The Role of Clean Generation Technologies in the Energy Transformation in Poland

Abstract

The ongoing transformation of the Polish power sector have been shaped by a number of factors. In this article, both external conditions for the Polish energy market—such as the country’s membership in the European Union—and internal ones—including domestic energy resources and demand for electricity, or the structure of the Polish economy—have been analysed. This study focuses specifically on the issue of development of clean generation technologies as these are fundamental to the energy-transition process. Its determinants have been examined empirically. To this end, econometric models have been developed using sectoral data from the Polish electric power industry. Improvements in technology have been measured as innovation inputs, that is, RD&D investments in environmental technologies. Explanatory variables encompass economic as well as institutional measures: energy price, environmental policy stringency, long-term interest rate, market concentration and protection of intellectual property rights. The findings obtained point to a positive impact of the variables named on the innovative activity in Poland, with the exception of market concentration, which was proven to be statistically insignificant.

1. Introduction

Changes in the natural environment, including increasingly common and hardly predictable threats linked to climate change put not only economic growth but also the existence of our civilisation at risk, according to research conducted in various scientific fields. It is mainly economic activity’s adverse effects, including more and more intensively used fossil energy sources, as well as air pollution due to greenhouse gases, that largely contribute to climate change. Hence, there is an urgent need to diversify away from fossil fuels in favour of zero-emission energy sources—both at the global economy level and in its regional, national and local dimensions.

The objective of the present study and its main contribution to the field of energy economics is to analyse the determinants of the energy transformation in Poland, with a particular focus on the role and the meaning of clean generation technologies for the process, to define the perspectives of the transition to zero-emission economy and to outline a course of action for reaching this goal. The case-study form of the present analysis, showing history, present situation and possible future development paths of one particular economy, will help potential readers understand the usefulness of the empirical findings obtained.

Within the analysis, a few research questions have been posed: What are the energy-transition determinants towards a zero-emission economy in Poland? Which factors stimulate the process of diversifying away from fossil fuels and replacing them with low-carbon fuels? To what extent are these factors different from the ones that shape the same process in the Western economies?

The transformation of the energy-consumption structure, including strengthening of the role of new renewable sources in energy generation in particular, are indispensable to laying the foundations for a zero-carbon economy. Whereas most empirical studies concerning innovations in the energy sector pertain to either Western economies or a broader set of developed countries such as OECD, the present analysis focuses on the case of Polish economy. The experience of this country in the scope of the energy transformation may help other countries with similar circumstances, CEE countries in particular, overcome difficulties accompanying the process and may guide their strategies towards a low-carbon economy.

The pace and direction of the ongoing transformation process of the Polish power sector have been shaped by a number of factors. In this article, both external conditions for the Polish energy market such as the country’s membership in the European Union and internal ones are related, among others, to Poland’s level of economic development, its domestic coal and natural gas resources, its growing energy-import dependency, its energy demand, its experience of functioning under the centralised command and control system of economy management, as well as its attempts at energy transformation.

Furthermore, the role of technological change in the process of transforming the economy and primary energy carrier structures has been elaborated upon. There are numerous factors responsible for shaping the process of innovation development in the field of clean energy technologies. A few out of the most important determinants of clean technology development are considered in more detail within this article, and their influence on the creation of innovation are empirically tested. These encompass economic as well as institutional measures: energy price, environmental policy stringency, long-term interest rate, market concentration and protection of intellectual property rights.

The study focuses specifically on the issue of development of clean generation technologies as these are fundamental for the energy-transition process. Its determinants have been examined empirically. To this end, econometric models have been developed using sectoral data from the Polish electric power industry. Within the present analysis, clean energy development determinants have been reviewed in the light of existing literature. Furthermore, their empirical verification with respect to the Polish economy has been conducted.

1.1. International Context

After forty-five years of functioning under the centralised command and control system of economy management, in 1990, the process of system transformation began, manifesting itself through the creation of market economy structures. It was a large-scale system transformation process of the Polish economy, involving its demonopolisation, deregulation, restructuring and privatisation, as well as a re-establishment of cooperation with the Western economies. In the field of economic cooperation, it was reflected by signing a trade and economic cooperation agreement with the European Economic Community; the Europe Agreement in 1992; and subsequently, the Treaty of Accession on 16 April 2003. At the same time, steps were undertaken to establish political relations within the world economy, aiming to increase security and to safeguard peace in this part of Europe. The result was Poland joining NATO in 1999. These two agreements laid the foundations for a new, market-based economy and stimulated the system-transformation process and further development of the Polish economy at the same time [1,2].

Against the background of the 27 European Union states, Poland’s economic potential is significant. It manifests itself, among others, through the size of its area, amounting to 311.9 thousand km² (sixth place); its population of 37,977 thousand inhabitants (fifth place); its GDP of 496.5 billion Euros (in 2018 current prices) (fifth place); as well as its government debt level of 48.9%, which places Poland among 11 countries with the lowest debt levels [3].

Upon the accession to the EU, Poland made the commitment in terms of compliance with the law of the European Union (acquis communautaire), including energy management, and it incorporated the respective legislation arising from the EU energy policy into national law.

