Poland may stop producing coal until at least 2018

Poland may take a break from coal until at least 2018

The Turów coal mine (Polish: Kopalnia Węgla Brunatnego Turów S.A.) or KWB Turów, is a large open pit mine in the southwest of the country. By Nejmlez (Own work) [CC BY-SA], via Wikimedia Commons.

Poland is considering to stop coal production at several of its mines until at least 2018 in an effort to help prices by reducing a global oversupply, while trying to keep state operations afloat and avoid job cuts.

The conservative Law and Justice party (PiS), which won parliamentary elections in October, would consider merging the country's top power firms — PGE, Tauron, Enea and Energa.

"Personally I think Poland needs one big power company," Grzegorz Tobiszowski, responsible for coal issues, told Reuters. He added the move would likely face scrutiny from the European Union over anti-monopoly regulations.

Poland's troubled coal mining sector became a focal point ahead of the recent parliamentary election, as the outgoing government failed to rescue the troubled Kompania Weglowa (KW), the EU's biggest coal miner.

About 90% of Poland's energy is generated from coal, an industry with a strong local union, which can partly explain why Warsaw has long opposed the EU drive to curb carbon emissions.

According to Eurostat data, around 83% of energy consumed in Poland is produced from black and brown coal, while in the rest of the EU the average is 28%. With UN climate negotiations in Paris coming up in December and the EU committing to cut greenhouse gas emissions by 40% on 1990 levels by 2030, Warsaw has been under significant pressure to reduce that figure.

Currently, around 10% of the country’s energy needs are met by renewables (the average in the EU member countries is twice as high, at over 20%) and only 4% comes from natural gas and oil (while in the rest of the EU it is 25%), mostly imported from Russia.

Due to technological underdevelopment, the productivity of Polish mines is very low, with 648 tonnes of coal produced per worker per year while in the worst US mines it is more then 2,000 tonnes.

Despite that, Polish producers continue to invest billions in modernizing their coal-fired plants or in building new, more efficient ones. At least four new coal-fired power plants are expected to come on line by 2019, as the country faces a deficit of around 8 gigawatts of capacity starting in 2020, once the EU’s Industrial Emissions Directive kicks in.