No coal and high prices
PGG has just cut short the work of its online store. Until now, he served customers five days a week, now only two. The store has … nothing to exchange. Already in the spring, due to fears about the consequences of the war in Ukraine, coal was purchased from warehouses. After the closure of the European market to imports from the East under sanctions, the warehouses are empty. Some people sign up for queue lists. As a result, coal, which a year ago cost just over PLN 1,000 per tonne, is now valued at over PLN 3,000. zloty. Beneficiaries pay because they fear it will be even more expensive in the fall. After all, we annually imported 8 million tons of coal from Russia, and there were also years when the import was almost twice as much. It seems that the coal substitute from Colombia or Australia will be much more expensive. If he has time to call at Polish ports before winter.
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According to data from the Central Statistical Office of Poland (GUS), the so-called district heating remains the most important method of heating Polish homes. 40 percent of the country’s inhabitants live in apartments and houses heated by local heating plants and CHP plants. Hard coal, much less often lignite, is the basic heating fuel for both.
Another 36.5 percent. The Poles heat their homes with coal boilers. In total, more than three quarters of apartments and houses are kept warm in winter by burning coal. In the next heating season, which will start in four months, we will have a choice: either pay absurdly high prices for heating, or lower the temperature in the homes and spend long winter evenings under a blanket, in fleece and warm woolen socks.
Go up, go up. Will heating be a luxury for the rich?
Until now, PGG had long-term contracts with thermal power plants made during the pandemic, when coal prices were subdued. Now, referring to the new law on mining support adopted before the end of last year, which only this year guarantees PGG 6 billion PLN of public funding, the company terminates the long-term contracts and replaces them with contracts with new price indices. In offers for new contracts, instead of the current prices of 13 PLN per GJ of energy supplied in coal, PGG expects around 30 PLN. This is a 230% increase.
Retail prices increase even more. A ton of popular coal such as eco-pea coal, i.e. good quality fine coal suitable for modern coal-fired boilers, has gone over the year from just over a thousand more than 3 thousand. zloty.
To heat an average insulated single-family house with an area of 150 square meters, about 3.5 tons of coal are needed per season. A house well insulated from heat, but there are relatively few such houses in Poland, which are heated with solid fuels and consume about 2.5 tons. A house of the same area, but without a layer of insulation, to keep the temperature around 22 degrees Celsius, will consume up to 6 tons of fuel during the season. If current prices persist, the next heating season will cost the owners of these houses not a few as before, but even several thousand zlotys.
Network heating bills will also increase. Most local boiler rooms are covered by the ETS, i.e. the EU Emissions Trading System, which increases the costs of heat production (only small boiler rooms are exempt from Royalties). Local authorities and owners of boiler rooms are already trying to switch to natural gas, which emits less CO2 during combustion, thanks to which emission penalties are lower. The problem is that the price of gas on the stock exchange was even higher than that of coal.
And yet, the reform of the ETS is looming on the horizon. In three years, all buildings in the EU will be covered by a separate emissions trading system, ETS2. This means that the cost of CO2 emissions will be added to the price of coal or gas. The report “How the European Green Deal will affect household budgets” by the Przyjazny Kraj Foundation shows that coal heating costs after the introduction of the ETS will even double. Although the report was created before the drastic increases in coal prices in recent months and today, the impact of ETS 2 on costs would be lower in percentage terms, it will still be significant.
In this situation, the only solution that will allow you to effectively protect yourself against high heating bills or freezing in an underheated house or apartment is renewable energy. More precisely, a heat pump coupled to a vast photovoltaic installation. With rising coal and gas prices, the payback period for such an investment (about PLN 40-50,000 for an average-sized single-family house) is significantly shortened.
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