Development of the Polish Power Sector towards Energy Neutrality—The Scenario Approach

Abstract

This article discusses three scenarios for the transformation of the Polish power system leading to the achievement of climate neutrality through investment in renewable energy sources. The scenarios differ in terms of the role played by the selected energy technologies. The scenarios were developed using the balancing tool, the Simulator Polish Power System, which analyzed the development of the national power system in terms of optimal costs of achieving climate neutrality and the lowest possible price of electricity generation. The research shows that under Polish climatic conditions, 100% RES energy can be achieved in the balance, but ensuring the continuity of energy supply, which in future will be generated mainly from this type of source, requires the participation of controllable sources such as gas-fired power plants powered by biomethane and energy storage facilities. The scenarios assume balancing RES sources with 15–25 GW of available gas sources and 40 GWh in electricity storage. The article also discusses factors limiting the suggested scenarios, such as the availability of sustainable biomethane in Poland or limitations associated with the possibility of building onshore and offshore wind turbines.

1. Introduction

In order to meet the requirements of the Paris Agreement [1], a transformation of the energy sector and a shift from the use of fossil fuels to RES is necessary. As most greenhouse gas emissions come from the energy sector, changes in this sector need to be made as soon as possible. The largest producers of CO₂, i.e., China (30.68% of global emissions) and the United States (13.61% of global emissions) [2], declare that they will achieve climate neutrality in 2060 [3] and 2050 [4], respectively, and are already investing heavily in the energy transition, as currently 28.6% of energy produced in China comes from RES [5] and in the US, the share is 21.6% [6]. The European Union, despite accounting for 7.43% of global CO₂ production [2], is a key player in global climate policy. The EU has set very ambitious targets for reducing greenhouse gas emissions and increasing the share of RES in the energy mix. The EU’s introduction of ambitious climate targets and the increase in the share of RES capacity not only reduces greenhouse gas emissions, but also reduces Europe’s dependence on fossil fuels and the cost of electricity generation. These actions mean that in future years, it will be investments in energy that will drive the European and global economy and create new industries and services and a new division of labour. The energy sector will have a significant impact on many areas of the economy due to the electrification of individual sectors of the economy, construction, transport and heating and industrial energy supply systems will evolve [7]. There will be sector integration (sector coupling) and this direction implies an increase in the use of electricity from RES sources to power specific sectors of the economy (such as the transport sector, various industries and district heating—heating of buildings) in order to minimise dependence on fossil fuels that contribute to greenhouse gas emissions to the environment [8].

Due to investments in renewable energy sources, European countries are currently leading the world in modern energy transition [9], with Poland in a distant 62nd place. The emissivity of the Polish energy sector is significantly higher than that of other EU countries due to the large share of coal in electricity production. More than 70% of Poland’s energy comes from burning hard coal and lignite [10]. In order to implement the EU climate policy and also to ensure the competitiveness of the Polish economy, it is necessary to carry out a rapid transformation of the energy sector.

The importance of the energy transformation process was highlighted and the move towards Europe’s independence from fossil fuels was observed just after the outbreak of war in Ukraine with a sharp increase in the cost of electricity production, with natural gas-fired power stations seeing a 645% increase in 2021 compared to 2020 [11]. The scale of the increase in power generation costs for conventional power plants shows how vulnerable they are to fuel price increases. While conventional power plants are exposed to increases in fuel prices and the cost of CO₂ emission allowances, the development of RES technologies in recent years has resulted in an 88% decrease in the Levelised Cost of Electricity (LCOE) for photovoltaic plants (PV) and 68% for onshore wind plants compared to 2010 [11]. According to the Fraunhofer Institute in 2021, the LCOE of currently operating conventional power plants will eventually be equal to the LCOE of new RES-based units. The institute indicated that in 2040, due to rising CO₂ allowance prices, the average cost of electricity LCOE will be lower for RES units [12]. Rising energy commodity prices further accelerate this process. The marginal cost of producing electricity from new wind turbine and PV installations in 2021 was between 4 and 6 times less than the cost of producing energy from fossil fuels [11].

