The transmission system operator complains that the boom in PV panels in Poland threatens the stability of the power grid. However, prosumers are installing them by the dozen, because they want to protect themselves against the hikes in energy prices that may reach over 10 percent. Perhaps a compromise solution would be to subsidize energy storage that would stabilize PVs? – writes Wojciech Jakóbik, editor-in-chief BiznesAlert.pl.
The photovoltaic revolution continues
At the end of July 2021, the installed capacity of solar energy in Poland reached 5.6 GW, according to the Agencja Rynku Energii think tank. In July almost 31 thousand new PV installations were added to the system, which is an almost 100 percent increase in new renewable energy sources in our country. Onshore wind farms could be one of the alternatives, but this sector cannot develop because of the distance law, which is still waiting to be liberalized.
The new renewable sources may help to achieve the 31 percent EU target for Poland in 2030, and to increase energy supply in a situation where conventional energy is increasingly unreliable due to the advanced age of coal-fired power units, whose life span will end around 2025. Meanwhile Poles want to achieve the RES share target of 15 percent in 2021, although they had until 2020 to do so. However, in fact the surge in new PV installations results from the fact that households as well as companies want to cushion themselves from the hikes in power prices in the coming years, and from the news that energy companies will apply to the Energy Regulatory Office for an approval to increase the electricity prices by several percent. It has been speculated that the prices may surge by 40 percent, but that guess is probably way off the mark, as it doesn’t take into account the inevitable political pressure on the state-owned companies that generate power.
“Poles have fallen in love with generating energy for their own needs, and this generation contributes, as I said at the beginning, to improving the energy mix in Poland. It also gives rise to some problems and this is one of the reasons behind this amendment proposal, which I would like to discuss at this moment,” said Jadwiga Emilewicz, former Minister of Development, on July 20 in the Polish Sejm, when presenting a parliamentary bill on this issue. “What is the purpose of the proposed changes? Firstly, we would like, and this is my intention, to introduce some modification into the existing system of support for the presumption of individual recipients, because after almost 2 years, we have identified some shortcomings, problems in how the system operates, ” she explained.
“The parliamentary bill introduces a 1:1 system of settlements for prosumers throughout the year. The Ministry of Climate and the Environment accepts this solution as a transitional one, and proposes that it be valid until 31 December 2023. This is linked to the mandatory entry into force of the market directive. This is a Directive of the European Parliament and of the Council, no. 2019/944, which in article 1, point 4 requires the implementation in the above deadline of a separate system to settle the energy fed into and received from the electricity grid,” said Deputy Minister of Climate and Environment Ireneusz Zyska in response to Emilewicz’s demands. “Therefore, the Minister of Climate and Environment proposes to include in the draft law a solution consisting in the implementation of a new system of prosumer settlements in accordance with the market directive, known as net-billing, from 1 January 2024. It is based on separate billing of the energy input into the distribution network and the energy input from the electricity grid, based on the value of a unit of energy fixed at the quoted market price, the current price, and now you can even say the hourly price,” the deputy minister explained.
The prospect of lowering energy bills has convinced Poles to invest in photovoltaic panels, and the solutions presented above serve this purpose. However, other stakeholders have a different point of view.
The solar counterrevolution
The transmission operator, supervised by the minister, is concerned about safety. There is a conflict of interest between these priorities.
“If I were to say in general what I think about this parliamentary project, it comes down to the fact that if it were to be introduced in the form it is at the moment, it would be a source of great problems for the National Power System and for the distribution systems. This is my first point, ” Piotr Naimski, the Government Plenipotentiary for Strategic Energy Infrastructure, replied to Jadwiga Emilewicz. “It is worth saying that the electricity system here is treated physically as a virtual warehouse. In other words, the energy produced by prosumers is stored in networks. The capacity of the network is limited. It’s not a bottomless pit. You can’t stretch it too far. I can tell you what the outcome will be. This will result in the need to deny or limit connections. If the high chamber at the Sejm and the Senate, decides that this should be mandatory, then the national power manager will have to limit the energy production in these units, which means they will have to get paid for this. The fee that will be associated with this will be paid by all other users of the electricity system. It’s worth considering, because that’s what this system looks like. Having said that, it seems to me that it is worth considering this whole project from this side, from the context of developing the prosumer electric power industry. If we consider it in this way, it will turn out that it requires very significant modifications, ” he warned.
