Poland's Ministry of State Assets will present a comprehensive plan for the spin-off of coal assets from state-owned power companies to parliament on February 13, the Prime Minister's office said, reports PAP.

"The draft report of the Minister of State Assets on the process of implementation of the Transformation of the Electricity Sector in Poland covering the period from 1 July 2024 to 31 December 2024. Spin-off of coal-fired generating assets from state-owned companies,” the statement said, cited by PAP.

A dedicated team within the Ministry of State Assets was established in May 2024 to oversee the separation of coal assets from state-owned energy enterprises as part of Poland’s efforts to decarbonise its power generation.

Poland introduced an ambitious energy strategy in November under the National Energy and Climate Plan for 2030-2040 to reduce its reliance on coal and boost green and nuclear power generating capacity. However, analysts remain cautious if the government will have the political will to push the reforms through.

Currently, Poland produces just under a third of its power from renewable sources but hopes to dramatically increase this by 2030. Coal accounted for 60% of power generation in 2024. Under the new plan, the share of coal in its electricity generation will be reduced to 22.5% in 2030, 8.5% in 2035 and close to 1.3% in 2040.

The government is hoping by separating the coal-fired assets out will improve the financial standing of state-owned power companies and improve access to capital for investments in cleaner energy technologies.

Nevertheless, reducing the use of coal comes with political problems, which remains a major employer in Poland.

Much progress has already been made in transforming Poland’s power scene, with a notable shift towards renewable energy sources in recent years.

Traditionally, coal has been the dominant source of electricity in Poland but its share has already fallen from 70.7% of the country's electricity production in 2022 to 60.4% in 2024, according to official estimates.

Coal is steadily being replaced by renewable energy sources that accounted for a record 29% of Poland's electricity generation in 2024. The largest contributors within this segment were wind power, which accounts for 14.6% of the total electricity generated, and solar power, covering another 11%, in 2024. Biomass and hydropower make up another 2.7%.

Installed wind power capacity is growing fast. Poland is already one of leading producers of offshore wind power in Europe after the UK, German and Denmark, with 1.5 GW of generating capacity. However, a €200mn loan for the Baltica 2 project by the European Bank for Reconstruction and Development (EBRD) announced at the start of February will double this capacity and make Poland the fourth biggest producer of offshore wind power in Europe.

In addition, the government has plans to build several nuclear power plants (NPPs) to add to its clean power generation capacity. The first plant will be constructed at Lubiatowo-Kopalino site in the Pomeranian Voivodeship and US firm Westinghouse has already been commissioned in November 2022 to lead-manage the $40bn project. Construction is due to start in 2026; the first unit will go into operation by 2033 and project completion is slated for 2040.

In addition, Poland approved the construction of 24 small modular reactors (SMRs) units across six sites. Orlen Synthos Green Energy, a joint venture between PKN Orlen and Synthos, aims to deploy the country's first SMR by 2030.

The transformation to a green powered economy will take time. Speaking at a conference in Gdansk on February 7, European Commission President Ursula von der Leyen said that while the EU is committed to reaching carbon zero by 2050, the EU will remain dependent on nuclear and gas for a “long time.”

“Reducing energy prices must be the main topic – we are working hard to increase (the share of) low-emission energy, i.e. nuclear energy and renewable energy, because it is produced locally. I am convinced that we will need a base of either nuclear energy or gas for a long time, and also renewable energy sources, because we know that they create good jobs in Europe, provide energy security and reduce prices, and above all make us independent, especially from fossil fuels from Russia," said von der Leyen.