In order to choose the right directions for the electricity sector, appropriate analytical tools are needed that can predict the future direction of the energy sector and support strategic decision-making related to investments towards sustainability. As energy generation and demand become increasingly integrated, a holistic approach to analysing and identifying potential synergies between different energy sectors becomes essential. Consequently, there is an urgent need for the development and application of advanced methods and tools for the modelling and simulation of energy systems. There are many different energy simulating approaches today, each characterised by different operationalization assumptions, features, data and results. The divisions of energy models are not strict and mixed-paradigm models often exist [13]. Most can be classified as ‘bottom-up’ (techno-economic) models, which are based on detailed engineering data and a wide range of technologies and energy consumption, and ‘top-down’ (macroeconomic) models, where energy is modelled at the aggregate sector level with an accurate representation of the whole economy, taking into account endogenous market adjustments. Energy models can also take the form of simulation tools that show what the energy future might look like based on a variety of data and external factors, and optimisation tools that seek to meet energy demand at minimum cost or maximise overall welfare. One of the simulation tools available for the power sector is the STREAM software v.2.0.2 [13], which is based on a bottom-up approach. With this tool, the user can create a model of the electricity system and generate information on, e.g., greenhouse gas emissions, investment and operating costs, but the tool does not take into account weather conditions, which have a very significant impact on the operation of RES. In a similar way, scenarios can be created using the EnergyPLAN tool [14], which is used to analyse national electricity systems.

Therefore, it can be stated that on the one hand, there is a need to build reliable holistic scenarios for Poland’s energy system to achieve 100% energy neutrality and support the ongoing public debate on possible pathways, and on the other hand, there is a need to verify the applicability of the tool used for simulating different options of such a transformation. These are the primary arguments behind undertaking this research. Electricity system models can contribute to strengthen the discussions on the transformation of the Polish electricity sector through science-based evidence and enable decision-makers to choose the right path towards achieving climate neutrality in 2050.

In this study, using the Simulator Polish Power System tool [15], which balances electricity production with energy demand in the economy based on actual weather data for Poland and electricity demand, an attempt was made to answer the question of whether it is possible to have 100% RES energy in the balance produced largely from wind and sun without burning solid biomass under Polish climatic conditions. The paper also aims to assess three scenarios for a possible target structure for the transformation of the electricity sector to achieve climate neutrality, which assumes the complete elimination of the use of fossil fuels.

1.1. EU Climate Policy and Its Implementation in Poland

EU Member States, including Poland, work constantly on climate change resolutions. The European Union is a key player in global climate policy and is an uncrowned world leader and creator of comprehensive regulatory standards in the sphere of climate protection and reduction in CO₂ emissions. In 2005, the European Union Emissions Trading System (EU ETS) was created [16]. It is the first and largest international emissions trading scheme. Currently, it is now recognised as the main climate change policy mechanism within the EU [17] and the main tool for reducing greenhouse gas emissions in Europe [18]. In 2008, the EU adopted an energy and climate package, which included regulations setting climate change targets until 2020 (the so-called 3 × 20% package). The EU committed to a 20% reduction in greenhouse gas emissions, a 20% increase in overall energy efficiency, and a 20% share of RES in the overall energy mix [19]. This package of goals became the starting point for new, more ambitious reduction targets in subsequent years. In turn, in 2004, the European Council approved four aims in the 2030 horizon for the EU as a whole, which were revised twice in 2018 and 2020, introducing a new endpoint of at least a 55% reduction in greenhouse gas emissions compared to the emissions recorded in 1990, a 32% share of renewables in gross final energy consumption, a 32.5% increase in energy efficiency and the finalisation of the EU internal energy market formation [20]. In 2019, a package of legislative initiatives called the ‘European Green Deal’ was developed with the aim of achieving climate neutrality for the EU by 2050. The initiatives undertaken were designed to transform the EU into a modern, resource-efficient economy with zero greenhouse gas emissions by 2050, and assume that the relationship between economic growth and the use of natural resources is minimised [21].

In 2021, a package of regulations called ‘Fit for 55’ was published to meet the goals of achieving climate neutrality by 2050 and reducing greenhouse gas emissions by 55% until 2030, compared to 1990 levels [22]. The package increased the level of ambition in eight existing pieces of legislation and introduced five new initiatives covering a range of policy areas and economic sectors, including climate, energy and fuels, transport, buildings, land use and forestry [23]. As part of the package and as a result of subsequent updates to the REPowerEU directives, the package introduced the following amendments:

• Amendment to the EU Emissions Trading Scheme (ETS) Directive. The amendment aims, among other things, to achieve a 61% emission reduction in the current sectors covered by the EU ETS by 2030 compared to 2005 levels; enlargement of the EU ETS to cover maritime transport and implementation of CO₂ emission charges for buildings, road transport and fuels in additional sectors [24].
• Amendment of the Renewable Energy Directive (RED III). A target for the share of renewable energy in the European Union’s gross final energy consumption in 2030 of 42.5% was introduced in addition to the following sectoral targets:

