PEP 2040 update – a key strategic document that defines the directions of energy development
This update of the previous version of PEP 2040 (Poland’s Energy Policy), highlights 2 key messages to the players in the energy industry: a rapid development of RES, especially PV, which will, however, slow down when nuclear power emerges. The transition costs were calculated at PLN 1.2 trillion. Listen to the conversation between Krzysztof Horodko, Managing Partner at Baker Tilly TPA and Maciej Krokosinski, Partner at Baker Tilly TPA, where they discuss the PEP 2040 update.
As we are heading towards zero-emission economy, the role of RES is critical in the next two decades. According to the draft of the Ministry of Climate and Environment, energy production in 2030 is expected to reach 199.9 TWh (in 2022 it was 173.5 TWh). Until that point in time, RESs alone are expected to cover 46.6% of energy needs. This is a big increase when compared 17.4% in 2022. In the target year 2040, PEP 2040 estimates total electricity demand at the level of 244 TWh (173.5 TWh currently) with RES responsible for the production of about 123 TWh, with the share of 50.8%.
“This will give a level of 6,5 GW per million inhabitants – a level of electricity consumption currently achieved in Germany,” commented Krzysztof Horodko.
According to his analysis, the expansion of RES will impact the share of particular RES sector in the energy production mix. Wind farms, which by 2030 are expected to produce 34.4 TWh, will be responsible for 17.2% of annual electricity demand. This represents around 90% increase in energy production when compared to 2022 (18.2 TWh).
In 2040, the electricity production from onshore wind farms is not expected to change significantly, mostly as a result of limitations imposed by 10H Act, even despite currently introduced liberalizations in form of minimum distance of 700 meters. It will be at the level of 34.1 TWh with its share in meeting the annual electricity demand at the level of 14%. Offshore wind farms, according to amended PEP 2040 will be responsible for total energy production amounting to 10.7% in 2030 and 18% in 2040. In quantity terms it will amount to 21,6 TWh (1st phase) and 43,7 TWh (2nd phase).
Photovoltaic sources are expected to produce 25.1 TWh in 2030 and 29TWh in 2040, while biomass and biogas will be responsible for the annual generation of 14.3 TWh which should account for approx. 5.8% of total electricity production.
According to updated PEP 2040, as a result of the energy transition, the level of RES power in 2030 may reach 57%, and in 2040 it will account for about 74% in the structure of power. The CAPEX required to make this shift will amount 440 billion PLN.
“The largest increase in power is expected in solar power plants,” said Krzysztof Horodko. The PV sector is expected to see the greatest increase in power by 27 GW, with CAPEX estimated at PLN 106.4 billion. In the case of offshore RES it will be PLN 221.2 billion (increase by 11 GW from current 0 GW), while for onshore wind farms expected CAPEX amounts to nearly PLN 71.4 billion (increase from 8.3GW currently to 14GW in 2030, to remain at the stable level until 2040). Outlays for new energy storage and pumped storage power plants are expected to amount to more than PLN 57 billion, with the cost of biomass and biogas power plants around PLN 33.4 billion.
“To sum up the update PEP 2040 it is worth mentioning that it reflected the strength of RES as a key driver of the shift to a net zero emission economy. The document also recognized the ambitions of various RES developers and investors operating in the Polish market,” concluded Krzysztof Horodko.
