The Unlikely Green Love Affair Between China and Poland
WHY YOU SHOULD CARE
As climate change talks kick off in Poland, we look at how Beijing and Warsaw, already coal buddies, are enjoying a budding romance over renewable energy too.
By Sophia Akram
When the U.N.’s annual climate change conference, the COP24, opens today in coal-addicted Poland, the host nation — a choice criticized by many activists — will be in a position to reel off a list of steps it’s taking on clean energy. Under a national action plan unveiled in October, Warsaw has committed to slashing its dependence on coal from 78 percent today to 50 percent of its energy needs by 2040. It held solar power auctions just last week, and it wants to turn to nuclear energy. But behind many of these initiatives lies an unlikely partner: China.
Poland is Europe’s second-largest coal exporter and the ninth largest overall in the world. China is the world’s most ravenous importer of coal. But it’s clean energy that is catalyzing their latest embrace, at a time when Poland’s relations with the European Union are strained after an EU court in October ordered Poland to reinstate several judges the country had dismissed.
In 2014, the China-CEE Fund — backed by China’s Exim Bank — made the first move, investing $400 million in a 250-megawatt wind energy project in Poland. Also in 2014, the fund announced it would invest $77 million in Polenergia, formed from a merger between an investment firm and a wind farm group. Earlier this year, it rebuffed an offer for its stakes in Polenergia, stating it was invested in Poland for the long run.
[China’s war on air pollution has] redefined what is possible in terms of improving air quality.
Lauri Myllyvirta, Greenpeace
Last year, the China General Nuclear Power Group entered into talks with Warsaw to build Poland’s first nuclear power plant. Poland plans to build two nuclear power plants with a total capacity of 6 million kilowatts, and the two countries have signed a pact on nuclear cooperation for civil use. And last week, Chinese firm ReneSola won solar auction bids to 26 utility projects of 1 MW each, under Poland’s Contract for Difference regime that facilitates private contracts between a low-carbon electricity generator and the low-carbon contracts company.
On the surface, this courtship between China and Poland over clean energy may appear odd. But look deeper and the gains for both are clear. While still heavily dependent on coal, China today also boasts the world’s fastest-growing renewable energy sector. Its manufacturing prowess has helped drive down global costs of solar panels, in particular, contributing significantly to “emissions reductions globally,” says Lauri Myllyvirta, a senior coal analyst at Greenpeace. As China increasingly invests in clean energy overseas, Poland stands out as a good option. China’s projects there could prove profitable because of generous EU subsidies for clean energy initiatives, says John (Yianni) Nikolaou, president of the U.S.-based think tank Center for Industrial Development. For Poland, support from a major power is useful while it battles continental tensions. And there’s much it can learn from China, experts say, about how a coal-dependent country can slowly wean itself off the fossil fuel.
China’s war on air pollution over the past five years has “redefined what is possible in terms of improving air quality,” says Myllyvirta.
Replicating China’s definite shift toward clean energy in Poland won’t be easy, a challenge underscored by the country’s choice of an old mining town, Katowice, to host the COP24, which will conclude on December 14. Polish public concern over climate change lags behind EU averages. A 2017 survey by the European Commission found that while 60 percent saw it as a very serious problem, only 6 percent viewed it as the single most serious problem facing the world, half of the European bloc’s average. And only 30 percent have taken any personal action by way of tackling climate change. Ahead of COP24, Poland’s own energy minister Krzysztof Tchórzewski defended the coal sector and its contribution to electricity generation, suggesting resistance to change from some in the government.
The government’s commitment to clean energy has been suspect for a while, suggests Warsaw-based energy and environment consultant Michał Koczalski. Apart from a brief period in 2005–06, when the then government attempted to introduce a concept of “green certificates” to encourage renewable energy, Poland hasn’t really had a progressive government-led agenda on the issue, he says. The 2040 policy may look promising, “but the way decisions have been made and [given] the financial capability of Poland … you already know it’s impossible,” says Koczalski. China, too, is hedging its bets — it is also a major investor in Poland’s coal industry.
And Poland may have missed an opportunity on wind energy, experts say, when it passed a stringent law two years ago stipulating the height at which turbines can be placed and hiked the tax on wind farms. The 2040 document suggests that Poland is phasing out onshore wind energy production.
(The above is an aerial view of a coal mine in Kleszczow, Poland. Credit: Woitekk)
But Poland is showing signs that it’s learning from past mistakes. This year, the two-year-old law that hurt the wind energy industry was reversed. For Poland to invest in onshore wind energy makes sense, say experts. “The fact is Poland has massive wind energy potential, and onshore wind is now the cheapest form of power generation,” says Andrew Canning of Brussels-based WindEurope, a body that promotes wind power in Europe. “It really makes sense to make the most of this opportunity.” China also has signaled an appetite in this area, having invested in a wind farm in Croatia.
For too long, Polish governments followed the mantra that keeping consumer prices and taxes low while having a secure supply of energy was the way to go, according to Nikolaou. But the EU in August lifted trade controls on imported Chinese solar technology, opening the door to “cheap” solar construction in Poland, he says. For sure, the country has other non-coal energy options too. It could turn to liquefied natural gas imports from allies like the U.S. Other countries might invest in Poland’s clean energy sector as well. But if they do, they’ll be playing catch-up: China has taken pole position.
- Sophia Akram, OZY Author Contact Sophia Akram