This resulted in changes in the Polish power sector, particularly due to the process of liberalisation of the gas and electricity markets (demonopolisation, deregulation, restructuring and privatisation), as well as actions in favour of strengthening of the energy security and power generation considering the concern for environment and compliance with the energy-climate policy objectives.

In the beginning of the new millennium, growing problems related to climate change in the globalised economy have become a real threat and a global challenge. The solution to the problem is decarbonisation of the economy and a shift towards a low-carbon economy [4,5,6,7]. The EU energy policy has been pursuing the objectives of a reduction in pollution emission, including greenhouse gases; the promotion of renewable energy sources; the enhancement of energy efficiency; as well as the fostering of research and innovation in the energy sector, for a long time. It manifests itself in increasingly rigorous legal and regulatory barriers, aiming at realising the objectives [8]. In light of the treaty provisions [9], EU Member States were able to shape their energy policy on an anticipatory basis, taking their own energy resources into consideration, by choosing between various energy sources and by shaping their energy supply structure. The direction of change towards decarbonisation of the EU’s as well as its Member States’ economies has been subsequently acknowledged by a priority development programme, namely the Green New Deal, and then within the Fit for 55 package. EU framework regulation will exert considerable influence on the situation in the Polish energy sector as well as on the Polish economy in general.

1.2. Overview of Technologies and Energy Transformation History in Poland

Technological innovation plays a major role from the point of view of the transition process in the power sector. It is not an unambiguous term. It can refer to a new product or production process, but on top of this, it can pertain to their implementation and diffusion in broader terms, as well. The same applies to the concept of environmental innovation, understood as a specific kind of innovation, namely the one benefiting the environment [10].

Technological progress is fundamental to the energy-transformation process owing to its capability of reconciling economic growth with economising scarce natural resources. Changing the direction of technical progress towards the development of clean technologies entails overcoming two main sources of market failures: one of them pertaining to environmental externalities and the other to public good nature of innovation [11]. The outcome of the process is thus both pollution abatement itself in the course of economic growth and a reduction in its costs.

Technical change may be autonomous to a certain extent, which is true mainly with regard to initial stages of innovation process. However, for the most part, it is an endogenous process, with its rate and direction influenced by energy market conditions, state policy and expectations of market participants. The factors named shape these processes, such as research and development, and its financing by the government or corporate sector, as well as economy-of-scale effects, with all of them being parts of technological progress [12].

For this reason, it is crucial for the socially optimal design of public policy—the choice of instruments, scope and timing of their implementation—to find the factors influencing market participants’ decisions with respect to their innovative activity.

It can be seen from the historical perspective that the switch to new, more mobile energy sources involved notably new technological possibilities. They enabled reaching for carbon stocks and, subsequently, increasingly less accessible oil and gas reserves, with the increasing energy demand. They also ensured greater convergence between supply and growing demand for primary energy sources. Hence, the past energy transition concerned a surge in demand for and supply of hydrocarbon fuel, a change in the structure of energy carriers used and their adjustment to the consumption level, as well as the structure of demand for energy products [13,14,15,16]. New technological solutions were the factor behind overcoming the challenges related to energy supply and stimulating economic growth.

Modern challenges for the global economy and development of technologies, including those regarding energy management and electricity generation, concern the need for a greater use of renewable and new electricity generation sources to tackle the climate challenge.

The energy transition can be defined in terms of a radical, fundamental and comprehensive socio-economic as well as cultural change. It manifests itself through a retreat from fossil fuels, which are now widely used. It also means a transition of the modern economy towards increasingly greater use of clean fuels and technologies.

New inventions and technologies can contribute to acquiring low-carbon energy sources and intensifying their deployment.

Decarbonisation implies major changes in the field of energy technologies, dependent on decisions of both potential investors and consumers. These are influenced by market conditions such as prices, profits, disposable income, habits, etc. The transformation entails major challenges related to capital availability with respect to the clean energy technologies already known and to those at an experimental stage as well as the costs of phasing out of the fossil fuel industry.

These major and indispensable challenges related to the energy transition can be overcome to a certain extent with the aid of active policy on the part of the state, which has the ability to trigger a sequence of undertakings, starting with an invention, through investment and support for private investors, to production and consumption. The technological change in the power sector in its global, regional and national dimensions requires the deployment of new energy technologies and the implementation of appropriate policy measures, with views on both their cost-effectiveness and social acceptance of these provisions.

In light of the above presented discussion, regarding the substance of the energy transformation, its determinants and the role of the technology in the process, its selected internal conditions have been identified in the context of the Polish economy.

Changes in the Polish power sector in the past three decades were carried out along the lines of the Energy Law Act of 10 April 1997 and Polish energy policy, which is now determined by strategic framework documents, namely Polish Energy Policy by 2040 (PEP40) and the Strategy for Responsible Development for the period up to 2020 (including the perspective up to 2030). The energy policy objectives outlined in the legislation encompass energy security (and optimal utilisation of own energy resources) while ensuring competitiveness of the economy, energy efficiency and a reduction in adverse effects of the power sector on environment. These goals are consistent with the policy objectives of the EU, outlined in Article 194 of the Treaty on the Functioning of the European Union (TFUE). The strategic guidelines laid down in PEP2040 include the optimal use of own energy resources, the modernisation of electricity generation and network infrastructure, natural gas supply diversification, the modernisation of natural gas, crude oil and liquid propellant network infrastructure modernisation, the development of energy markets, the implementation of nuclear energy programme, the development of renewable energy sources, heating sector and cogeneration, and enhancement of the energy efficiency of the economy [17].

