Six energy companies have told the Energy Regulatory Office (URE) that they lack adequate supplies of coal ahead of peak use in the winter. Reserves of hard coal have shrunk and global demand has increased amid economic rebound from the pandemic.
“We have six reports of insufficient stocks,” said Agnieszka Głośniewska, a spokeswoman for URE, a state agency, on Thursday. The office did not specify which firms had put forward the notifications.
But the Rzeczpospolita daily notes that reserves of hard coal at the state-owned Polska Grupa Energetyczna (PGE), which is the country’s largest generator of electricity, are much smaller than last year.
At the start of October, a large coking coal producer, Jastrzębska Spółka Węglowa (JSW), said it was not able to meet market demand.
The company’s deputy president, Robert Ostrowski, said coal had become a “rare and sought-after commodity”, and that the company was “not able to cover” both domestic and foreign demand for its product, reports the Polish Press Agency (PAP).
Poland, which is a major coal producer, has seen its output gradually shrink as the country begins to phase out the fossil fuel, which still accounts for around 70% of its energy mix, by far the higher proportion in the EU.
Poland’s largest producers, such as the Polish Mining Group (PGG), have been selling off their reserves. Stockpiles of coal – which grew to a peak of 8 million tonnes as a result of the pandemic last year – halved to 4.4 million tonnes in August, according to data from Poland’s Industrial Development Agency.
Poland currently relies on coal for around 70% of its electricity production, by far the highest proportion in the EU.
Its government has previously committed to reducing that figure to 11-28% by 2040 https://t.co/AnKHNcmeF8
— Notes from Poland 🇵🇱 (@notesfrompoland) November 4, 2021
This leaves Polish coal-fired electricity generators in a squeeze, as global coal prices soared to an all-time high in October and have since remained at more than double last year’s price.
The government has previously insisted that state-owned energy firms should support the domestic mining industry rather than import cheaper coal. Elevated demand has prompted Polish coal producers, such as PGG, to seek renegotiations of their long-term contracts with energy companies.
Yet this year’s shortage could cause Poland to import more coal and gas from Russia, according to experts cited by Money.pl, a financial news service. Russia currently provides Poland with most of its coal imports (3.9 million tonnes), followed by Australia (1.4 million tonnes).
Main image credit: Fotopolska.eu/Wikimedia Commons (under CC BY-SA 2.0)
Maria Wilczek is deputy editor of Notes from Poland. She is a regular writer for The Times, The Economist and Al Jazeera English, and has also featured in Foreign Policy, Politico Europe, The Spectator and Gazeta Wyborcza.
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