Risk Management Scenarios for Investment Program Delays in the Polish Power Industry

Stanisław Tokarski,Adam Smoliński,Małgorzata Magdziarczyk

doi:10.3390/en14165210

Stanisław Tokarski, Adam Smoliński + Show 1 more

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https://doi.org/10.3390/en14165210

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Journal: Energies	Publication Date: Aug 23, 2021
Citations: 12	License type: CC BY 4.0

Affiliation: Central Mining Institute, Opole University of Technology

Abstract

The introduction of the Green Deal in 2019 by the European Commission poses a significant challenge for EU member states whose power generation is based primarily on fossil fuels. In Poland, nearly 80% of the electricity is produced from fossil fuels. This paper presents an analysis of the risks related to the delays in the accomplishment of investment programs in the Polish power industry. Three scenarios were prepared for balancing the deficiency of about 3 GW of power and 20 TWh of electricity in the national power grid in the years 2031–2040, which may emerge as a result of the delayed accomplishment of investment programs, particularly in nuclear energy. The first scenario presents a variant entailing the rapid phasing out of coal and the replacement of the decommissioned power units with new gas-powered units, where the missing power volume would be partially balanced by import, and partially through gas-based production in the new power units. The second scenario assumes that the missing power would be balanced by retaining the existing, older coal-powered units, whereas the required electricity would be compensated by import. The third scenario involves the production of the missing volume of electricity using coal with CO2 capture in existing or new coal-powered units.

Highlights

Falling behind other economies will always result in adverse effects for the national economy and in losing the benefits associated with the spearheading of new trends
The construction of the third nuclear power unit in Olkiluoto in Finland was commenced in 2005, but it may be brought into operation in 2021, whereas its cost has reached nearly 8 billion EUR, while a similar situation can be observed in the French Flamanville project [18]
When analysing the scope of the investment program and its schedule (31 GW of new power sources must be introduced by 2035, including two nuclear power units), it is necessary to consider the risk of a 5–10year-long delay in the completion of the program and to undertake the action necessary to manage this risk

Summary

Introduction

The Polish electric power system is part of the European system in terms of both physical connections and the organisation of the energy market [1,2]. It is linked to the West European system (the continental market) with synchronous connections through high-voltage power lines to Germany, Czechia and Slovakia, and with asynchronous connections to Sweden and Lithuania (direct current connections) [3,4]. There is a connection with the Ukrainian system, which operates independently of the common European system [5,6]. According to European regulations, it is recommended for cross-border connections to provide the physical capacity for transmitting 15% of the power required for the interconnected system by 2030. The Polish electric power market has been operating together with the European market for almost 20 years.

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