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PEP2040: Progress or disappointment?
Poland could double renewables ambition and halve gas expansion in its upcoming PEP2040 energy strategy.
Available in: Polski
About
A revision of the Polish energy strategy to 2040 (PEP2040) was announced in March 2022, predominantly to address energy security concerns. In this report, Ember and Reform Institute analyse the government’s draft plans for renewable energy expansion, showing that the PEP2040 assumptions are significantly under-ambitious. The low share of renewables puts Poland on a path to being the last EU economy producing the majority of its power from fossil fuels by 2030, endangering the country’s security and prosperity.
Authors: Dr Paweł Czyżak, Aleksander Śniegocki, Zofia Wetmańska
Executive summary
Will Poland take the opportunity to step up its renewables targets?
The Polish government has a chance to set new, ambitious targets following a disappointing energy strategy launched in 2021. Will it seize the opportunity?
Aleksander Śniegocki CEO, Reform Institute
Rapidly increasing renewable electricity production in Poland is the only way out of the fossil fuel crisis. Without a strong push to remove formal and infrastructural barriers to wind and solar investments, we will be locked in futile debates on which fossil fuel is less harmful for Polish competitiveness and security.

Poland's new energy strategy
Poland's current plans put it at risk of being the last EU economy based on fossil fuels
At the same time, reverting to production from coal power plants will not solve the energy dependence issue. The domestic hard coal mining continues its long-term decline (3.9% drop in production in 2022 despite record prices) and sees a sharp increase in its production costs (nearly tripling in 2021-2023 for the largest mining company, PGG), which will further deteriorate its competitiveness against imports in the coming years. In this situation, the continued utilisation of fossil fuel plants is a key security concern, and renewables are the only option to reduce import dependence and ensure stable economic growth in the coming years.
While some combination of coal and gas capacities will be necessary to balance the system in the coming years, renewables can help minimise how much of those fuels is actually burned. As shown by a recent modelling study, Poland could balance its power system with 29 TWh of gas generation in 2030, half of the 53 TWh assumed in the PEP2040, while also limiting the share of coal electricity to 12%. Thus, while policy debates are in Poland have focused on which fossil technology to choose in the short term to ensure sufficient dispatchable capacities in the system, the key priority for the Polish Energy Policy should be to ensure rapid renewables expansion so that the actual fuel use in these plants decreases rapidly.
The planned gas fleet expansion will have dire consequences for electricity consumers. Over 10 GW of gas plant projects are currently under discussion, with 4-5 GW already having secured capacity contracts. With the record-high capacity market prices in 2021 and 2022, these projects will cost billions in taxpayer money, while producing very expensive electricity. This will result in power price increases by 2-4 times compared to 2021 (depending on gas TTF prices varying between 50-100 EUR/MWh), and will negatively impact the competitiveness of Poland’s economy.
Conclusion
Poland needs a more ambitious energy strategy
Targets for renewables expansion in the upcoming PEP2040 could be doubled with gas electricity generation halved, increasing energy security and the competitiveness of Poland’s economy.
Poland’s energy strategy was widely criticised for being outdated and unambitious at the time when it was published. An update is coming, giving the government a unique opportunity to step up renewables ambition and withdraw from risky gas expansion plans, answering the pan-EU call to reduce fossil fuel dependency.
Studies show that by 2030 Poland could aim for over 50 GW of renewables capacity and a 50%+ share of RES in power generation. By 2040, Poland could aim for 100 GW of renewables, tripling the current PEP2040 target and doubling what was announced for the upcoming update. With most of Europe’s power sector set to become 100% clean in the 2030s, it is in Poland’s interest to decarbonize as quickly as possible to avoid the negative economic and security implications of being left behind.
Supporting Material
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Methodology
Recent trends in renewable energy deployment
Since 2018 Poland has been experiencing a solar energy boom – from 1.5 GW in 2019, the capacity increased to 4 GW in 2020 and 12 GW in 2022, noticing additions of 2.5 – 5 GW yearly. The 10 GW milestone was met mid-2022, doubling the 2030 goal from the current PEP2040.
While a 3-4 GW/year PV increase might be difficult to sustain due to grid connection issues, even keeping a modest 2 GW/year pace would mean reaching around 30 GW of solar capacity by 2030 and up to 50 GW by 2040.
An increase in ambition is also possible in the onshore wind segment. Due to some of the most restrictive spatial planning rules in Europe, onshore wind capacity additions in Poland slowed down recently after a period of strong growth between 2010 and 2015, when up to 1.2 GW were added per year. Removing the policy restrictions could open up a potential of 15-18 GW in 2030 and over 30 GW of onshore wind capacity by 2040. An amendment to the current onshore law is ready and should be passed by the parliament immediately to ensure energy security, lower prices, and compliance with climate targets.
The area where the Polish government’s ambition does match technical and social potential is offshore wind, with 5.9 GW of projects already underway and expected to be deployed by 2030. Another round of projects is preparing for auctions in 2025. Still, the government estimates that the total offshore wind potential is around 10 GW, while an analysis of the maritime planning documents, wind conditions and sea bed depth shows that over 30 GW of offshore wind could be possible on Polish waters, with up to 18 GW deployed by 2040.
Estimating 2040 renewables capacity in the updated PEP2040
The draft PEP2040 assumptions don’t contain detailed renewables deployment plans, but suggest between 34 and 52 GW of capacity by 2030 and a 50% share of renewables in electricity generation by 2040. Using data from the current PEP2040, as well as the TSO’s latest planning document, we’ve estimated the possible renewables capacity in 2040 under the updated PEP2040 assumptions.
The TSO plan slightly increases net electricity demand forecasts for 2040, from 204 TWh in the PEP2040 to 215-231 TWh depending on the scenario. We’ve combined those demand projects with the maximum 2030 renewables capacity assumption in the draft PEP2040 assumptions: 29.5 GW of solar PV, 12.7 GW of onshore wind, 1.1 GW of hydro and 2.2 GW of bioenergy, as well as the existing offshore wind expansion plan—up to 9.6 GW by 2040. This yields a total renewables capacity of 55 GW in 2040 and a 53-57% renewable share in electricity generation depending on the demand scenario. Alternatively, a pessimistic scenario assumes a much lower 6.9 GW of onshore wind capacity, the same as the current PEP2040, due to the further delays around the loosening of the 10H rule. This results in 49 GW of renewable capacity and a 45-49% renewable share in the power mix depending on the demand scenario.
Summing up, although the expected 2040 renewable capacity was not provided by the government, this would have to be in the range of 50-60 GW to match the 50% renewable share assumption. This would mean almost zero expansion of renewables in the years 2030-2040, a vision hard to justify given EU climate policy, but also economic and security concerns.
Capacity factors for all technologies were derived from the current PEP2040 generation and installed capacity data.
Acknowledgements
Aleksander Śniegocki
Supporting authorZofia Wetmańska