According to its economic potential, Poland is one of the frontrunners in the EU with respect to its power system. Poland possesses a considerable amount of hard coal and brown coal resources. For over three decades in which the Polish economy transformed, the coal mining industry provided employment to a significant of number of people (175 thousand employees in 2010 and circa 135 thousand employees in 2018) and played a major role for the community of its region of operations as well as for the whole economy [18].

Over the last three decades, the supply of domestic primary energy carriers followed a downward trend (see Figure 1). This process was related to the energy policy, including successive reforms of the coal mining sector with respect to its restructuring and privatisation, which aimed to enhance the performance of this branch ([2] pp. 131–142). Particularly in the past two decades, following the energy policy adopted in 2007 by the EU, long-term development strategies seeking to strengthen the competitiveness of the EU economy; increased social inclusion (referring, among others, to the Lisbon strategy and the Europe 2020 strategy), and the role of environment and climate-friendly power sector; and reforms aiming at increasing the dynamics of economic development and investment in projects to reduce emissions have been accelerated. At the same time, a mild increase in the domestic supply of natural gas and a surge in the use of renewable energy sources can be observed.

A downward trend in the production of domestic energy carriers was primarily accompanied by an increase in energy demand, but in the long run (that is, over the last four decades), primary energy use in Poland decreased from 99.1 Mtoe in 1990 to the level of 96.5 Mtoe in 2020. This is a result of pro-efficiency measures related to the restructuring of the economy and a retreat from the energy-intensive structure of heavy industries in the initial phase of the system transformation, and the subsequent implementation of new energy and resource-saving technologies ([18] pp. 6–8).

Figure 2 shows a downward trend in primary energy consumption per capita both in Poland and in the EU-27.

Over the last four decades, an increase in final energy consumption from 55 Mtoe in 2000 to 76.7 Mtoe in 2022 has been observed (see

Table 1. Final energy demand structure in Poland over the period 2000–2020 (thousand tonnes of oil equivalent). Source: Own elaboration based on Eurostat data [19].

Years	2000	2005	2010	2015	2020
Solid fossil fuels	11,642.30	11,436.94	13,775.50	9704.27	9415.05
Electricity	8432.81	9028.80	10,205.61	10,990.53	11,807.53
Natural gas	8158.00	9925.99	10,384.20	10,472.98	12,219.35
Heat	6886.21	6634.30	6546.91	5462.26	5602.44
Oil and petroleum products	17,156.09	19,862.90	23,262.13	21,996.33	27,824.59
Renewables and biofuels	3525.92	3856.46	5289.85	5569.71	9040.93
Non-renewable waste	76.22	136.38	378.17	486.36	831.29

). Attention should also be paid to changes in the structure of energy consumed; between 2000 and 2020, coal consumption decreased by 19.1% and heating consumption decreased by 18.6%. On the other hand, in the same period, an increase has been observed in oil and petroleum product consumption (by 62%), natural gas (by 49%), electricity (by 40%), natural energy sources (by 156%) and energy from waste (an almost tenfold surge). Hydrocarbons and fossil fuels still dominate in the final energy consumption structure in Poland, accounting for 64.6% of its total value (with its components—crude oil, natural gas and coal—constituting 36.3%, 16% and 12.3%, respectively). In the table below, nuclear heat is absent as, unlike in numerous EU countries, Poland has not been satisfying its demand with this source of energy. With respect to sectoral division, the final energy consumption structure is dominated by transport using 31% of the total in 2017. Other sectors include households (28.8%), industry (22.9%), services (11.7%) and agriculture (5.6%) ([3] p. 20).

Between 2000 and 2020, a growth trend with respect to the share of renewable energy sources in final energy consumption can be observed (with short-term fluctuations) (see Figure 3). A similar tendency can be seen in the EU. This is a result of its RES-promoting policy, conducted since early 2000, as well as introducing EU regulations into the Polish legal framework [21]. As mentioned before, the share of renewable energy sources in the final energy consumption in Poland increased by 156% over the period 2000–2020. It accounted for circa 12% of the total in 2020.

As indicated in the above analysis, in the period analysed, the domestic supply of energy carriers decreased, but at the same time, an increase in their consumption was observed. The additional energy demand was met by imports, which resulted in a growing dependence of the Polish economy on energy imports. The energy import dependency indicator increased in 2022 and amounted to 42.76% (see Figure 4). (It is still one of the lowest values among other member states of the EU. Over the period 2000–2020, the value of energy import dependency coefficient increased from 59.44 to 63.70 (see Eurostat) [23]. Crude oil and petroleum products amounted to almost two-thirds of the import of energy products by the EU in 2019. Natural gas and solid fuels constituted 27% and 6% of the total, respectively. The EU’s most important energy product supplier is Russia, covering 25% of crude oil imports and 41% of natural gas imports. The values of the energy import dependency indicator vary from one Member State to another and are often higher than the value for Poland [24].) Poland imports all types of fossil fuels, including mainly crude oil and natural gas [25].