  ⚬

  For the building sector, at least 49% of energy should come from RES;

  ⚬

  For the transport sector, a 14.5% reduction in the greenhouse gas intensity of transport using RES or a 29% share of RES in final energy consumption in transport in 2030 should be achieved;

  ⚬

  For industry, RES use should be increased by 1.6% per year by 2030;

  ⚬

  For the heating sector, an indication of RES use of 0.8% per year at the national level should be achieved by 2026 and 1.1% from 2026–2030 [25].

• Amendment of the Energy Efficiency Directive, which introduced an EU-wide binding energy efficiency target, with reductions in EU final energy to be 787 Mtoe and primary energy to be 1023 Mtoe. Relative to the current target of 32.5%, this means an increase to 36% for the final energy and 39% for primary energy levels [26].

With regard to Poland, the implementation of national climate policy is determined by the national strategic documents. Primary document setting directions for the energy sector are driven by the Energy Policy of Poland. Currently, the Energy Policy of Poland is a binding document valid until 2040 (PEP2040). The paper sets strategic directions for the development and transformation of the energy sector from the 2040 perspective. Accordingly, the goal of energy sector development from the 2040 perspective in Poland is to maintain energy security while ensuring the competitiveness of the economy, energy efficiency and reducing the environmental impact of the energy sector as well as taking into account the optimal use of Poland’s own energy resources [27]. At the moment, due to the geopolitical situation, and increase in the European Union’s ambitions in terms of RES, work is underway to update the document, which aims, among other things, to accelerate the energy transition and increase Poland’s energy sovereignty [28].

In the currently functioning document entitled the Energy Policy of Poland, which is valid until 2040, the main goals are as follows:

• Increasing the share of RES in all sectors and technologies. The planned share of RES in gross final energy consumption must be at least 23%, including shares no less than 32% in electricity, 28% in heating and 14% in transport;
• Reduce the share of coal in electricity generation to below 56% by 2030;
• Implementation of nuclear power in 2033;
• Reduce primary energy consumption by 23% by 2030 compared to 2007 consumption projections;
• Reduction in GHG emissions by around 30% by 2030 compared to 1990.

1.2. Characteristics of the Electricity Sector in Poland

At the end of 2022, the installed capacity of the National Electricity System was 60,446 MW, while the generating capacity was 59,578 MW [29]. In total, 38,867 MW of the installed capacity was provided by commercial power plants, including 24,897 MW fueled by hard coal and 8262 MW by lignite, holding a 41% and 13.6% share of the system, respectively. To a lesser extent, installed capacity in the NPS was based on gaseous fuel (5.4%) and hydropower (4.01%). Approximately, 21,578 MW was the RES capacity (mainly onshore wind and PV), which represents 35.7% of the installed capacity in the National Electricity System [29]. It is noteworthy that Poland’s largest coal and lignite-fired power plants are on average 42 years old, and some of them are much older. The Laziska generating unit was commissioned 50 years ago, the Łagisza and Adamów power plants are around 55 years old, and the Turów lignite plant is approaching 60 years of operation [30]. Units older than 35 years account for more than a third of Poland’s coal-based generation capacity [31]. The volume of gross domestic electricity production in 2022 was 175,157 GWh [29]. Over the last 10 years, the production volume has increased by 15,304 GWh. The structure of electricity production has not changed significantly over recent years. The vast majority of production takes place with conventional fuels—hard coal and lignite. Their share in the structure of the national energy mix in 2022 was 50.1% and 26.82%, respectively. The share of gas-fired power plants in electricity production was 5.71%. As much as 15.76% of the energy produced in 2022 came from renewable sources [29].

Over the last few years, there has been a significant increase in the share of generation from renewable sources. In two years, from 2020 to 2022, the installed capacity in this sector increased from 10,299 MW to 21,578 MW [29]. Despite the energy sector’s investment in RES, in 2021, the largest share of GHG emissions in Poland came from electricity and heat production—43% of total gross emissions [32]. The emissivity of electricity production in Poland was 750 kg CO₂/MWh, one of the highest in the EU [10].

