Poland - Country Commercial Guide
Energy Sector

This is a best prospect industry sector for this country.  Includes a market overview and trade data.

Last published date: 2021-09-03

In 2020, Poland produced 152,208 GWH from primary energy sources, relying heavily on coal and fossil fuels. Hard coal, accounted for 47% of primary energy production in 2020, followed by lignite (24.9 %), natural gas (9.1 %), crude oil (1.6%) and renewables (10.75 %). More than 6% of Poland’s energy was produced by industrial power plants.

Leading Sub-Sectors

Power Generation 

  2019 2020
Gross Generation (TWh) 158.7 152.2 
Thermal (hard coal & lignite) 75%  71.9 
Thermal (gas) 7.6% 9.1 
Hydro      9%    10.75 
RenewabIe Industrial power plants le   7%  6.45 

The installed capacity of the Polish electric power system produced 49,238 MW in 2020, which was 5.2% more than was produced in 2019 (46,799 MW).  Poland’s share of installed capacity for hard coal and lignite was stable at 63.4% (31,225 MW).  Renewable Energy Sources (RES) accounted for more than 20% (10,229 MW) and constituted a 36.6% growth rate versus 2019 output. Poland’s natural gas capacity remained stable with a 5.65% share of total installed capacity (2,782 MW). 

Source: Polish Power Grid Company PSE 

Poland’s electricity production declined 3.8% to 157.7 TWh in 2020. Hard coal and lignite power production accounted for 70% of total electricity output of 109.9 TWh in 2020, a notable decline from 79.5% in 2018.   Production from Renewable Energy Sources (RES) continues its spectacular growth, particularly in prosumer photovoltaics. Solar power plants generated a 176% increase (2 TWh) and Co-firing of biomass with coal increased by 20% (to 2.2 TWh), which was supported by generous subsidies and the high price of CO2 emission rights. Green power plants, such as biogas plants (up 10% to 1.2 TWh) and hydroelectric plants (up 8% to 2.1 TWh) also increased their production output. The frequent use of pumped-storage hydroelectric power plants, Poland’s largest energy storage facility, increased by 16% (0.8 TWh). This was mainly due to the increased share of variable energy sources (wind and photovoltaic), which the transmission system operator had to balance with stored energy. 

In 2020, domestic electricity production declined to the lowest point in lowest in the past 6 years, which was a result of a substantial decline in coal power production.  The high price of coal and carbon credits made electricity production out of coal uncompetitive, and there may have been demand reductions due to the COVID-19 pandemic, though data points supporting this are not available at this time.  At the same time, electricity production based on natural gas and RES increased significantly.  Renewable capacity and production of electric power from RES have grown consistently for the past several years, exceeding 16 TWh in 2020.  Despite a 350% increase of photovoltaic installations and development of prosumer PV installations, Poland was unable to achieve the EU’s 2020 obligation to meet a 20% share from renewable sources in the final energy mix. 

The importance of gas in the Polish energy mix continues to grow.  Domestic production of this fuel has declined for several years, and demand has been replaced by imported gas. However, the progressive diversification of gas sources is clearly visible, mainly due to contracts for the purchase of LNG, mainly from Qatar and the United States. Imports from Russia account for less than 50% of Poland’s domestic gas supplies. Russian gas is scheduled to be completely phased out by the end of 2022. The decreasing trend in domestic hard coal exploitation, which has been visible for several years, continued in 2020 and accounted for a decline of 7.2 million tons, though the demand for thermal coal remains high. Imported coal accounts for almost 20% of Poland’s consumption because it is cheaper and of higher quality than Poland’s domestic coal resources.  In 2020 Poland imported 12.82 million tons of hard coal, with the top suppliers being: Russia (9.5 million tons in 2020), Colombia, the United States and Kazakhstan. 

Most Polish coal-fired power plants were built between 1960 and 1980, and now must be retired and replaced. Poland’s newest and the last coal-fired power plants are Kozienice (1,000 MW) and Opole (2x900 MW, Jaworzno (910 MW) and Turow (450 MW). Subsequent power plant investments in Dolna Odra (2 x 700 MW) and Ostroleka (750 MW) will utilize natural gas sources. Ostroleka is evidence of the transition from coal to gas, the plan was originally contracted as a coal facility, but the plants owners have committed significant capital to convert the half-finished project into a gas fired plant.

European Union Green Deal and FIT for 55 Package 

The European Green Deal aims for a 55% reduction of greenhouse gas emissions by 2030 (compared to 1990 levels) and full climate neutrality by 2050. For the energy sector and the Polish economy, it provides a chance to modernize, innovate and progress, including increased opportunities for investment. 