Poland has been an importer of coal for around two decades despite having significant coal resources of its own. The coal imported satisfied circa 20% of domestic demand at the beginning of 2021. Russia is still Poland’s most important energy product supplier, covering 68% of crude oil and petroleum products imports, 55% of natural gas imports and 72% of coal imports. (Over the period analysed, decreasing coal exports were observed (Energy Forum, 2019, Energy transition in Poland, p. 38. [26])) Amid the ongoing crisis, including the war in Ukraine and its economic effects due to the sanctions imposed by the EU on imports from Russia, targeting hydrocarbons among others, the development of renewable energy sources as well as other clean technologies to produce electricity has become not only a vital element of the power-transformation sector but also a factor determining the energy security.

The power-generation structure in Poland is based mainly on hard and brown coal-combustion technologies. While their share in electric energy generation decreased in the period analysed, it still accounted for 77% of the total (including hard coal—48% and brown coal—29%) in 2018. Other energy carriers encompass natural gas (7%), renewable energy sources (13%) and other products (3%) ([18] p. 8). Hence, over the period analysed, changes occurred in the structure of the basket of raw materials and fuels used in electricity production in Poland. Noteworthy is the increasing contribution of renewable energy sources to the electricity generation that amounted to 12.7% in 2018 and the growing share of RES in the structure of capacities installed in the National Power System (NPS) (8.5 GW compared with the total capacity of 44.3 GW in 2018). The dynamic development of RES and their use in the NPS occurred between 2010 and 2018, as the installed capacity of RES increased fourfold and the electricity production from renewable energy sources doubled [27]. This process is exceptionally beneficial from the point of view of the system transformation with respect to electricity and heat generation, as well as the access to local renewable energy sources within the constraints of available hydrocarbons as a result of the war in Ukraine.

However, despite the increasing installed capacity of RES, conventional fuels dominated the structure of electricity generation. At the same time, the age of a large part of electricity infrastructure exceeded 40 years, which poses a considerable challenge given the increasing requirements for emission reductions. However, these challenges as well as the need for changes pertain not only to electricity infrastructure but also to transmission and distribution networks. Taking the high costs and long investment cycles into consideration, their state did not change much since the beginning of the transformation process [28]. Moreover, the increase in the RES contribution to power generation, given the current state of transmission and distribution infrastructure, presents an additional challenge related to this energy transition.

Changes with respect to the growing consumption of fossil fuels in Poland, including the electricity-generation structure dominated by coal, considerably influenced indicators related to CO₂ emissions. The trends in this area are presented in Figure 5.

The greenhouse gas emission intensity in terms of energy consumption in Poland decreased in the period analysed. The same trend can be observed in the EU, but this decrease was more dynamic. A greenhouse gas emission reduction poses a great economic and social challenge for Poland. However, this goal can be achieved with the aid of clean energy technologies.

1.3. Determinants of Clean Technology Development in the Light of the Literature

There are numerous factors responsible for shaping the process of innovation development in the field of clean energy technologies. A few out of the most important determinants of clean technologies development are considered in more detail within this article, and their influence on the creation of innovation are empirically tested.

One of the factors considered to influence innovative activity is the price of energy, according to the literature. An empirical analysis conducted by Popp [2002] showed on the basis of U.S. patent data from 1970 to 1994 that energy prices positively affect the creation of energy-efficient innovations, with this influence being strong and statistically significant [30]. Moreover, Acemoglu et al. [2012] pointed out the substantial influence that the relative price of energy has on innovation type [31].

Another factor examined within the present study is the stringency of environmental policy. Empirical studies on the connection between the restrictiveness of environmental regulations and innovation generally support the weak Porter hypothesis, stating that environmental policy stimulates innovation in the field but does not increase the overall innovation level. Profit-maximising firms seek the most cost effective way to adjust to new regulations by innovating. The same consensus has not been reached with respect to the strong version, implying a broad rise in competitiveness as a result of a more strict environmental policy [32]. One of empirical studies examining the relationship in question (Sterlacchini, 2020) shows that, based on the results of a panel analysis for 19 OECD countries, increased stringency of environmental regulation adopted at the global rather than national level supports international patenting activity in the field of energy. They also found this influence to be more pronounced that the one exerted by oil prices [33].

As regards another determinant of innovative activity in the energy field—long-term interest rate—the evidence concerning its impact on the creation of innovation is mixed and dependent upon other factors. According to Guellec and Ioannidis (1997), higher real interest rates are detrimental to investment, including R&D expenditures [34]. Aysun and Kabukcuoglu [2019] offered a more in-depth view on the issue, showing that higher interest rates are associated with a decrease in R&D spending, provided that firms are mainly incentivised by tax credits. On the other hand, if the incentives primarily take the form of grants and subsidies, which make them less dependent upon external sources of funding, the share of R&D spending compared with non-R&D expenditures rises during a credit tightening [35].

The effect of another factor—intellectual property protection on innovative activity—is ambiguous. On the one hand, a higher degree of protection encourages investment in innovation due to higher profits from innovative activity [36]. According to Horowitz and Lai, longer patent duration translates into higher profits and reduces its frequency as it restrains the access of other innovators to the inventions protected [37].

