Poland

Coal and lignite are key strategic fuels for power generation in Poland, where indigenous supplies of these solid fuels have underpinned growth in electricity output. The contribution of coal and lignite to total power generation is dominant today, and is expected to be maintained in the medium term.

 Poland has hard coal reserves totalling 16.9 billion tonnes, mainly located in Upper Silesia and in the Lublin basin. Mineable lignite reserves amount to almost 15 billion tonnes.

 More than half of Polish power stations are over 25 years old, while about one quarter has been in operation for over 30 years. The lignite-fired power plants are among the newest, and are being refurbished to meet EU environmental standards. Poland has no nuclear power stations, but has plans to construct a new nuclear power plant by 2020.

 Several European energy companies, including VATTENFALL, RWE, EDF and GDF, are currently active in the Polish energy sector. They have a certain impact on energy production and distribution, and also exert an influence on the government’s privatisation policy. In fact, the energy policy pursued by the Polish government is centred on security of energy supply, with competitive cost structures, minimum environmental impacts and increased energy efficiency.

 According to the "Energy Policy of Poland until 2030" coal is expected to be used as the main fuel for electricity generation. The document envisages a reduction in the energy consumption of the Polish economy and a 19 % share of renewables in total energy consumption by 2020. Nevertheless, electricity consumption in 2030 is expected to increase by 30%, gas consumption by 42% and petroleum products consumption by 7%.

 Poland does not have significant reserves of oil and only modest natural gas reserves, although it may have great potential to exploit unconventional gas resources. The government has issued over 90 licences for shale gas exploration and reliable assessments are expected to be presented in 2012. However, initial analysis shows that Poland has huge shale gas deposits, stretching from the northern Baltic Sea coast to the eastern borders with Ukraine and Belarus, totalling over 5,000 billion cubic metres. Experts estimate that this amount could cover domestic needs for over 100 to 200 years. If these estimates were confirmed, it would change the fuel mix of the country and reduce energy dependence on Russia.

 As regards environment and climate policy, the EU Large Combustion Plants and Integrated Pollution Prevention and Control Directives (now combined under the Industrial Emissions Directive), as well as the EU Emissions Trading Scheme Directive, all require a reduction in emissions from Poland. Furthermore, in 2011 the transposition of the CCS Directive into the Geological and Mining Law is foreseen.

 Hard coal

 Poland is not only one of Europe’s traditional hard coal producers, but was once one of the world’s leading suppliers. In 1972, Poland became Europe’s biggest coal producer, with an annual output of 150.7 million tonnes. By 1979, it was the second largest coal exporter in the world, after the USA, selling 41.4 million tonnes in that year. Although its role as an exporting country was already declining in the 1980s, output was maintained at a significant level (e.g. 193 million tonnes in 1988) compared with other European countries. It was not until the political turnaround in the Eastern Bloc countries and the ensuing transition to a market economy system, that Poland began to experience the contraction in hard coal mining during the early 1990s that had begun in Western Europe two decades earlier. By 2002, production had fallen to 102.1 million tonnes. The decline in Polish coal’s competitiveness, compared with other fuels available on the world market, was having an effect, accompanied by a rapid fall in demand as a result of economic restructuring. Nevertheless, coal continues to play a major role, making a 55 % contribution to the country’s primary energy supply. Output in 2010 was 76.6 million tonnes, having fallen by 1.3 million tonnes since 2009. In 2010, the Polish coal industry employed a workforce of some 114,089 persons.

 Commercially workable hard coal reserves are located in the Upper Silesian basin and the Lublin basin in the east of Poland, with the Upper Silesian coalfield accounting for 93% of the total. The coal reserves in this region contain some 400 coal seams with thicknesses of 0.8 metres to 3.0 metres, about half of which are economically workable. Some 56% of the workable coal reserves consist of steam coal, while the remaining 44% are coking coal.

 All hard coal is deep mined at an average working depth of some 600 metres. Extraction is fully mechanised, with over 90 % of coal produced by long wall mining. The run-of-mine coal from underground operations contains discard and requires preparation. In the past, only coking coal was cleaned to meet international quality standards. The expansion of existing coal preparation plants, and the commissioning of new facilities in recent years, has led to an improvement in the quality of Polish steam coal, which now meets world market requirements.

 The coal mining industry and exporters have an efficient infrastructure at their disposal, with cross-border rail links to neighbouring countries and to Baltic Sea ports for export. These comprise Gdańsk, Świnoujscie, Szczecin and Gdynia. Among these terminals, only Gdańsk is able to load capesize vessels. Hard coal exports from Poland totalled 10.2 million tonnes in 2010, half of which was transported by land to neighbouring countries, while the remaining volumes were trans-shipped via the Baltic ports.

 In recent years, Poland has become a net importer of coal. In 2010, imports of coal amounted to 13.4 million tonnes. Imports were dominated by deliveries from Russia, with minor volumes originating from other sources, including the Czech Republic, Colombia and Kazakhstan.

