Poland's Transition to a Market Economy Prospects for Energy Efficiency and Conservation (1994) / Chapter Skim
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PART I: ENERGY EFFICIENCY AND CONSERVATION POLICY
PART I: ENERGY EFFICIENCY AND CONSERVATION POLICY
Pages 5-58
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From page 7... ...
The energy crisis of ~ 973 brought about new research on complex energy problems that included consideration of energy conservation activities and substitution of energy carriers. At this time, research activities aimed at improving the efficiency of the whole energy economy including energy supply policy, energy conservation policy, and environmental policy.
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From page 8... ...
2. STRUCTURE OF CURRENT INSTITUTIONAL SUPPORT FOR ENERGY POLICY The primary institution in the Polish government for creating and implementing energy policy is the Ministry of industry through the Energy Economy Department.
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From page 9... ...
Actually, more support for such activities is coming from other Ministries, especially the Ministry of the Environment, the Central Planning Office, and the Ministry of Building. The Central Planning Office has organized a program for Rational Energy Policy, which aims at providing a basis for optimization of decision making processes in the energy economy during the transition period.
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From page 10... ...
for institutional development throughout Poland. Another debate involves the application of scientific research to methods for optimal decision making on energy policy, energy conservation policy, and environment protection policy.
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Fig. 1 Government Support for Energy Conservation during the Central Planned Economy 11
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Ministrv of Industrv , , 1 | Fuel and Energy Department | 1 1 1 l Energy & Energy Information Control Division Division r ~ Energy Fuel & Energy Policy Consumption Division Division Investment Fig. 2 Organization of Actual State Support for Energy Economy 12 Energy Equipment Division I ~For!
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3. Organization of Energy Economy Activities in the Central Planning Office 11 13
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4. Institutional Support on Energy Conservation in Ministry d Environment Protection 1 14
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This report discusses the role of the government in creating energy efficiency policy at various levels. It presents key recommendations regarding current energy efficiency initiatives.
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2. GOVERNMENT ENERGY EFFICIENCY POLICY Policy Goals The government's current policy for reforming the energy sector consists of the following elements: market pricing of energy supplies, energy supply sector restructuring, decontrol of hard coal production, privatization of transmission and distribution networks for electricity, gas, and heat supply enterprises and changing the way that they are regulated, and privatization of energy suppliers.
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From page 17... ...
and gas development long-term price parity for household and industrial consumers of network heat long-term semi-decontrol of network deliveries of electricity, natural gas, and heat Elimination of energy subsidies, including: budget subsidies for heat and electricity producers lower prices for household gas, electric, and heat services Sector restructuring, including: commercialization and eventual privatization of coal mines creation of an electric transmission grid company creation of electric generation companies, which will bid to supply power to the grid commercialization of electric power distributors commercialization of gas distributors commercialization of heat (listributors unification ant! commercialization of lignite mines and mine-mouth lignite power plants 17
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From page 18... ...
The role of the government is to take initiatives. These include: removal of market barriers, specific programs including, information programs, energy management.
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From page 19... ...
Helping schools cut energy costs by providing emergency energy assistance to schools and municipalities. Taxing motor fuels to support consumer programs by imposing a 5% tax on liquid fuels to reduce future national of} use by 2-4%, and to raise $125 million per year for use in energy efficiency and consumer protection efforts.
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From page 21... ...
The universities also participated in research projects financed by Ministry of Higher Education or by industrial enterprises. This paper contains an overview of industrial energy efficiency policy including: government activities on energy policy specific government programs sectoral industry -- C7J r ~J 7 -r ~.~ programs, issues relating to program financing, implementation of energy policies, the role of universities and other research centers, and requirements for application of research results in industry.
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From page 22... ...
2. ENERGY POLICY AND INDUSTRIAL ENERGY EFFIC~NCY POLICY Industrial energy efficiency policy became a concern of government policy makers in Poland more than 30 years ago when the first Energy Management Act was enacted and the Head inspection Ounce on Ener`~ Management was set up.
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From page 23... ...
, development of procedures for estimating the effectiveness of energy policy and for assuring its continuous improvement, and determination of appropriate governmental intervention in energy management realized by energy producers and energy users. The responsibilities of the central energy institution should be specified by the Prime Minister or by the Ministry of industry.