Evidence is mixed as well with respect to the market concentration of an industry. Some studies point to a positive impact of the variable in question on innovative activity [38]. Other authors suggest that this relationship is inverted U-shaped [39]. There are also studies indicating a negative influence of market concentration on innovation [40]. Some authors, on the other hand, find no statistically significant relationship between the two variables [41].

There are numerous factors influencing innovative activity in the energy sector apart from the abovementioned, including, among others, quality of institutions (other than elaborated on above), political orientation of the government, the distribution of resources between the energy sector and the rest of the economy, or trade openness [42]. However, it is beyond the scope of the present study to cover all of them.

2. Materials and Methods

The empirical analysis within this article aimed to find the determinants of innovative activity in the energy field in Poland. Most studies on the relationship in question concern either Western economies or a broader set of countries. The goal of this analysis was to check whether the relationships described in the previous section of the article are true for the Polish economy as well. As the time series for Poland with respect to both regressors and explained variables are not long enough for a regression model to be constructed, a panel data analysis was conducted, where apart from Poland, a small, homogenous group of countries was taken into account, namely Hungary, Czech Republic and Slovakia. As these four countries share some common characteristics, including their geographical proximity and former membership in the Eastern Bloc, the findings obtained from this extended analysis can be regarded as true for Poland alone, as well.

Within the analysis, several measures of innovation in the field of energy in Poland (and other CEE countries) have been regressed on an array of its potential determinants. Innovation has been operationalised as R&D expenditures of various kinds. These include total RD&D [43] in the field of energy divided by GDP [44], total RD&D in the area of renewable energy sources [45] expressed as a share of GDP and total RD&D related to low-carbon technologies (the categories that these expenditures relate to encompass energy efficiency; carbon capture and storage; renewable energy sources; nuclear, hydrogen and fuel cells; other power and storage; and other cross-cutting technologies and research) [46], divided by GDP. Data for all of the explained variables mentioned have been obtained from the OECD. The first of the variables listed refers to the energy sector in general, whereas the other two concern, more specifically, clean energy technologies. The present analysis thus determines if there are differences between the effect that explanatory variables are considered to exert on innovation in the case of both types of expenditures.

The set of explained variables encompasses energy price (energy CPI and annual percentage change on the previous period) [47], Environmental Policy Stringency Index (a country-specific and internationally comparable measure of the stringency of environmental policy; stringency is defined as the degree to which environmental policies put an explicit or implicit price on polluting or environmentally harmful behaviour; the index ranges from 0 (not stringent) to 6 (highest degree of stringency) (Environmental Policy Stringency Index, https://stats.oecd.org/ (accessed on 24 April 2022)) [48]), long-term interest rates (annual percentage change; lagging behind by three years—in accordance with the monetary policy literature [49]), the Intellectual Property Rights Index (constructed on the basis of an executive opinion survey and measuring the extent to which intellectual property in country is protected; it ranges from 1 to 7, where 1 indicates the lack of protection and 7 indicates a great extent) [50] and market concentration (market share of the largest generator in the electricity market in a country) [51]. The underlying data comes from the OECD database (apart from the market concentration, which comes from Eurostat database and intellectual property index coming from World Economic Forum database).

The model specifications presented below include panel OLS (ordinary least squares) as well as random effects panel regressions, depending on the results of Breusch–Pagan and Hausman tests, indicating the proper analytical approach. The results of the named tests are presented below (see

Table 2. Model specification tests.

Equation Number/Test (p-Values)	Breusch–Pagan Test	Hausman Test
$\left(1\right)$	0.0124423	0.437716
$\left(2\right)$	0.157497	0.962666
$\left(3\right)$	1.93358 × 10−5	0.235734
$\left(4\right)$	0.502096	0.700621
$\left(5\right)$	4.19145× 10−242	0.993366

).

The Breusch–Pagan test is used to verify the hypothesis of the existence of individual effects. Provided that the null hypothesis stating that the variance of an individual error term is zero is not rejected, adding individual effects to a regression is redundant and the pooled OLS is the proper method in this case [52]. The p-values in the above table indicate that individual effects are present in case of the regression Equations in (3) and (5). The test result is uncertain for Equation (1). In this case, on the significance level of 1%, the null hypothesis cannot be rejected, whereas assuming a statistical significance level of 5% allows for a rejection of the null hypothesis. Within the analysis, the pooled OLS was adopted. This choice was additionally justified with the aid of the Ramsey RESET (Regression Equation Specification Error Test) testing for non-linearity and correctness of the model specification. The null hypothesis was not rejected; thus, the specification chosen was correct ([52] pp. 62–63).

In case individual effects were detected, the Hausman test was applied in order to determine if fixed or random effects should be applied. The null hypothesis of the named test states that the random effects estimator is more consistent than the fixed effects one. Thus, its rejection implies the necessity for inclusion of fixed effects in a model ([52] pp. 179–180). The individual effects in Equations (3) and (5) proved to be random effects, in line with the results of the Hausman test. These models’ specifications have been constructed accordingly.

Due to a limited number of observations in the case of one of the models, an analogous model including a wider range of OECD countries has been created in order to check if the findings obtained can be confirmed with the aid of a more robust model. The panels used in this analysis are unbalanced with differentiated time spans, indicated in the summary table.

Descriptive statistics concerning both explanatory and explained variables have been provided in

Table 3. Descriptive statistics.

