Challenges and Opportunities in Coal Development in CEE Countries

1. Plans for new coal development in Poland and other CEE countries Kuba Gogolewski / CEE Bankwatch Network Energy Campaigner l'Assemblée Nationale/Paris, France 2 October 2013

2. Content 1. Investment in energy infrastructure needed in the UE-28 2.New coal power plants planned in Poland 3. Situation in other countries of Central and Eastern Europe and the Balkans www.bankwatch.org

3. Who we are and what we do? www.bankwatch.org CEE Bankwatch Network is an international NGO with member organisations currently from 13 countries across the CEE, the Balkans and CIS region. Its mission is to prevent the environmentally and socially harmful impacts of international financial institutions and EU funding, and to promote alternative solutions and public participation.

4. Europe’s Energy Import Dependency • A high proportion of the fossil fuels used in the EU27 in 2010 were imported from outside the EU: 53.8 % of its total gross inland energy consumption • Net import accounted for 91 % of oil , 62 % of gas and 39 % of solid fuels gross inland consumptions. • The EU’s dependence on imports of fossil fuels (gas, solid fuels and oil) from non-EU has remained relatively stable 2005 -2010. • In 2011 net imports of fossil fuels to the EU amounted to EUR 388 billion, more than 3% of EU GDP (2010:EUR 355 billion) • EU’s trade balance deficit 2011: EUR 185 billion Source: DG Energy / Eurostat (May 2011); EEA 2013 (ENER026)

5. Europe’s Energy Infrastructure • Europe’s energy system is outdated • Substantial investments in power production capacity, infrastructure, buildings and transportation within the next decade. • These investment decisions will shape the structure of the energy system until 2050 and beyond. IEA 2012: “Our 450 Scenario (…) finds that almost four-fifths of the CO2 emissions allowable by 2035 are already locked-in by existing power plants, factories, buildings, etc. If stringent new action is not forthcoming by 2017, the energy-related infrastructure then in place will generate all the CO2 emissions allowed up to 2035, leaving no room for additional power plants, factories and other infrastructure unless they are zero-carbon.” Source: DG Energy / Eurostat (May 2011)

6. “Progress towards clean energy has stalled”, IEA says* • *IEA April 2013: • ”despite a boom in renewable energy over the last decade, the average unit of energy produced today is basically as dirty as it was 20 years ago” • “We need a rapid expansion in low-carbon energy technologies if we are to avoid a potentially catastrophic warming of the planet, but we must also accelerate the shift away from dirtier fossil fuels.” • Coal use expanded particularly in Europe where coal’s share of the power generation mix increased at the expense of natural gas. • True cost of energy must be reflected in consumer prices, through carbon pricing and the phase-out of fossil-fuel subsidies. IEA 2013; Tracking Clean Energy Progress

7. How does it look in Poland? In 2009 the Polish government has adopted the Polish Energy Policy until 2030 which is to be revised this year. It foresees that in 2030 74% of energy will come from CO2 intensive energy sources! Energy companies with the biggest market share are either 100% state owned – PGNiG, GasSystem S.A. or are in effective control of the Ministry of Treasury (PGE, ENEA, ENERGA,Tauron). For the two biggest capital groups it is to stay so (PEP2030). The same is true for the mining sector: JSW, Kompania Węglowa and KHW. Privatisation plans are postponed if energy projects get in the way (ENEA’s case). In 2011 there were plans for over 11 GW of new coal generation capacity which due to the crisis now (10.2013) oscillate around 7,2 GW with all the foreign investors expect GdF Suez (planning a new greenfield 500MWe hard-coal plant in south-east Poland) having frozen or shelved their investments in new coal capacity

8. Coal’s health bill reaches €43 billion a year* Annual health costs associated with coal power generation per country in millions of euros (2009 data) • Air pollution from burning fossil fuels blamed for premature deaths and illnesses • Moving away from fossil fuels would boost health by significantly reducing chronic lung disease and some heart conditions • Recent upturn in the use of coal makes awareness of health costs more urgent HEAL 2013; ‘The unpaid health bill: How coal power plants make us sick

9. Not only is new coal planned but the old coal wants to stay • Two thirds of the installed coal capacity in Poland is older than 30 years • The recently published report by the Polish Ministry of Economy warns of the security of supply threat due to the necessity to retire old coal units from the Polish energy system at the end of 2015 (IED requirements). • The analysis states that approx. 95 MW of power may be missing from the energy system in 2015, 800 MW in 2016 and 1100 MW in 2017. • The peak uncovered summer demand in 2016 may reach approximately 520 MW to reach 680 MW in 2017. • Meanwhile all the new big coal investments apart from the 1000 MWe unit in Kozienice will be operational at the earliest at the end of 2018.

10. Croatia, Czech Republic, Kosovo, Romania, Serbia, • 8 new coal power plants planned in Romania with a combined capacity of 4, 15 GW (2,05 GW hard coal and 2,1 GW lignite) • 2 new power plants in Czech Republic of 1,95GW (hard coal Mostecka 1,2GW, lignite Prunerov 0,75 GW) • Croatia – Plomin C (0,5 GW) • 4 lignite power plants in Serbia (Kolubara B, Stavalj, Kostolac, Nicola Tesla B) of 2,71GW • Kosovo – Kosovo C – 0,5 GW lignite • In total 6,6 GW in the EU-28 CEE Member States • A new coal rush in the Balkans Insalnita lignite power plant Romania, 2013

11. Kuba Gogolewski kuba.gogolewski@bankwatch.org CEE Bankwatch Network Ul. Raszyńska 32/44 lok .140 02-026 Warszawa Thank you for your attention! www.bankwatch.org