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From page 24... ...
a competitive utility program for energy efficiency, an energy efficiency investment fund, labeling of energy devices for consumer information, a fuel tax for environmental protection, energy assistance for urban and region energy management, including the schools provision for energy audit involving: gathering of data, examining the production units of various energy carriers, taking measurements necessary for a comprehensive material and energy balance statement, evaluating potential energy and costs savings, formulating ener~v savings cronosals Reincluding investment costs and energy savings) , ~C7J ~1 1 ~ extension services to promote use of the above mentioned energy efficiency fund, creation of an interim utility tariff schedule favoring energy efficiency investment, coupled with incentives for utility companies to procure energy efficiency equipment, and legislation to impose some percent energy tax on liquid fuels, with authority to transfer the revenues to an energy efficiency fund.
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From page 25... ...
utilization of energy, energy measurements, automatic control, energy aucliting, energy management, energy economy, energy policy, environmental protection through increased energy efficiency, clevelopment of energy-eff~cient technologies, and planning of national and regional energy systems. Some areas of energy education require (levelopment, integration, and evolution in response to our changing political and economic conditions: methods for developing and establishing comprehensive energy management, modern energy auditing, energy demand forecasting, energy system planning using least-cost methods, energy management control systems, 25
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From page 26... ...
These projects are not subordinated to a strategic program. Such projects are of course useful, but they do not solve the problems necessary for supporting decisions related to strategic goals and directed towards improving energy efficiency for reducing energy consumption per unit of GNP.
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From page 27... ...
imports from the USSR intrinsic connections between various establishments of the energy sector, and Tow energy prices, regulated at two levels: one for industry ant! another for individual consumers.
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From page 28... ...
to control energy consumption. The transition period from a centrally planned economy to a market economy in Poland is characterized by rapid price increases for all energy carriers.
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From page 29... ...
The transformation of the Polish economy from a centrally planned to a market economy requires that domestic prices for energy carriers be adjusted to the real costs of their production or purchase. Our ability to choose the best way to change from the previous system of cheap energy to world market prices is limited presently by the poor state of the Polish economy.
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From page 30... ...
Primary Energy Consumption Figure I Million Metric Tons 1 60 1 50 _ 1 4 0 1 30 1 2 0 _ in Years 1988, 1989 and 1990 '1O.~t 90 Natural has Bil umr~ous Coal Lignite Natural Gas in Billion Cubic Meters 30
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From page 31... ...
...................... Electricity kWh 16072 7060 31351 10779 28700 USA 1586 6344 6280 8811 20333 943156 4063 393 4101 4912 Equivalent of the monthly wages in industry in quantity of basic energy carriers {retail prices)
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From page 32... ...
Figures 4.5 4 3.5 3 Thousand 2 5 Zlotys 2 1.5 n.s Prices for Heating (Households)
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Figured 5 4 Thousand 3 Zlotys 2 1 Prices of Liquid Fuels 6 Jan-June July-Dec Jan-June July-Dec Jan-June July-Dec 1 989 1 989 1 990 1 990 1 991 1 991 | · Ethylene 86 in zI/!
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From page 34... ...
Figures 300 280 260 ~ 240 ~ 220 ~ 200 180 Thousands zIOlys140 -i 20 ~ -iOO ~ 80 60 40 20 0 1989 \\\\] Bituminous Coal Prices Cat' / tOO~ ~> ~ , \ \\ \; , quartal 1990 ~VI!
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From page 35... ...
Figured Cost Items Unit 1 1 1'9'9 1'990 Cost of electricity production bin zl 1432.211529.1 Cost of electricity use for bin zl 28.2253.3 other purposes Non-electroenergy systems bin zl 63.7160.3 (electricity industry + imports) Cost of electricity delivery bin zl 1467.711276.3 into the grid Cost of transmission bin zl 464.94013.1 Cost of sale bin zl 85.3508.6 Cost of electricity export bin zl 8.536.9 Other costs bin zl 17.180.0 Total bin zl 2043.516075.3 Variable costs bin zl 816.26619.7 Fixed costs bin zl 1227.39455.4 U~ _~Y TWh 113.5105.3 Cost of unit thous.zl/MWh 13.0152.7 1 99 1 (prognosis)
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From page 36... ...
Figure7 Cost of natural gas Costs No ItemsUnit |1989 |1990 1. | C sts of domestic production| bin zl |62.3 |572 2.
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1 597 -756 296 276 1413 1 .5 942.0 Table: Cost of Low Grade Natural Gas 37
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From page 38... ...
Figure9 Cost of Lignite Production Costs Items | Unit | 1989 | 1990 1. Materials - bin zl 24.1 331.2 2.
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From page 39... ...
Figure! O Cost Items Unit 19891990 Materials bin zl787.65312.0 Wages with surcharges bin zl2195.19244.1 Depreciation bin zl87.81012.5 Reconditioning bin zl201.1968.5 Energy bin zl207.31818.1 Transportation bin zl45.3172.7 Drilling and supplementary labor bin zl354.51564.2 Cost of sale bin zl689.3579.6 Other costs bin zl1336.06253.1 Total bin zl5904.026924.8 Production min t147.4147.4 Cost of unit thous.zl/t33.8185.9 1 99 1 (prognosis)
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From page 40... ...