Variable	Mean	Median	Standard Deviation	Minimum	Maximum
$RDALL$	0.255	0.232	0.232	0.0100	0.900
$RDREN$	5.02 × 10−5	3.77 × 10−5	4.69 × 10−5	4.21 × 10−8	0.000197
$RDLOW$	0.000270	0.000226	0.000237	7.67 × 10−6	0.000894
$EPS$	1.43	1.08	0.872	0.354	3.05
$PRICE$	5.88	2.54	10.8	−59	70.8
$INTEREST$	4.28	4.30	2.41	−0.0802	10.7
$IPR$	3.97	3.89	0.349	3.37	5.00
$SHARE$	46.6	50.8	23.6	10.7	83.8

.

Below, the regression equations are presented with explanations of the symbols representing the variables used.

Equation (1):

$$\mathit{R}\mathit{D}\mathit{A}\mathit{L}{\mathit{L}}_{\mathit{i},\mathit{t}}={\mathit{\alpha }}_{\mathit{0}}+{\mathit{\alpha }}_{\mathit{1}}\mathit{E}\mathit{P}{\mathit{S}}_{\mathit{i},\mathit{t}}+{\mathit{\alpha }}_{\mathit{2}}\mathit{P}\mathit{R}\mathit{I}\mathit{C}{\mathit{E}}_{\mathit{i},\mathit{t}}+{\mathit{\epsilon }}_{\mathit{i},\mathit{t}}$$

(1)

Equation (2):

$$\mathit{R}\mathit{D}\mathit{A}\mathit{L}\mathit{L}={\mathit{\beta }}_{\mathit{0}}+{\mathit{\beta }}_{\mathit{1}}\mathit{I}\mathit{N}\mathit{T}\mathit{E}\mathit{R}\mathit{E}\mathit{S}{\mathit{T}}_{\mathit{i},\mathit{t}}+{\mathit{\beta }}_{\mathit{2}}\mathit{I}\mathit{P}{\mathit{R}}_{\mathit{i},\mathit{t}}+{\mathit{\beta }}_{\mathit{3}}\mathit{P}\mathit{R}\mathit{I}\mathit{C}{\mathit{E}}_{\mathit{i},\mathit{t}}+{\mathit{\beta }}_{\mathit{4}}\mathit{S}\mathit{H}\mathit{A}\mathit{R}{\mathit{E}}_{\mathit{i},\mathit{t}}+{\mathit{\epsilon }}_{\mathit{i},\mathit{t}}$$

(2)

Equation (3):

$$\mathit{R}\mathit{D}\mathit{R}\mathit{E}{\mathit{N}}_{\mathit{i},\mathit{t}}={\mathit{\gamma }}_{\mathit{0}}+{\mathit{\gamma }}_{\mathit{1}}\mathit{E}\mathit{P}{\mathit{S}}_{\mathit{i},\mathit{t}}+{\mathit{\gamma }}_{\mathit{2}}\mathit{P}\mathit{R}\mathit{I}\mathit{C}{\mathit{E}}_{\mathit{i},\mathit{t}}+{\mathit{\epsilon }}_{\mathit{i},\mathit{t}}$$

(3)

Equation (4):

$$\mathit{R}\mathit{D}\mathit{L}\mathit{O}{\mathit{W}}_{\mathit{i},\mathit{t}}={\mathit{\delta }}_{\mathit{0}}+{\mathit{\delta }}_{\mathit{1}}\mathit{P}\mathit{R}\mathit{I}\mathit{C}{\mathit{E}}_{\mathit{i},\mathit{t}}+{\mathit{\delta }}_{\mathit{2}}\mathit{I}\mathit{N}\mathit{T}\mathit{E}\mathit{R}\mathit{E}\mathit{S}{\mathit{T}}_{\mathit{i},\mathit{t}}+{\mathit{\delta }}_{\mathit{3}}\mathit{I}\mathit{P}{\mathit{R}}_{\mathit{i},\mathit{t}}+{\mathit{\epsilon }}_{\mathit{i},\mathit{t}}$$

(4)

Equation (5) *:

$$\mathit{R}\mathit{D}\mathit{R}\mathit{E}{\mathit{N}}_{\mathit{i},\mathit{t}}={\mathit{\zeta }}_{\mathit{0}}+{\mathit{\zeta }}_{\mathit{1}}\mathit{E}\mathit{P}\mathit{S}+{\mathit{\zeta }}_{\mathit{2}}\mathit{P}\mathit{R}\mathit{I}\mathit{C}{\mathit{E}}_{\mathit{i},\mathit{t}}+{\mathit{\epsilon }}_{\mathit{i},\mathit{t}}$$

(5)

* Equation (5) pertains to a broader set of OECD countries, as mentioned above.

$\mathit{i}$—country index.

$\mathit{t}$—time index.

$\mathit{R}\mathit{D}\mathit{A}\mathit{L}\mathit{L}$—total RD&D in the field of energy divided by GDP.

$\mathit{R}\mathit{D}\mathit{R}\mathit{E}\mathit{N}$—total RD&D in the area of renewable energy sources expressed as a share of GDP.

$\mathit{R}\mathit{D}\mathit{L}\mathit{O}\mathit{W}$—total RD&D related to low-carbon technologies.