The EU budget for 2021-2027 provides $164.3 billion in subsidies and $40.3 billion in repayable aid for Poland (in current prices), thereby making Poland the biggest net EU fund beneficiary among all the member states. The Ministry of Development, Labor and Technology is currently finalizing a draft Partnership Agreement, i.e., the document specifying where Poland will invest its allocation of EU development funds. Poland will receive about €3.8 billion from the fund to mitigate the effects of energy transformation and moving away from coal, which will go mainly to the Silesia and Lesser Poland voivodships.

The Polish government estimates that the energy transformation requires about $250 billion. Adopted in February 2021, “The Energy Policy until 2040” (PEP2040) assumes that Poland will gradually reduce its use of coal, on which it is 70 percent reliant on. By 2030, Poland’s energy mix is to decrease to at least 56 percent reliance on coal. The share of renewable energy sources is to increase to no less than 23 percent by that time. According to an agreement which the government reached with coal miners, the last mine in Poland is scheduled to be closed in 2049.

Poland may receive nearly €13 billion from the new FIT for 55 fund. As part of the new climate package, the European Commission proposes to establish a new Social and Climate Fund. Its budget for 2025-2032 is expected to amount to €72.2 billion. Poland is to be the biggest beneficiary of the new instrument easing the costs of transformation. The new Social Fund for Climate Action aims to provide Member States with specific funding to help citizens finance investments in energy efficiency, new heating and cooling systems and cleaner mobility. The Social Fund for Climate Action would be financed from the EU budget with an amount equal to 25% of expected emissions trading revenues for fuels used in buildings and road transport. It will provide funding to Member States of €72.2 billion for the period 2025-2032, based on a targeted revision of the Multiannual Financial Framework. Thanks to the proposal to use equivalent funding from the Member States, the fund would mobilize €144.4 billion for a socially just transition, the Commission reads. In the years 2025-2032, Poland is expected to receive €12.7 billion from this fund, which constitutes 17.6% of the entire budget. 

Civil Nuclear Energy 

In 2009, Poland began developing its civil nuclear power program. Initially, the state-owned power company PGE-EJ1 envisioned construction of two nuclear power plants with a 3,000 MW output to be completed by 2035. The program has been delayed significantly due to government reforms. Construction of six nuclear power blocks with 6-9 GW of total capacity by 2043 is now being considered. The Ministry of Climate plans to launch operation of the first 1-1.6GW nuclear power reactor in 2033, with the remaining five reactors of the same design coming online every two years until the project is completed in 2043. Site characterization and environmental analysis were being performed by PGE-EJI’s successor company PEJ at selected sites in Zarnowiec and Lubiatowo-Kopalino and are expected to be completed at the end of 2021, and the reactor technology tender has yet to be announced. The Ministry estimates the cost of the nuclear power program at $40 billion and is looking for foreign technology provider to offer up to 49% of equity.   

On July 1, 2021, Westinghouse Electric Company has announced the launch of front-end engineering and design (FEED) work under a grant from the United States Trade and Development Agency (USTDA) “to progress” the nuclear energy program in Poland. FEED is one of the key elements in the implementation of the Intergovernmental Agreement (IGA) between Poland and the USA to cooperate on the development of Poland’s civil nuclear power program signed in October 2020. This 30-year agreement, the first of its kind, represents an enduring energy bond between the United States and Poland. The Agreement provides that over the next 18 months, the United States and Poland will work together on a report delivering a design for implementing Poland’s nuclear power program, as well as potential financing arrangements. This will be the basis for U.S. long-term involvement and for the Polish government to take final decisions on accelerating the construction of nuclear power plants in the country. 

The Polish government is considering conduiting research into High Temperature Gas Reactor (HTGR) technology in Poland. The plan is to create the special HTGR development center in cooperation with foreign partners who have experience with this technology. The first step would involve building a 10 MWt HTGR reactor in the National Center for Nuclear Research (NCBJ) facility for testing and licensing purposes, then developing commercial HTGR reactors that would provide heat for the chemical industry and energy for the electric grid in Poland.