Figure! ~ 900 800 700 600 500 400 300 Ziolys/Cubic Meters 200 100 0 _ Price of Natural Gas a 19 1 b ~ 1 988 b ~a 19 30 b a 1 969 b a- Industry 40 b- Houshcholds
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From page 41... ...
Figure! 2 ZIolys/kWh Price of Electricity 220 210 200 90 80 70 ~ 60 ~i 50 -i 40 ~i 30 '20 ~ ~ O 1 0 0 90 80 70 60 50 40 30 20 1 0 o a 1 89 b a 1 90 b a \~ 91 b a - Industry 41 b - Households
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From page 42... ...
Figurel3 100 90 ~ 80 70 _ 60 ~ 50 40 ~ 30 20 10 ~ o Share of Imported Energy in Prime it Ed reran Cll ~" in Poland .1 _ _ a 1 990 b \\ a 198 ~ b a - Crude Oil a 198 9 b b- Natural Gas 42
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From page 43... ...
Figurel4 34 32 30 28 26 24 22 20 18 16 14 12 10 Million Tons,Cubic Meters,GWh 6 4 2 o Energy Export & Import Balance \ , in Year 1988, 1989 and 1990 )
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From page 44... ...
Figure! 5 100 90 80 70 60 50 30 20 10 Structure of Primary Energy Use in Poland 1 988 | 13 Bituminous Coal ~ L gaits ~ D : :::: :: ::: :::::::: ::: ::::::: , .,..,., aft, ..,,,,.,,, ..~ ~,.
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From page 45... ...
INCREASING IMPORTANCE OF ENERGY FOR PEOPLE As Poland's economy modernizes and grows, the demand for energy services for people is likely to rise quickly, as it has in other countries, including the United States. Demand for energy services could be accompanied by an increase in energy demand, as it was in the United States before 1973, or could be achieved with absolute reductions in energy consumption, as is likely to be the case in California and perhaps the rest of the U
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From page 46... ...
As seen in Figure 7, the energy intensity of California's building sector declined 213% from 1978to 1988, compared to only 12% for the rest of the ration. The "rest ofthenation" includes other states that took independent action to improve the efficiency of their buildings, so a comparison between California and regions affected only by national energy policy would likely show an even larger difference.
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From page 47... ...
Increases in mass transit usage by one passenger kilometer appear to reduce overall VKT by 4 to ~ vehicle kilometers or more, by affecting land use patterns. Thus, national policies and economic incentives to encourage high density and mass transportation appear able to reduce energy consumption substantially at any given level of vehicle efficiency.
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From page 48... ...
Raising energy prices is an important component of a rational energy strategy. However, it is not the only component needed, or even the most important one.
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From page 49... ...
Thus, it is plausible to project significant reductions in energy consumption for Poland based on the adoption of policies that have proven to be politically feasible and economically workable in other regions.
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Figure 3 =~D -~:'=~ 1' l4~ _1 ~ ~ Al t~ n 1988 1991 2000 2010 52 2030 Reference scenario Market scenario Environmental scenario Climate Stabilization scenario
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Figure 4 l:~ ~3 1988 1991 2000 2010 53 2030 Reference scenario Market scenario Environmental scenario Climate Stabilization scenario
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Figure 5 -- _ __ ., Irk- war ~3 I_ _~ ^^ - .
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From page 55... ...
4~ ............................................................................................................................................................. 2i O- , I I I I I - ~ - I (, I' l I I I 1 (373 1 975 1 977 1 979 1 981 1 983 1 98Ei 1 987 1 974 1 976 1 978 1 9~30 1 982 1 984 1 986 1 988 Total Energy Use per GNP, California versus Rest of United States, 1973 to 1988 .
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From page 56... ...
1 978 56 ~ 979 1 980 1 981 1 982 1 983 1 984 l 1 985 1 SSS 1 987 1 988 Energy Intensity of Building Sector, California versus Rest of Nation, 1978 to 1988. Sources: Borg and Briggs 1988 for California residential and commercial sector energy, U.S.
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From page 57... ...
Per Capita Electricity Use in California and the United States, 1978-1988. California's building and appliance standards and progressive energy policies have significantly reduced per Capella elecmc~ty use over the past decade.
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From page 58... ...
eBo. 60.000 1 Rela~ion of Resiclential Density to VMT Per Resident 30 c 2 a)
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