ZPP Newsletter
Warsaw, 28 March 2022
Position of the Union of Entrepreneurs and Employers (ZPP) on Poland becoming independent of Russian supplies of primary commodities
Diversification of gas supply is the key to become independent of Russia
Union of Entrepreneurs and Employers welcomes the announcements about the recapitalisation of investment projects in the gas sector. The development of strategic infrastructure, such as the Świnoujście LNG terminal, the FSRU floating regasification unit in the Gdańsk Bay, or the gas interconnectors with Lithuania and Slovakia, is a solid basis providing technical means for the diversification of gas supply. The above initiative opens us up to new directions for partnership, which, in the long term, will certainly contribute to a reduction in gas prices and, above all, to a complete withdrawal from the Russian supply.
Forecasts for future years indicate that market demand for natural gas could increase by as much as 50% over the next 10 years. Peak-day gas demand, on the other hand, can periodically increase by up to over 100% compared to previous demand records reported in 2019-2021. In view of the emerging challenges related to the efficient transmission of such a large volume of gas, it is also important to enhance the domestic transmission system.
Nuclear energy will be an important factor in building energy independence
Growing concerns about the electricity availability, as well as its cost to the end user, raise legitimate questions about nuclear power. We appreciate the position of the Ministry of Climate and Environment on the need to speed up the construction of nuclear reactors. Nuclear energy will be another element in the optimum structure of the energy mix, which will translate into stability of electricity supply for domestic industry and all households.
It should be noted that it is not possible to fully replace coal energy with renewable energy sources. Such a solution would be highly risky from the point of view of the stability of the domestic energy system. For this reason, we call for action to be taken as soon as possible to ensure the effective implementation of investments in nuclear energy.
In our opinion, Poland now has exceptionally favourable political conditions to start building a power plant. In view of the current conflict with Russia, all the EU Member States are looking for ways to become independent of that country’s energy resources. One of the measures most frequently chosen by EU countries is to change their approach to nuclear energy, thereby extending the lifetime of existing nuclear units or expanding the infrastructure with completely new power plants.
Furthermore, the European Commission’s recent decision on taxonomy, which recognises nuclear and gas energy as transition sources on the road to climate neutrality, should encourage us to invest in nuclear energy. The EC’s modified position allows us to obtain preferential financing for nuclear-based energy projects.
Unused potential of RES
New investments in gas and nuclear energy are definitely needed, but they are also highly capital intensive regarding public finances. In our opinion, it is also worth using legal solutions that do not involve any financial burden on the state budget. One action that can be taken immediately by the lawmakers is to amend the so-called anti-windmill law. Liberalising the 10H rule included in this law would contribute to the development of private distributed energy production, requiring little government funding. Energy from onshore wind farms may be the cheapest source of energy, which is important both for individual consumers and for Polish entrepreneurs, for whom energy is an increasing cost of conducting business activities. Such a move would also contribute to the development of Poland’s energy independence – and in a very short period of time, which is why we are calling for this regulation to be changed as soon as possible.
Embargo on Russian oil
Contrary to the fears of some commentators, there are many indications that Poland is able to manage without Russian oil supplies. The oil port capacity would more than make it possible to import oil by sea in quantities that would meet Poland’s demand. Meanwhile, supply sources can be successfully diversified. An example of a valuable initiative in this respect is the partnership between PKN Orlen and Saudi Aramco, under which the Saudi company has undertaken to supply between 200 000 and 400 000 barrels of oil per day. In general, there is plenty of oil in the world but, of course, increasing production cannot happen overnight for logistical and technological reasons. According to available data, Polish oil reserves can secure domestic demand for about three months of standard consumption.
In view of the above, it makes sense to include the embargo on Russian oil in the sanctions imposed on the country. We believe that Poland should take a particularly firm stance on this and urge its European partners to adopt the most far-reaching solutions.
Conclusions
The decision to invade Ukraine should be met with a firm stance by the Western world, primarily by isolating the Russian Federation in all areas of international trade, with particular emphasis on the energy industry.
The Polish Government has accurately defined the areas that require immediate investment to ensure the stability of the domestic energy system, including the country’s energy independence. We would like to draw attention to the additional measures that can be taken without burdening the treasury with further projects. It is also important to respond to these problems with actions that do not further increase the – already very high – producer and consumer inflation.