It needs to be emphasized that Poland faces contested challenges in transforming its energy sector. This is due to the fact that the main source of energy in Poland is fossil fuels, while at the same time, the entire electricity infrastructure is outdated [33]. Poland has one of the highest shares of fossil fuels, especially coal, in electricity production among EU countries; although Poland’s share of coal fell by 19.4% between 2000 and 2022 (from 98.4%), it was still the second highest in the European Union in 2022 [34]. Given the common emission reduction target, Poland will have to equalise its emission factor with the EU average in order to remain competitive. Poland will have to reduce its current emission factor from around 0.65 t CO₂/MWh to values close to 0 [35]. In the next few years, Poland will have to undergo a transformation of its power sector towards low-emission and zero-emission renewable sources. The number of coal and lignite mines in operation, coal-fired power plants and people employed in related sectors means that the transformation of the energy sector will be difficult, but is necessary [36,37,38].

The power sector, due to the electrification of further economic sectors, will have a major impact on the economy as a whole, including transport, heating and industry. The process of decarbonisation of these sectors will translate into the functioning of the Simulator Polish Power System through increased consumption of electricity in these sectors, which will consequently imply the need for increased energy production in generation units.

The current targets and plans for the energy transformation in Poland, for the year 2030, adopted in the document “Energy Policy of Poland until 2040” are not very ambitious from the point of view of the EU climate policy. The EU sets as a target a reduction in GHGs of at least 55% by 2030 and a mere 2% share of coal in electricity generation [39]. The document predicts the share of RES in electricity generation in 2030 in Poland to be 32%, while the EU average is predicted to be 68% [40]. A comparison of the scenarios of the Polish Energy Policy with the EU climate targets for the year 2030 is presented in Figure 1.

2. Materials and Methods

The selection of an optimal transformation scenario for the Polish power sector is a complex and multi-threaded process, requiring a mix of multiple generation technologies, energy storage and appropriate investment in the electricity transmission and distribution system. The European emission reduction target for 2030 for the ETS sector is 62% compared to 2005. Translating this target directly into the domestic power sector would require a reduction in greenhouse gas emissions of almost 30 million tonnes between 2024 and 2030 [41]. Therefore, the transformation scenario for the electricity sector should take into account the need to rapidly change the national energy mix and bring it in line with current regulations.

In order to prepare scenarios for the modernisation of the electricity sector, the Polish Power System Simulator [15] was used, a tool that balances electricity demand with energy production by individual sources. Simulator is an open-source tool that is based on a spreadsheet. It is used to carry out analyses of possible scenarios for energy sectors. It is a tool to obtain information in a quick, transparent way on how increasing the installed capacity of a given RES technology affects the operation of the electricity system. A schematic diagram of the simulator is presented in Figure 2. Based on actual weather data for Poland and the demand for electricity, the simulator balances electricity production with energy demand in the economy. The simulator makes it possible to indicate the individual components of the future energy system and the proportions between them. It is a tool that shows the potential goal of the energy transition and indicates the technological challenges for building an energy system of a given configuration. The purpose of the simulator is to analyse the energy balance of energy production and use without analysing the grid aspects and the topology of the system itself. The simulator has a number of limitations. Power generation technologies have been limited to RES sources, nuclear power plants and biomethane/natural gas power plants. The simulator takes into account cost estimates for energy sources and storage, but does not take into account the expenses associated with investments in grid infrastructure, nor does it indicate the specific types of equipment and capacity in the area. The resulting simulation scenarios present a target state, do not show the path to the target state in the following years, and in the simulation, no electricity exchange with neighbouring countries is included [15].

The Polish Power System Simulator is a balancing tool that is based on actual hourly power demand data from the Polish Transmission System Operator [41]. Data on electricity production from existing PV installations and wind farms come from the ENTSOE [42] platform, for which the data source is actual data from Polish Transmission System Operator [43]. The platform provides information on actual PV and wind turbine operation profiles for the whole of Poland, taking into account the actual distribution of sources. There are currently no offshore wind turbines installed in Poland, so production data are based on weather models and the characteristics of planned wind turbines. The Polish Power System Simulator is available online with free access [15]. The data sources for the simulations were downloaded from a free online source, which is the basic source of data presenting the situation in the energy system in Poland. The data are also available in a historical format, which allows for any use in the scope of the research in question [44]. Figure 3 and Figure 4 below show the installed capacity of each energy source and the electricity production of each source in 2022 in Poland, which is considered as a baseline year for the discussed research.

