Concept of government-subsidized energy prices for a group of individual consumers in Poland as a means to reduce smog

Abstract

Integration of conventional energy production with the Polish mining industry is a complex task in the light of decarbonisation guidelines and the development of Renewable Energy Sources. Smog as a seasonal phenomenon requires differentiation between the use of coal as fuel in conventional power plants and combined heat and power plants, and the burning of coal in the municipal and individual household sector. Domestic coal is a strategic fuel in energy and heat generation. The household sector, being the main cause of smog, is the sector that most needs to be changed. The main goal of the paper is to analyse the transition from fossil fuel combustion in households to electric heating, taking into account boiler efficiency and the current market prices of both coal and electric energy. Based on the performed calculations, we propose providing consumers with regular support in the form of electricity price subsidies (as a subsidy to the spread between the price of electricity and coal) when they decide to abandon coal and switch to electric (or district) heating, thus reducing smog. The simulation results may help in deciding on the subsidy level for both energy costs and total costs.