External Costs to Agriculture Associated with Further Open Pit Lignite Mining from the Bełchatów Deposit

Abstract

The energy crisis in Europe and Poland caused by the conflict in Ukraine has renewed the debate in some countries about the wisdom of abandoning the use of local fossil fuels. The rise in gas and oil prices with little change in the cost of extracting lignite from open pit mines has led to a renewed consideration of lignite as the cheapest source of energy. This is not entirely true, as the level of costs at power plants ignores many external costs that are not included in the costs of energy producers, but are borne by the general public or other parties. One such cost is the external costs incurred by agriculture as a result of open pit lignite mining and the associated depression funnels. The Bełchatów lignite open pit is the deepest open pit in Europe and is expected to be in operation by 2038. The aim of the study was to assess the external costs that farmers will incur as a result of further open pit mining of brown call from the Bełchatów deposit, i.e., between 2023 and 2038 as well as in the 16-year extended period of restoration of water relations around the open pit. The decrease in crop yields and animal numbers was estimated in a comparative analysis, which compared changes in the yields of selected plants and animals in the area affected by the open pit to those in neighboring areas that were not affected. The analysis showed that the external costs to be borne by agriculture as a result of the further exploitation of the Bełchatów deposit will amount to an average of EUR 2.90 billion, and, depending on the calculation variant, from EUR 2.51 billion to EUR 3.14 billion. Including this amount in the cost of electricity production would result in an increase of EUR 9.11·MWh−1, which is 18.8% of the average wholesale price of electricity in Poland in 2017–2021. On the one hand, the increased consumption of lignite in electricity production, which is currently observed and may last for several years, may shorten the life of the open pit by up to 2 years. Shortening the mining period by one year, assuming that all the coal in the deposit is mined, will reduce the external costs for agriculture by about EUR 185 million, i.e., EUR 0.58·MWh−1. On the other hand, the increase in European Emissions Trading System (ETS) prices, the decrease in gas prices and the increase in energy production from renewable energy source (RES) will make lignite power generation profitable only during the periods with the highest prices, so that by 2038 lignite will not be mined in its entirety. Every 10 Gg of coal that will not be mined by 2038 will result in an increase in external costs in agriculture per MWh of EUR 0.23·MWh−1.