In the simulator, the user prescribes the installed capacity of the sources, which translates into energy production. In addition, the user assumes the capacity of energy and heat storage facilities, which can utilise excess electricity production. In the case of overproduction of energy, energy storage in Li-ion storage facilities or energy storage in pumped storage plants can be simulated. When electricity production from RES sources is insufficient to meet the demand, the simulator balances the system through dispatchable sources in the form of gas-fired power plants. The simulator does not have the ability to stagger investments over time, as it only shows the target structure of the system.

There are many simulation tools for electricity systems and these include LEAP (Long-range Energy Alternatives Planning System) [45], EnergyPLAN [46] or STREAM [13]. These are tools widely used for energy policy analysis and climate change mitigation assessment. These tools have been used in many studies, such as the development of national energy strategies and assessing the feasibility of different technologies [45,46,47]. Using the EnergyPLAN tool, the feasibility of transforming the German electricity sector to 100% RES was assessed [48].

Three scenarios for the modernisation of the electricity sector in Poland were prepared using the Polish Power System Simulator [15]. All scenarios assume a change in the current electricity generation structure. For all scenarios, the electricity production volume of 2022 was assumed to be 175.157 TWh [29].

Table 1. Assumptions for simulation scenarios. Source: own elaboration.

Energy Source	Investment Cost [bn PLN/GW]	Time to Launch [Years]	Lifetime [Years]	O&M [bn PLN/GW]	Fuel Cost [bn PLN/GW]
Wind On-shore	5.4	2	25	0.065	0.007
Wind Off-shore	10	4	20	0.184	0.017
PV	2.2	1	30	0.052	0.00
Nuclear Power plant	45	10	70	0.5	0.016
Gas power plant	4	3	25	0.06	1.0
Li-ion batteries	1	1	20	-	-
Pumped storage power plant	1	10	100	-	-

below shows the assumptions for each simulation.

Additionally, it was assumed that the cost of CO₂ emission allowances is 70.16 EUR/CO₂—303.32 PLN/t CO₂ [49]. It was also assumed that the discount rate will be 5% and the biomethane price will be 500 PLN/MWh.

2.1. Scenario 1: 100% Renewable Energy—Optimal Technology Mix

In this scenario, an attempt was made to select an optimal energy mission based on renewable energy sources without biomass combustion, with the aim of meeting 100% of electricity generation from zero-emission sources. It has been assumed that for this purpose, 15 GW offshore wind turbines, 50 GW onshore wind turbines and approximately 50 GW PV should be built. In order to balance the system, 23 GW of dispatchable sources and electricity storage in the form of 20 GWh LI-ion storage and 20 GWh pumped storage are needed. The scenario ignores the costs of extending the electricity grid.

2.2. Scenario 2: 100% of Energy Produced by RES Power Plants—Investment in PV Sources

In this scenario, attempts to create an energy mix based mainly on solar energy are undertaken. The scenario assumes that all electricity demand will be met by PV sources supported by dispatchable gas-fired power plants. The mix assumes the capacity of currently installed wind turbines—10 GW [41], and assumes no new investment in wind sources. The scenario assumes that a total of 100 GW of PV will be built in the electricity mix and 25 GW of dispatchable sources are needed to balance the system and, as in Scenario 1, the construction of electricity storage in the form of 20 GWh LI-ion storage and 20 GWh pumped storage is required. The scenario ignores the costs of extending the electricity grid.

2.3. Scenario 3: Carbon-Free Mix of Renewables and Nuclear Power Plant

In this scenario, it was assumed that all electricity demand would be met by emission-free sources. It was assumed that in order to realise the scenario, 10 GW of offshore wind turbines, 40 GW of onshore wind turbines, about 30 GW of PV and 10 GW of nuclear power plants would need to be built. To balance the system, 15 GW of dispatchable sources would be required. The scenario ignores the costs of extending the electricity grid. No use of electricity storage is envisaged in this scenario.

The adopted scenarios are of a model nature and as such constitute a certain simplification; therefore, as a rule, they do not take into account some impact factors. However, it is assumed that they reflect scenarios of changes caused by energy policy options and ongoing public debate. Therefore, the adopted scenarios have certain limitations. Firstly, the maximum economically justifiable potential for onshore wind turbines was assumed to be 51 GW [50]. In addition, it has been assumed that a maximum of 33 GW of offshore wind turbines can be installed in Poland [51]. According to estimates [52], up to 8 bn m³ of sustainable biomethane can be obtained in Poland. The scenarios did not assume any restrictions on the possibility of building PV installations. The simulations did not take into account the costs associated with the necessary modernisation of the district heating network. In each scenario, dispatchable gas sources were used to stabilise the operation of weather-dependent sources.