$\mathit{E}\mathit{P}\mathit{S}$—Environmental Policy Stringency Index.

$\mathit{P}\mathit{R}\mathit{I}\mathit{C}\mathit{E}$—energy price.

$\mathit{I}\mathit{N}\mathit{T}\mathit{E}\mathit{R}\mathit{E}\mathit{S}\mathit{T}$—long-term interest rate.

$\mathit{I}\mathit{P}\mathit{R}$—Intellectual Property Rights Index.

$\mathit{S}\mathit{H}\mathit{A}\mathit{R}\mathit{E}$—market share of the largest generator in the electricity market.

3. Results

Table 4. Regression results.

Variable/Equation	(1)	(2)	(3)	(4)	(5)
Intercept	−0.433746 * (0.228693)	−1.40411 *** (0.334529)	−0.000140121 *** (4.27570 × 10−5)	−0.00141947 *** 0.000323508	−5.77480 × 10−6 1.14719 × 10−5
EPS	0.261184 ***	-	7.02005 × 10−5***	-	2.83404 × 10−5 ***
	(0.0873021)		(1.26750 × 10−5)		(2.32676 × 10−6)
PRICE	0.0206988 **	0.0234802 ***	3.95569 × 10−6 ***	2.45454 × 10−5 ***	3.66296 × 10−7 *
	(0.00967881)	(0.00474481)	(1.35337 × 10−6)	(4.52073 × 10−6)	(1.91060 × 10−7)
INTEREST		0.0836572 ***	-	8.13193 × 10−5 ***	-
	-	(0.0131207)		(1.24756 × 10−5)
IPR	-	0.311337 ***	-	0.000324860 ***	-
		(0.0741619)		(7.26536 × 10−5)
SHARE	-	0.00104642 (0.000948181)	-	-	-
Time span of data	2000–2012	2008–2019	2008–2012	2008–2019	1995–2015
Regression type	Pooled OLS	Pooled OLS	RE	Pooled OLS	RE

* Standard errors are given in parentheses. *, **, *** denote statistical significance at the 1%, 5% and 10% levels, respectively.

below depicts a summary of the outcomes of each model, including indications of statistical significance, time spans of the data used and the quality assessment of each model.

The empirical analysis conducted proves that energy price positively affects innovative activity in Poland. The same is true for the three other variables considered within the present study: Environmental Policy Stringency Index, long-term interest rate and Intellectual Property Rights Index. The variable corresponding to market concentration were proven to be statistically insignificant. These results are in line with the literature on the impact of the variables in question on innovation and consistent across the specifications used within the analysis, implying that the relations observed are true for both the energy sector in general and for clean technologies developed in the field.

The method of operationalising innovation is only one of the few possible and pertains to innovation input. Output, on the other hand, can be measured with the aid of data on patents or scientific publications ([11] pp. 399–400). This study thus covers the initial stage of the innovation process. Analysing the determinants of technology diffusion and adoption in the field of energy is a promising avenue of future research. Once the underlying time series become longer and more available, more robust results will be possible to obtain, as both processes are phased over time.

The technological change will have a stimulating effect on the transformation process. A crucial issue is, first, the retreat from the coal-based power generation industry. Low-carbon energy-use technologies have a major role to play in the process. It mainly pertains to wind and solar energy, as well as to biomass or hydropower. In recent years, a surge in the potential of the power generation based on the sources in question (see Figure 6) and an increase in their efficiency have occurred. Their costs are decreasing in the direction of the ones that conventional generation entails [53]. It should be stressed that these energy sources may prove more controllable and, consequently, be more extensively used in the power-generation process thanks to other technologies in the field (including digitisation, new electricity storage technologies, smart metering, etc.).

In light of the analysis conducted, energy prices will impact the stimulation of changes in the scope of energy technologies deployed.

Taking the predominance of coal in the energy-generation structure in Poland into account, there has been a surge in the price of power generation in the recent years (together with the rising prices of CO₂ emission allowances since 2019 and the prices of imported coal, especially in the beginning of 2022, etc.). Along with legal provisions resulting from climate and energy policy, it will exert a constraint on the situation of the coal-based power generation industry in the present difficult situation related to the economic crisis and the war in Ukraine.

4. Discussion

Taking the initial stage of the innovative process alone into consideration, it can be assumed that policy measures to be deployed to stimulate innovation in the energy sector should be similar in the cases of both Western economies and CEE countries, including Poland, as the results of the present analysis bear much resemblance to the ones already obtained for broader sets of countries, mainly for the Western ones.

As regards the impact of energy price on innovation, the results of the present study are in line with those obtained by Popp [30]. The models presented confirm the weak Porter hypothesis, as well. Its strong version has not been considered, as the analysis encompasses sectoral data on innovation only. The regression results contradict those from the study by Guellec and Ioannidis [34] but are consistent with the more detailed ones obtained by Aysun and Kabukcuoglu [35] for the case of R&D incentivised mainly in the form of grants and subsidies. With respect to the protection of intellectual property rights, the model findings support the hypothesis that a higher degree of protection encourages innovative activity, as stated by Kim et al. [36].