 Most of the country’s natural resources, including coal, are in public hands and coal mining is still a state-run activity. However, in recent years, the State has debated and made decisions on the ownership of the Polish hard coal industry. In June 2009, LUBELSKI WĘGIEL "BOGDANKA", a steam coal producer operating Bogdanka deep mine in the Lublin basin, was privatised and entered the stock market. Its debut on Warsaw stock exchange was seen as a success. In December 2010, the Czech group EPH took over the hard coal mine KWK Silesia from KOMPANIA WĘGLOWA, the largest hard coal producer in the EU. The newly created company, PG SILESIA will resume coal production in 2012. The year 2011 appears to be a real milestone in Poland’s hard coal mining sector, with the listing of JASTRZĘBSKA SPÓŁKA WĘGLOWA (JSW), the largest Polish coking coal producer. After having reached an agreement with trade unions, the government announced its "green light" for the initial public offering of a minority share in JSW.

 Future ownership changes may involve other key players in the Polish hard coal sector: KOMPANIA WĘGLOWA S.A., KATOWICKI HOLDING WĘGLOWY S.A. and WĘGLOKOKS S.A., the biggest Polish coal exporter. The main objectives of the coal industry over the coming years are to overcome legal barriers that restrict access to new coal deposits, and to apply efficient, modern low-emission technologies in the mining and power generating sectors.

 Lignite

 Poland’s lignite deposits are exclusively mined in opencast mines. Two of these operations are located in central Poland and a third one lies in the south-west of the country. In 2010, total lignite production reached 56.3 million tonnes (15.2 Mtce), 99.3 % of which was used by mine-mouth power plants. Lignite-fired power stations generated 48.7 TWh of electricity, representing 30.9% of the total power generated in Poland.

 The Bełchatów basin, situated in the central part of Poland, incorporates two lignite fields: Bełchatów and Szczerców. In 2010, the Bełchatów mine produced 32.8 million tonnes (8.8 Mtce) of lignite, representing 58 % of Poland’s total lignite production. This required the removal of some 101.9 million cubic metres of overburden, which equates to an overburden-to-lignite ratio of 3.1 cubic metres per tonne. The depth of the mining operation in the Bełchatów field is about 300 metres and the average calorific value of the fuel is 7,960 kJ/kg. Bełchatów mine is expected to remain in operation until 2038. The lignite output is supplied entirely to a mine-mouth power plant, with a capacity of 4,440 MW. The power plant generates 27-28 TWh per year, covering about 20% of domestic power requirements. Built between 1981 and 1988, it presently generates the cheapest electricity in Poland. A new 858 MW unit is under construction at Bełchatów.

 In the Turoszów lignite basin, located in the south-west of Poland, the Turów mine has a production capacity of 15 million tonnes per year (4.1 Mtce). Reserves are estimated at 362 million tonnes (97.7 Mtce). In 2010, the mine produced over 10.2 million tonnes of lignite (2.7 Mtce), representing 18.3 % of Poland’s total lignite production, with a calorific value of 9,564 kJ/kg. Up to 96 % of the lignite is supplied to the Turów mine-mouth power station. This plant was modernised and upgraded to a capacity of 2,100 MW, making it the most modern in Poland. In 2010, some 42.3 million cubic metres of overburden were removed, giving a stripping ratio of 4.1 cubic metres per tonne. The mine is expected to be in operation until 2045.

 The Bełchatów and Turów lignite mines, as well as Bełchatów and Turów power plants belong to the vertically integrated, partly privatised power utility, POLSKA GRUPA ENERGETYCZNA S.A. (PGE).

 The Konin-Adamów basin, located in central Poland between Warsaw and Poznan, has been producing lignite for over 50 years. There are two active mines: Konin and Adamów.

 The Konin mine has a production capacity of 15 million tonnes per year (4.1 Mtce). Lignite is produced at three opencast sites: Józwin IIB, Kazimierz North and Drzewce. A fourth opencast mine, Tomisławice is presently under construction. Total lignite production reached 8.7 million tonnes (2.3 Mtce) in 2010. It required the removal of 51.8 million cubic metres of overburden, a stripping ratio of 5.9 cubic metres per tonne. The working depth at these pits varies between 25 metres and 80 metres. The extracted fuel has an average calorific value of 9,220 kJ/kg. The planned lignite production from the Konin mine is estimated to be about 215 million tonnes (58.1 Mtce). The Konin mine supplies lignite to three mine-mouth power plants: Paţnów I with an installed capacity of 1,200 MW, Konin (583 MW) and Paţnów II (464 MW).

 In the Adamów mine, three opencast pits are operated, named Adamów, Wladyslawów and Kozmin. Adamów mine’s overall production capacity is 5 million tonnes per year (1.3 Mtce). The depth of mining operations is between 40 metres and 70 metres. The deposits currently being exploited have workable reserves of 52.2 million tonnes (14.1 Mtce). In 2010, lignite production reached 4.4 million tonnes (1.2 Mtce), all of which was supplied to the 600 MW Adamów mine mouth power station. Some 26.4 million cubic metres of overburden was removed, which gives a stripping ratio of 6.0 cubic metres per tonne.

 The entire Konin-Adamów lignite basin generates 7.8 % of Poland’s energy requirements. The mines here are currently state-owned, but are expected to be offered for sale by the Ministry of Treasury. The Adamów mine is expected to remain in operation until 2023 and the Konin mine until 2040.

 The average productivity at Poland´s lignite mines was 3,450 tonnes per man-year in 2010 and employment totalled 16,332.

 Poland’s lignite mining areas are expected to maintain their annual production output at current levels of around 60 million tonnes, and lignite is expected to play an important role in Poland’s energy supply until at least 2030.

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Poland