HOT|COOL NO. 3/2019 - "Big Markets: China and Poland

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FOCUS BIG MARKETS: CHINA & POLAND

By Andrzej Rubczynski, Heating Strategy Director, Forum Energii

Polish heating has been on the threshold of great changes. The years of maintaining the technological and fuel status quo are slowly becoming a thing of the past. Fundamental factors such as the need to protect the environment and climate, the deteriorating fuel balance of the country and technological progress will force modernization investments on an unprecedented scale in the next decade. The transformation of the Polish heating sector is necessary if we want to ensure thermal comfort at reasonable costs and in an environmentally friendly manner.

POLISH HEATING First of all, let us define what we mean by "Polish heating". It is a sector consisting of three basic groups: • buildings heated individually, • small district heating (DH) systems without cogeneration (CHP) supplied from coal-fired boilers, • large district heating (DH) systems with a dominant share of coal-based cogeneration (CHP) units. For the sake of clarity, it should be added that there is still a fourth group of industrial heat plants, but they operate in a different (business) reality, so they are not the issue of this article. Heating is responsible for 1/3 of the total final energy consumption in Poland. It is one of the most important energy sectors. Out of 6.1 million buildings, about 650 thousand are buildings supplied from DH systems. The remaining buildings are heated by individual sources. Figure 1 shows the structure of fuels in the area of individually heated buildings and DH systems.

As can be observed, the dominant fuel in the DH system is coal, which reaches the level of 75 %. This is an average value. In small heating systems, the share of coal reaches 90 %, which is, as can be easily assumed, a source of concerns for the management of these companies. The heat from individual gas sources is slowly becoming cheaper than the heat from the DH systems, which may result in disconnection of customers from the network and gradual shrinking of the heating market. In the case of large DH systems in the major Polish cities, the situation looks better. Although coal still dominates, it is used in cogeneration units. Thanks to the high utilisation of the installed capacity (CF=4100 hours/year), the combined heat and power (CHP) plants achieve good profitability and have the capital needed for further modernisation. The share of electricity from CHP in the national energy production is about 16 %, which places Poland well above the EU average (11 %). THREE CORNERSTONES OF CHANGE Why will the Polish district and individual heating system have to be thoroughly modernized? 1. Poor air quality and the impact of heating on the climate The most significant problem is the emission of pollutants generated by 3.5 million houses heated with various qualities of solid fuels. Historical negligence and lack (until recently) of any policy towards this segment of heating producers made our country the European leader in terms of the number of days with exceeded pollution limits. Growing social awareness has forced politicians to take an effective and quick action. The Clean Air Programme adopted by the government in 2018 is designed to eliminate 3 million coal-fired furnaces and replace them with low-emission sources within a decade. It is also assumed that this will result in an 80 % reduction in CO2 emissions by 2029 in the group of individual households.

Figure 1. Structure of energy consumption in individually heated buildings and district heating (DH) in %.

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