As the results of the present analysis are largely in line with those obtained for the Western countries, the Polish membership of the EU entailing stricter regulation in the field of energy can stimulate the transformation process, which is driven by the technological change to a large extent. Attention should be paid by the policymakers to the impact that regulations in the energy field exert on energy prices. The domestic energy policy should be constantly adjusted to the legal framework of the EU. Hence, traditional energy sources are becoming more and more expensive, which results in the growing cost competitiveness of new, renewable energy sources. This tendency can be extrapolated to other economies, similar to Poland, as well. It pertains to the CEE countries, in particular.

The policymakers should also attempt to shape an array of other country-specific determinants of energy prices, including electricity generation structure, the nature of competition in the energy market, elasticity of the electricity system, the costs of its development, cross-border transmission possibilities, as well as taxes or charges, as much as possible [54].

As the findings of this and related analyses suggest, the transformation effort should include reasonable monetary policy-making as well as increased protection of intellectual property rights in order to create a favourable environment for long-term and risk-bearing investments.

The Polish energy policy as set out in PEP40 aims to achieve the following objectives: the optimal use of own energy resources (including just transition of coal-mining regions to which PLN 60 billion of EU funds will be allocated); the extension of electricity generation and grid infrastructure; the diversification of supply and expansion of network infrastructure for natural gas, crude oil and liquid fuels; the development of energy markets; the implementation of nuclear energy; the development of renewable energy sources (including offshore wind energy); the development of district heating and cogeneration; as well as improvements in energy efficiency. The directions of these goals are in line with the EU objectives.

It has been shown in the present analysis (see pp. 15–16) that, in the last two decades, a process of change in the structure of the energy mix in Poland has been seen, with a reduction in the share of fossil fuels in electricity generation and an increase in the share of RES. As a result, a decrease in greenhouse gas emissions has been observed. Further plans were adopted for the period from 2020 to 2030 concerning reductions in emissions, increasing the share of RES in final energy consumption and increasing energy efficiency. However, the European Green Deal programme, including ambitious targets set out in the “Fit for 55” package related to emission reductions and ensuring a just transition and energy security, was recognised as a significant challenge for the Polish economy.

In Poland, in light of the current energy policy, the end of coal mining is to be reached in 2049. A slow phase-out of coal over the next three decades will require the expenditure of huge sums on decommissioning, social security and retraining employees.

Poland has reaffirmed its position on building a carbon-neutral economy in the long term in its plan to rebuild its economy after the COVID-19 pandemic—the Reconstruction and Development Plan—and at the Glasgow Climate Conference, where Poland did not present new climate commitments but confirmed the EU targets of achieving neutrality by 2050 and reducing CO₂ emissions by 55% by 2030.

The situation concerning energy management has radically changed in Europe and in Poland as a result of the war in Ukraine after 24 February 2022. Poland, which is heavily dependent on imports of Russian oil, gas and coal (see pp. 8–9), currently faces a situation in which the EU’s sixth package of sanctions was introduced and decisions to move away from hydrocarbons imported from Russia and has found itself in a difficult situation in a short period of time. The high prices of energy carriers and their limited supply is a new and major challenge for energy and economic policies before the coming winter period.

In the short term, we can expect a return to the possibility of greater mining and the use of coal, which may slow down the current process of transformation in the Polish energy sector. At the same time, observing companies’ interest in increasing the capacity installed in RES, limiting carbon emissions or developing technologies enabling the management of dispersed energy sources as well as households’ interest in investing in photovoltaic panels and heat pump installations, it may be expected that the energy transformation will continue or even accelerate [55].

Technology will play a breakthrough role in this regard. The present analysis focuses for the most part on clean generation technologies, but attention should be paid to all kinds of technologies stimulating the transformation process. The more holistic view encompasses technologies associated with energy supply, trade and consumption, as well. They are developed in parallel and are intertwined. Taking it into account along with their different development stages will help policymakers recognise the scale of the potential for change that the deployment of new technologies in the energy sector entails ([53] pp. 35–36).

Therefore, in the new conditions arising after 24 February 2022, in the short term, it would be advisable for Poland to build up reserves of energy from raw materials, securing the economy and household stability for the coming months but, at the same time, in the long term, to start implementing the energy projects set out in PEP40, investing in, e.g., the development of RES and nuclear energy, increasing the extraction of domestic raw materials and diversifying imports of energy from raw materials (directions of supply and type of fuel). However, it is difficult to build any forecast in this complex geopolitical, economic and energy commodity market situation.

Taking all of the aforementioned aspects into account will help encourage innovative activity in the energy sector in Poland and to stimulate the energy-transformation process.

5. Conclusions

The present study highlights the energy transformation in Poland—its course, perspectives and the meaning of innovation for this process. The major determinants of innovative activity in the energy sector in Poland have been examined empirically.

In the period analysed, changes in the field of power generation in Poland have been observed. They manifest themselves through a considerable though declining coal share in the electricity-generation structure in favour of a growing renewable technology share.

The energy-transformation process in Poland will first consist of a retreat from coal combustion in the power industry. The scope of change as well as its pace are determined by various factors with different natures. The major role in the process will be played by EU and domestic climate and energy policy regulations, as well as the possibility of financing just transition in Poland. At the same time, dynamic changes can be expected with respect to technological change. New clean generation technologies will enable sector transformation, pollution emission reductions and employment creation and will lead to a profound transformation of the economy as a whole.