Secondly, the scenarios omit analysis of network aspects, i.e., the configuration and topology of the system itself, and the costs associated with upgrading the distribution and transmission networks. The main challenge for the implementation of the proposed scenarios is the need for rapid modernisation of the electricity grid. Lack of investment in electricity grids results in a lack of sufficient connection capacity, which consequently translates into an inability to connect new RES sources. Weather-dependent sources have to cooperate with dispatchable sources, so it is necessary to adapt the capacity of the transmission and distribution networks and to deploy dispatchable sources accordingly. Network development and modernisation should be aimed at creating conditions for safe operation of the electricity system, increasing the reliability of power supply to areas of large urban agglomerations, strengthening the role of the transmission system in the overall system, increasing the operational capacity, increasing the capacity of voltage regulation, power evacuation from connected sources and the development of cross-border interconnections [53]. This requires, among other things, a significant expansion of the structural transmission network and structural changes to power supply systems in sensitive areas of the country, enabling energy sources with different generation technology and different operating parameters to cooperate with each other and removing transmission functions from the 110 kV distribution network, which is still the case in many regions of the country [54].

Next, at present, Poland has electricity storage facilities with a total capacity of 2.043 GW and a capacity of 9.3 GWh. Of this, the installed capacity of pumped storage power plants is 1.767 GW and the capacity of battery-based energy storage is 0.276 GW. Building and connecting the proposed electricity storage capacities in the scenarios of an additional 40 GWh, of which 20 GWh is in stationary batteries and 20 GWh is in pumped storage, require an upgrade of the transmission networks. Battery storage facilities can be built in a relatively short period of time because they are available on the market, their construction time is short and they require little space. Poland has planned to build battery storage facilities of about 2 GW by 2027 [55].

Furthermore, the pumped storage power plants require large areas of investment land, large financial outlays and meeting environmental requirements, so their implementation may be difficult. The construction of pumped storage power plants with a capacity of about 20 GWh is currently under consideration in Poland [56].

Finally, in the assumed scenarios, a large part of the energy is irretrievably lost due to the lack of momentary use, which can translate into a longer payback period and thus an increase in LCOE.

3. Results and Discussion

The simulation results allowed us to optimize the assumed scenarios. For scenario 1, it was assumed that 100% renewable energy will be put into the optimal technology mix. The scenario succeeds in balancing the electricity system with RES sources. The cost of building an electricity system based on the proposed technology mix is PLN 662 bn. The LCOE for this scenario was 419 PLN/MWh. If the cost of building existing installations is excluded, the cost of upgrading the system would be PLN 541 bn. Approximately 2.7 bn m³ of biomethane/natural gas would be needed to balance the system. In the case of using biomethane to balance the system, CO₂ emissions would be completely reduced, while in the case of using natural gas to balance the system, annual CO₂ emissions would be 5 MtCO₂ and the emissivity of electricity production would be 17 gCO₂/kWh. The potential cost of purchasing CO₂ emission allowances would be 1.52 bn PLN/year. In this scenario, there is an annual overproduction of electricity of 134 TWh. The surplus energy could be used in the heating sector or for hydrogen production.

In scenario 2, it was assumed that 100% of energy will be produced by RES power plants through investment in PV sources. The scenario succeeds in balancing the electricity system with RES sources, but as much as 15.3 bn m³ of biomethane is required, which means that bio-methane would also succeed [52]. The cost of building an electricity system based on the proposed technology mix is PLN 415 bn. The LCOE for this scenario was 435 PLN/MWh. In the case of using biomethane to balance the system, CO₂ emissions would be completely reduced; in the case of using natural gas to balance the system, annual CO₂ emissions would be 30 MtCO₂ and electricity generation would be 148 gCO₂/kWh. The potential cost of purchasing CO₂ emission allowances would be approximately 9.1 bn PLN/year. In the scenario, there is an annual overproduction of electricity of 35 TWh. The surplus energy can be used in the heating sector or for hydrogen production.

