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The Warsaw Voice » Other » March 18, 2009
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Solidarity and Energy Security
March 18, 2009 By Andrzej Ratajczyk   
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A common energy policy coupled with efforts to diversify energy sources and production technology is the best way to ensure the security of energy supply in Poland and other countries in the European Union, said participants in an international conference held by the Voice in Warsaw in early March.

The conference, entitled The Polish and European Energy Security, provided an opportunity for Polish government members, EU officials and domestic and foreign energy companies to exchange views on issues including energy security.

Speaking at the conference, Jerzy Buzek, former Polish prime minister and now a member of the European Parliament, said that "it is possible to prevent energy crises by diversifying raw material sources and supply routes." according to Buzek, a good way of building energy security is to develop energy production from local energy sources.

"Oil and gas [supplies] come with the danger of political dependency," Buzek said. "Coal, renewable sources and nuclear energy are safe from the point of view of the european Union."

Buzek added that the EU adopting the so-called third energy package will contribute greatly to Europe's energy security. The package regulates issues such as cross-border energy links, a single energy market, and energy solidarity.

EU energy commissioner Andris Piebalgs, who also attended the conference, said the package could be adopted by the end of April.

Conference participants agreed that the EU needs swift political and organizational measures to deal with a number of problems on the road toward improving the energy security of the member states and developing a single fuel and energy market. There are many gas and oil pipelines in Europe and many system operators. But there are few connections between individual pipeline and power systems and many of the existing links do not have sufficient capacity. This is why in January this year, when Russian gas supplies to other European countries via Ukraine were disrupted, it was impossible for the EU to provide Slovakia and Bulgaria with emergency gas supplies, experts said.

The EU also lacks a common policy to negotiate raw material and electricity prices with the main suppliers, conference participants said, and EU governments and companies should find a way to agree on joint investment projects.

But all this is supposed to change. Marek Woszczyk, vice-president of the Polish Energy Regulatory Office (URE), said work was under way in the EU on appointing a common administrator to coordinate a number of issues on behalf of national operators, including gas transport through EU member states and non-EU countries and concluding contracts for gas purchases.

Piebalgs said the EU should work out scenarios of anti-crisis measures to be taken in case supplies from the main source are disrupted. The point is to adopt an action plan that would enable EU members to "function in such a situation" for more than 30 days, Piebalgs said. He added that it is also necessary to work out a trilateral mechanism that would help solve possible problems with gas supplies from Russia via Ukraine.

Piebalgs also supported an idea to establish a common system with non-EU countries to notify each other about decisions on investment projects in the energy sector, as this would make it possible to reduce investment risk, he said. In the future, projects to be carried out on behalf of the EU and intended to benefit its member states, such as the construction of the North and South Stream gas pipelines, should be evaluated in terms of their cost to the end user, Piebalgs said. Economic rather than political factors should be taken into account, he added.

Janusz Steinhoff, former deputy prime minister and economy minister, said "energy security is costly because it requires investment." However, money for investment projects can be acquired by privatizing the energy sector, steinhoff said. "State ownership will not guarantee greater energy security," he added.

One way to improve energy security is to make a better use of the fuels available in EU countries, officials said.

Marcin Korolec, deputy economy minister, said, "It is important to have a common standpoint and send a signal to other countries that the EU, while pursuing ambitious plans to reduce carbon dioxide emissions and energy consumption, would welcome similar activities on the part of the largest energy consumers. Unless other countries follow the EU's example, its economic competitiveness will deteriorate and many production plants will be relocated outside Europe."

According to Korolec, the greatest challenges the Polish energy sector has to deal with are growing demand for energy, the need to put an end to Poland's dependence on oil and gas imports, modernize the country's infrastructure, and reduce the negative environmental impact of the power industry. Poland's Energy Policy Until 2030, drafted by the economy ministry, is meant as a response to these challenges, Korolec said.

The new energy policy takes a different approach to the use of indigenous energy sources. Poland's energy security will be based on its own power resources, particularly coal, officials say. As a result, the production of electricity and, to a large extent, heat will no longer depend on external supplies. As regards oil, liquid fuels and natural gas, the draft urges diversification in terms of both suppliers and technology.

Projections for Poland's future demand for electricity point to the need to expand the country's power generation capacity. And Poland's obligations to reduce its greenhouse gas emissions mean that it has to use low-emission technology. This is why Poland will use any technology available to generate electricity from coal on condition that it leads to a reduction in air pollution and carbon dioxide emissions, Korolec said. He added that coal would remain the main power resource in Poland.

"We hope the power generation sector will expand thanks to the development of technology for converting coal into liquid and gaseous fuels, accompanied by an increased use of carbon capture and storage (CCS) installations," Korolec said. "An installation of this kind now under construction in Bełchatów can count on 200 million euros in EU co-funding over the next two years."

Jerzy Andruszkiewicz, vice-president for operational processes at Polskie Sieci Elektroenergetyczne Operator SA:

The aim of PSE Operator is to guarantee Poland's energy security and ensure a high standard of power transmission. Currently existing legal barriers have to be overcome if we are to perform our tasks properly. Only then will we be able to make up for being behind by many years and carry out our ambitious investment plan.

At present the company owns more than 13,000 km of highest-voltage network, of which just 10 percent is new power lines, less than 10 years old. PSE Operator has drawn up a development plan for the coming years. Up to 2020 the company wants to assign zl.17.5 billion for investments improving energy security and build over 2,000 km of new power lines. In 2009 alone, the company plans to spend zl.900 million, about two-thirds of it on modernization and construction of the power network. Expanding the power network is necessary among other things to avoid possible regional power cutoffs, especially in very difficult weather conditions. The network breakdown in Szczecin in 2008 showed that the costs of undelivered power are several dozen times higher than its market cost. Power supply continuity has measurable economic importance.

To carry out these plans, the right conditions have to be in place. The greatest obstacle is obtaining real estate easement from thousands of owners of plots across which the planned lines will run. To this we need to add agreements related to obtaining permits at the administrative and ministerial level. Legal changes are essential with regard to the issue of land purchases and real estate easement under existing facilities as well as centrally fixed compensation to eliminate speculation in real estate earmarked for new power transmission lines.
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