsaw, 5 December 2022 

 

Commentary of the Union of Entrepreneurs and Employers on the Communication from the Commission to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions. Digitalising the energy system – EU action plan

 

  • The European Commission has stepped up its efforts to develop a common European energy data space;
  • with the implementation of an appropriate energy data sharing framework, we could gain more than 580 GW of flexible energy resources by 2050;
  • the implementation of the digitalisation will improve the demand for flexibility in the EU’s electricity grids.

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Digitalising the energy system – EU action plan is a long-developed action plan, formulated and recently submitted by the European Commission for consultation, and intended to define actions for the coming years in the area of digitalisation of the European energy system. The Ministry of Climate and Environment is coordinating the preparation of the Polish government’s position on the proposals set out in the communication. Comments on the document had to be submitted by 23 November this year. We hope, however, that these are not the final provisions of the document, and it will be widely consulted with the public.

According to the document Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Digitalising the energy system – EU action plan the EU’s overarching goal for the coming years is to become independent from non-EU fossil fuels. According to the Commission, the only way to achieve this goal is

  • to install photovoltaic panels on the roofs of all commercial and public buildings by 2027 and on all new residential buildings by 2029,
  • to install 10 million heat pumps in the next five years,
  • to replace 30 million cars on the road with zero-emission vehicles by 2030,
  • to reduce greenhouse gas emissions by 55% and to achieve a share of renewables in the energy consumed of 45% in 2030, among other things.

All these objectives can only be achieved if the energy system is ready for it. Energy efficiency, resource efficiency, decarbonisation, electrification, sector integration and decentralisation of the energy system require a massive digitalisation effort. Without digitalising the energy system, it will be difficult, if not impossible, to achieve the goals set by the European Green Deal and the European 2030 programme ”Path to the Digital Decade”.

Between 2020 and 2030, around EUR 584 billion will need to be invested in the electricity grid, particularly in the distribution system. A substantial part of this investment will have to focus on digitalisation, as digital communication with energy consumers will help avoid the need for USD 270 billion investment in new electricity infrastructure.

Modern technology will help to visualise our energy consumption in real time and get tailored advice on how to reduce it. Digital tools can automatically control room temperature, charge electric cars and manage appliances so that energy is used at the same time when prices are at their lowest, while maintaining an optimal and healthy environment at home or at work.

Already 51% of all households and SMEs in the EU use smart electric meters.

The use of data across the energy value chain and linking this data with weather models, mobility patterns, financial services and geographical location systems through increasingly powerful computing capacity will enable the provision of innovative services at new levels of precision and adequacy and contribute to economic growth and job creation in the EU.

With the implementation of an appropriate framework for sharing energy data, more than 580 GW of flexible energy resources that take full advantage of digital solutions could participate in wholesale markets by 2050. It is estimated that this would cover more than 90% of the overall demand for flexibility in the EU electricity grids. Enabling smart and bi-directional charging of electric vehicles, the participation of virtual power plants in energy markets, and harnessing the potential of energy communities, smart buildings and smart heating with the use of heat pumps could contribute most to meeting this demand. In addition, car batteries can be used to store surplus energy and make it available when needed. This is achieved by keeping track of when the vehicle is in the garage, predicting periods of non-use and calculating how much spare capacity can be made available.

The aim of EU actions is to establish a common European energy data space and to ensure its robust governance in the form of a coordinated European framework for sharing and using this data. The preparatory phase is expected to be completed by 2024, with implementation starting immediately afterwards.

The EU’s research, innovation and digitalisation programmes will continue to play a key role in this context. Therefore, the Commission intends to support – through the “Digital Europe” programme – the implementation of a common European energy data space. Actions in this area will build on the demonstrations made by a number of projects funded by “Horizon Europe”.

To further support the digitalisation of the energy sector, the Commission will officially re-establish the existing Smart Grid Task Force (SGTF). Under this smart energy expert group, the Commission will set up, by March 2023 at the latest, the “Data for Energy” (D4E) working group. This group will include the Commission, Member States and relevant public and private stakeholders to contribute to the creation of a European framework for energy data sharing.

The Commission announces in “Digitalising the energy system – EU action plan” that it intends to support EU Transmission System Operators (TSOs) and Distribution System Operators (DSOs) in the creation of a digital twin of the European electricity grid, an advanced virtual model of the grid. The purpose of the digital twin is to make the grid, and with it the energy system as a whole, more efficient and smarter.

The sustainable design of digital devices and clear information on their environmental footprint and reparability and recyclability can, on the one hand, contribute to reducing the use of raw materials and facilitate a shift towards circularity, but on the other hand, can put an additional burden on fossil fuel-based economies.

Collective energy schemes that involve a whole community, village or town can allow such consumers to connect and scale-up their potential interaction with the electricity system. Such schemes can enable communities to, for example:

  • better monitor their performance as measured by energy consumption or
  • share photovoltaic panels or otherwise engage in power sharing or peer-to-peer trading of electricity generated by joint investment projects, which can reduce their dependence on high electricity prices set in the wholesale market.

The proposed framework for an Ecodesign for Sustainable Products Regulation[1] is aimed at:

  • establishing EU regulations to ensure that only “circular” products (i.e. products that are more durable, can be easily reused, repaired and recycled, and are made up of recycled materials as far as possible) are placed on the EU market;
  • creating a framework for digital product passports containing information on energy-related aspects (carbon footprint), among other things; and
  • setting mandatory minimum sustainability requirements on public procurement of products, for a selection of product groups including electronic and ICT products. To address the energy consumption of working ICT devices, the Commission will develop an energy labelling scheme for computers that takes into account the different uses of computers, such as (i) office work, (ii) gaming and (iii) graphic design and video editing, respectively.

The Commission will aim to establish an EU Code of Conduct by 2025, based on the work done to measure the environmental impact of electronic communications services. The EU’s Code of Conduct for the Sustainability of Telecommunications Networks can help guide investment in energy-efficient infrastructure.

Bearing in mind the content of the document submitted to the Union of Entrepreneurs and Employers for consultation, on 23 November this year we sent our proposals to the Department of Informatisation of the Ministry of Climate and Environment. We pointed out that such a wide-ranging document setting out policy directions cannot be over-regulated in terms of the energy transition, as the Polish energy market has its own specific characteristics that distinguish it from other countries on the old continent. On the positive side, there is a proposal to involve entrepreneurs in the work of future advisory bodies. We also emphasised the need to develop electricity grids in the context of problems with connecting new power generation installations.

***

[1] Proposal for a regulation establishing a framework for the setting of ecodesign requirements for sustainable products and repealing Directive 2009/125/EC, COM(2022) 142 final.

https://eur-lex.europa.eu/legal-content/PL/TXT/?uri=CELEX:52022AE0598

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