In scenario 3, it was assumed that a carbon-free mix of renewables was used and the development of a nuclear power plant occurred. The scenario succeeds in balancing the electricity system with RES sources and using nuclear power. The cost of building an electricity system based on the proposed technology mix is PLN 892 bn. The LCOE for this scenario was 465 PLN/MWh. If the cost of building existing installations is excluded, the cost of upgrading the system would be PLN 781 bn. Approximately 1.5 bn m³ of biomethane/natural gas would be needed to balance the system. In the case of using biomethane to balance the system, CO₂ emissions would be completely reduced; in the case of using natural gas to balance the system, annual CO₂ emissions would be approximately 3 MtCO₂ and electricity generation emissions would be 10 gCO₂/kWh. The potential cost of purchasing CO₂ emission allowances would be about 0.9 bn PLN/year. In the scenario, there is an annual overproduction of electricity of 125 TWh. The surplus energy could be used in the heating sector or for hydrogen production.

The proposed scenarios show the possible directions of development of the electricity sector in Poland. The scenarios differ from each other in terms of investment costs, electricity generation costs, and carbon intensity. The installed capacities and electricity production by each technology in the scenarios are shown in Figure 5 and Figure 6 below. Additionally, Figure 7 presents the comparison of the electricity production of each technology in the scenarios with the electricity production of each energy source in 2022 in Poland.

From Figure 8, one can learn that the highest investment costs are associated with Scenario 3 at PLN 892 bn; such a high cost is largely due to the inclusion of nuclear power plants in the energy mix, which are expensive to build. Lower costs were estimated for Scenario 1 (PLN 662 bn) and in Scenario 2, the investment costs were the lowest at PLN 375 bn. Despite the high investment costs, the LCOE for Scenario 1 was the lowest at 419 PLN/MWh. In Scenario 2, the cost was 435 PLN/MWh, and in Scenario 3, the LCOE was the highest at 465 PLN/MWh. A comparison of investment costs and LCOE for the different scenarios is shown in Figure 8 below. In comparison, in 2022, Poland spent PLN 119 billion on the purchase of fossil fuels such as natural gas and hard coal [10].

Each of the proposed scenarios achieves a carbon-free electricity system when using biomethane in dispatchable power plants; due to the very high consumption of biomethane in Scenario 2, this option is difficult to implement and is not recommended. If natural gas is used instead of biomethane in the scenarios, the emissivity would be 17 gCO₂/kWh, 148 gCO₂/kWh and 10 gCO₂/kWh, respectively. The possible use of natural gas in these scenarios involves the cost of purchasing CO₂ emission allowances, which would amount to 1.52 bn PLN/year, 9.1 bn PLN/year and 0.9 bn PLN/year for Scenarios 1, 2 and 3, respectively.

The current Polish Energy Policy assumes that the share of RES in the National Energy Mix will be 32% in 2030 and 40% in 2040 [20]. Simulations show that it is possible to obtain up to 100% of energy from renewable sources. Reports from a number of national and international institutions confirm that with the removal of political and formal barriers as well as investments in the transmission grid, it is possible to significantly increase the share of RES. According to the Instrat think-thank, 54 GW of RES sources such as offshore and onshore wind turbines and PV could be installed, and in 2040, the installed capacity of these sources could reach 98 GW, which would allow an annual production of 104 TWh of green electricity in 2030 and 172 TWh of green electricity in 2040 [57]. Similar results were obtained in the modelling of the Ember think-tank [58] and the installed capacity of RES sources according to the think-tank in 2030 could be more than 54 GW and around 128 GW in 2040, which would allow the production of 83.7 TWh of electricity in 2030 and 208 TWh in 2040, respectively. A publication by the Centre for Climate and Energy Analysis published in 2022 indicates that in the NEU’s climate-neutral scenario, the installed capacity of renewables in 2040 will be 84 GW [35].

At the same time, it should be pointed out that in 2021, due to a drastic increase in the price of energy raw materials, as well as the cost of purchasing CO₂ emission allowances, the price of electricity periodically exceeded 1300 PLN/MWh [34]. Currently, the prices of raw materials and allowances have decreased; thus, the price of electricity in Poland is lower and amounts to 411 PLN/MWh [59]. The LCOE of scenarios presented in this study is similar to the current wholesale price of electricity in Poland. In addition, according to the predictions of rising CO₂ emission allowance prices, the price of electricity, in the absence of investment in low-carbon sources, may rise to 738 PLN/MWh [34]. Simulation tools for the energy sector have been repeatedly used to analyse the electricity systems of many countries around the world. In 2019, using the EnergyPLAN tool, it was confirmed that it is possible to achieve 100% RES energy in the electricity sector of Germany [46]; similar conclusions were drawn from analyses on Ireland [60]. In addition, the authors of the publication indicated that there are several possible scenarios to achieve this goal. The authors of these articles additionally indicated that system upgrades are possible while keeping costs at an acceptable level. In their work, the authors analysed the possibility of the electrification of all sectors of the economy, thereby necessitating an increase in the volume of electricity production.

