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


A natural step should be (and probably will be) to move away from coal in heating. First of all in individual households, and then in DH. It seems that Poland's growing dependence on fuels may soon be a very strong stimulus for the transformation of heating. Figure 2 (orange line) illustrates what the demand for coal in the power and heating sectors may look like if appropriate programs are implemented to modernize the heating sector and improve the energy efficiency of buildings (assuming that the power sector does not change its consumption). 3. Technical progress There is no need to describe this phenomenon to Hot Cool readers. Increasingly efficient RES technologies, intelligent heating systems, ICT technologies for managing energy consumption in buildings and increasing energy efficiency in buildings will make traditional heating sources no longer competitive. This phenomenon is beginning to be noticed in Poland, which results in the implementation of a number of support programmes allowing to increase the use of RES energy in heating. DIRECTIONS FOR CHANGE Currently in Poland (August 2019) there is a discussion on the shape of the energy policy until 2040 and the strategy for heating. The results will probably be announced at the beginning of 2020. Based on the analysis carried out by the Forum Energii, it can be said that the heating transition in the long-term perspective is more cost-effective for the whole society. Initial intensive investment expenditures (CAPEX) bring benefits in terms of decreasing variable costs (OPEX) and lower external costs (Fig. 3) at a later stage.

This is a very ambitious plan and also an opportunity to develop DH systems, which are considered to be one of the best tools to fight against smog. The consequence of climate and environmental threats is legislation that is becoming more rigorous. This is another fundamental driving force for change. The current fuel structure in the heating sector results in higher and higher costs of meeting the requirements of the MCP, IED-BREF and NEC directives. Additionally, the heating sector has to bear an even higher cost of the CO2 emission allowances, which translates into a loss of market competitiveness. Without changing the technological mix and increasing the share of energy from renewable energy sources (RES), many enterprises, especially small ones, may fall into the so-called death spiral. Customers will disconnect themselves from the network looking for alternative, cheaper solutions. Fixed costs will be passed on to fewer and fewer users, which will increase their heat expenditure and encourage them to disconnect from the grid. And that is until the last group of customers cancels the contract for purchase of heat. This is a major challenge for many small heating systems. Nowadays in Poland there are serious analyses and searching for optimal solutions and support mechanisms. 2. National fuel balance The second fundamental reason that will force transition towards a low-carbon economy is the steadily declining hard coal production in Poland due to more and more difficult geological conditions. Many experts predict that over the next decade, production may fall by a further 40 % (vs. 2018). Currently, Poland uses approximately 24 million tonnes of hard coal, both in district and non-district heating systems. This is 7 million tonnes less than the power plants need to produce electricity (sic!). If nothing is done, the level of imbalance between domestic supply and demand of hard coal will increase and so will the imports (Fig. 2).

Figure 2. Hard coal consumption by power and heating sector vs domestic production (million tonnes/year).

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