Tomasz Sikowski represented Polskie Sieci Elektroenergetyczne, the transmission grid operator, in the debate and spoke about the challenges posed by PVs. “After exceeding a certain level of installed capacity in photovoltaic sources, negative side effects appear. This applies both to the operation of the system and to the operation of conventional power plants, which are still needed to meet the demand and will continue to be. As far as the electricity system is concerned, we are in the process of achieving this level. At the moment, photovoltaics are helping us a lot with the demand that we have, but if they continue to grow at this rate, we will reach the limit of absorbing energy from energy sources, which will result in what minister Naimski was talking about: we will have to reduce renewables. This is not in the interest of national consumers, as there will be sources of generation that have benefited from substantial support schemes, and these sources will not produce energy. In such circumstances, further development of renewable sources must be based on economic considerations reflecting the benefits and technical conditions of the operation of these sources in the system,” Sikorski said.
He also argued that photovoltaics should now be developed on market-based rules, and that the discount system that causes a spike in demand should be abandoned. “For this reason, such stimulation is a very dangerous stimulation, as it can lead to energy deficits,” he stated. He also criticized the idea of a virtual prosumer. “This type of solution is completely inadequate for the functioning of the electricity market for the simple reason that it interferes with the mechanism of concluding commercial transactions on the electricity market,” he said in the Sejm. He also opposed the exemption from distribution fees. “In our opinion, this is unacceptable, because it violates the rights and interests of those recipients who are not prosumers. This simply leads to subsidies, ” he added. “The bill needs to be updated in the areas I mentioned, plus a few smaller ones. These changes are necessary so that the new regulations create the conditions for the development of renewable energy prosumers that take into account the interests of all consumers. On the other hand, I wanted to emphasize that the implementation of this amendment is urgent, because the current system already has a flaw and can no longer be continued, because it will create the same problems as the proposed amendment, ” Sikorski concluded.
“While appreciating all the challenges associated with the technical difficulties, with the distribution of energy, it seems that this project mitigates risks and limitations, democratizes, as I said, and above all gives the opportunity to supply and receive cheap and clean electricity in a way that is not overcapacited and where it is needed,” Emilewicz answered.
Compromise to facilitate energy security?
We are therefore faced with a classic dispute over the two tips of the energy security triangle. Those are: safety, affordable price and environment. Minister Naimski focuses on the security, while Minister Emilewicz focuses on the price. It is worth reconciling these two points of view.
One solution would be to link support for photovoltaics with the obligation and support for energy storage to stabilize such sources. Such a solution would mean doubling the cost of support, because a PV installation can cost PLN 15-50 thousand and the cheapest energy storage costs roughly the same. However, it may also be worth investing in a stable development of sources that provide the energy price reductions needed by households and companies in Poland.
The basic conditions are sound investments in PVs that will not be overcapacitated and badly adapted to the capacity of the system. On the other hand, further investments are needed to expand the distribution system, which has not prepared for the renewable revolution yet, as Katarzyna Szwed-Lipińska, head of the Renewable Sources Department at the Energy Regulatory Office, stated at the European Economic Congress in Katowice. The Poles missed this revolution and now have to catch up in a way that ensures complete energy security, according to the three tips of the triangle in its definition.
Work is under way on the fourth increase of the budget of the Mój Prąd program. The National Fund for Environmental Protection and Water Management is again increasing the pool, allowing to subsidize more than 20 thousand installations currently on waiting lists. Poles are investing in the sun, and the war between politicians over how to respond to this need should end with a constructive solution. This revolution can no longer be overlooked, we have to learn to live with it.