A study conducted by Pluta et al. [61] using the data from 2018 focused on improving Poland’s energy mix for electricity by 2050 looked at the ways to cut CO₂ emissions by at least 95% through nuclear power plants and power plants equipped with CO₂ capture and storage systems. Using the TIMES-PL model to keep costs low, the study found that both methods lead to significant CO₂ reductions. Also, for Poland, Suwała et al. [62] used the TIMES-PL and MEDUSA models to find the cheapest way to decarbonize the power system. They concluded that by 2050, most energy will come from renewables, but Poland will also need a significant amount of controllable sources (like nuclear or traditional plants with CO₂ capture systems) and energy storage.

4. Conclusions

Renewable energy sources will be the dominant technologies of the future, primarily including onshore and offshore wind farms as well as photovoltaics. The elaborated scenarios show that the energy transformation in Poland should be based on a mix of RES technologies supported by dispatchable energy sources and energy storage facilities. The simulation variants carried out indicate that under Polish climatic conditions, the key technology for the energy transition will be wind turbines installed onshore and offshore. The proposed variants indicate that the following two groups of technologies will operate in the power system of the future: classic, i.e., controllable, and renewable energy sources, i.e., with production dependent on meteorological factors. Ensuring the continuity of the energy supply, which in the long term will be generated mainly from renewable sources, requires a significant share of gas controllable sources and an effective energy storage system. The electricity system can also be supplied from nuclear power plants, but the use of these sources may increase the cost of electricity for consumers.

The proposed scenarios also show that from the point of view of optimizing electricity generation costs, the share of renewables in energy production should be as high as possible. In the absence of rapid implementation of investments in zero-emission technologies, and thus a further significant share of coal-fired power generation and a rapid increase in emission costs, the price of electricity may increase significantly in the coming years. The high carbon intensity of the Polish energy sector has and will continue to have an impact on industry, inter alia due to the increasing importance of the carbon footprint in industrial production, which must be reported. With high CO₂ emission allowance prices, the cost of electricity generation also increases significantly, which may translate into high electricity prices on the wholesale market.

Additionally, the progress in the field of RES sources will have a positive impact on entrepreneurship and competitiveness of the Polish economy. Increasing demand for equipment and construction of installations will positively influence the development of local enterprises. The introduction of innovative products will increase the competitiveness of the Polish economy. Thanks to the development of RES sources, it is possible to increase the share of foreign investments in the Polish market, e.g., investments in production facilities or development in research and development.

The use of the right mix of technologies makes it possible to ensure the country’s full energy sovereignty. Renewable energy sources together with available gas sources using locally produced biomethane or domestically sourced natural gas make it possible to ensure the security of energy supply. According to the currently accepted declarations in EU countries, by 2030, most EU countries will produce the vast majority of their electricity from clean sources. Poland will be the last of the large European economies to produce less than 50% of its energy from low- and zero-carbon sources by 2030. Taking into account the high variability and turbulent nature of environmental factors, in particular resulting from the impact of the war in Ukraine on the energy sector, as well as the variability of internal factors related to the implementation of ESG strategies by Polish companies, further research should be carried out using the proposed simulator, creating further, more detailed scenarios.

The elaborated study is burdened with limitations. This paper analyses the possibility of providing for Poland’s current electricity demand, which is bound to increase in future years. The simulator used in the paper to create the scenarios only considers one year of the defined scenario and does not take into account the transition from the current energy system. Many other models include a simulation of transition steps, which provides a picture of investment needs in particular years. The proposed scenarios took into consideration only the most important factors, excluding secondary factors, i.e., a number of important issues such as the cost of upgrading the transmission grid or the legal and locational constraints of RES sources. In addition, in all proposed scenarios, some energy, especially in the summer, is lost due to the lack of capacity or insufficient storage. Further studies should analyse in detail the costs of upgrading the electricity grid and the possibility of using the lost electricity in other sectors of the economy, e.g., for hydrogen production in electrolysers. The simplicity of the model used is a positive aspect, as this allows a larger potential audience to use the tool; in addition, it provides quick results, but it also means that final decisions on the strategy of future energy systems should not be based solely on the results obtained in the simulator.