Renewable energy 

In 2008 all the EU member states agreed to reach at least a 15% share of renewable energy (RE) by 2020. Poland’s share at that time had not exceeded 8% and after 12 years the country did not achieve the set goal. By the end of 2020 only 10.75% of energy was produced from the renewable energy sources (RES). Poland’s RES capacity totaled 9,475 MW in 2020 and it grew by 367 MW throughout the year. Wind power accounted for 65% of this capacity, followed by biomass, hydro, photovoltaics and biogas. Photovoltaics experienced the largest growth in 2020, reaching 708 MW.  Renewable energy laws strongly support prosumer activities, and individual producers of maximum 10kW power from the newly installed RES system are guaranteed tariffs for 15 years. For larger producers, the law introduced an auction system. Each year, the Ministry of Economy announces the amount of renewable energy it will need and announces the reference prices for each group. According to the assumptions of the National Plan for Energy and Climate for 2021-2030, the share of energy from renewable sources in the national mix will increase from 17.6% in 2025 to 21 percent in 2030. In 2016 Poland passed legislation knows as the 10H law, which functions as a de facto moratorium on new onshore wind investments by restricting zoning in all parts of the country. The government is currently considering loosening restrictions but the PEP 2040 plans for overall onshore production to remain at current levels of installed capacity.

As reported by Bloomberg Poland, Europe’s “coal heartland” is now the hottest market for green power. Poland plans to increase its renewable power capacity through the development of offshore wind farms. By 2027, Poland expects 6GW power capacity to be generated by offshore wind. Poland finalized its 2040 energy policy and looks to the world’s largest players in RE to help them develop the market. 


Poland is working its way to the top of the European ranks in photovoltaics. In 2020, 2635 megawatts (MW) of solar power output were installed in Poland – more than three times the number installed in 2019 (823 MW). This elevated Poland’s PV market position in Europe, following only behind Spain (2.7 GW), the Netherlands (2.8 GW) and Germany (4.8 GW), and all signs point to increased growth. The Polish solar market is set to grow by 35% annually, and in 2024, the total PV capacity is expected to reach 8.3 GW. This scenario is forecast by the European PV industry association, SolarPower Europe, in its latest EU Market Outlook. The Polish solar boom is happening at every level, from smaller privately-owned rooftop PV systems and commercial rooftop systems, to large free-standing installations. According to the Polish Society for Photovoltaics (PV Poland), the number of registered small-scale systems (below 50 kW) with an average capacity of 6.5 kilowatts (kW) grew from 155,000 (992 MW) at the end of 2019 to 457,400 (3 GW) at the end of 2020. These small-scale systems accounts for 75% of total PV power installed in Poland. Several larger PV projects, with capacity of approximately 4 GW, have received preliminary grid connection permits. 

In addition to the sharp drop in the cost of photovoltaics and growing environmental consciousness, the market is being driven by a whole raft of incentive programs (e.g., My Current - €230 million, Clean Air, Thermomodernization, etc.). An incentive program called Agroenergia with a budget of €50 million is specifically geared toward farmers and offers low-interest loans or direct subsidies for the construction of solar power systems between 50 kW and 1 MW.

The Polish government introduced strong regulatory support, and there are subsidies for PV systems for on-site consumption as well as for utility-scale facilities. The expansion of “balancing” programs, which is what the Polish call net metering, is an example of how small and medium enterprises support prosumers. 

Solar power systems with less than 50 kW also benefit from a reduction (23% to 8%) of Value Added Tax (VAT), plus purchase and installation costs for PV systems can offset income and reduce personal income tax. Additionally, state-supported auctions are used to fund large-scale installations. One of the winners of a recent tender back was for an investment project to construct a 200 MW solar park in the Pomeranian Voivodeship. 

Poland is starting to see some large solar projects that do not rely on subsidies, such as a 64 MW solar park which is being built in Witnica, close to the German border. The electricity generated there will be sold to a local cement factory through a multiannual power purchase agreement (PPA). In addition, a new factory producing battery cathode materials used in electric cars will be powered with 100-percent renewable electricity; a long-term supply contract has just been signed in Konin (Wielkopolska Voivodeship). 

Increasingly, large companies are relying on solar power for self-consumption, for example, a leading manufacturer of metal furniture in Suwalki in northeastern Poland, which has recently started meeting its demand using a 2 MW roof-mounted and free-standing installation on the company premises. 

Wind: Onshore and Offshore 

Poland’s onshore wind generation capacity development was restricted in 2016, when President Duda signed a bill making it illegal to build turbines within 2km of other buildings or forests, ruling out 99 % of Poland’s land area. Due to these changes, the installed capacity in wind generation grew only by 0.8%. Since then, the government has made plans to revise parts of the bill that hindered wind energy development and created a number of investment disputes between Poland and international investors.

There are more than 1,200 installations in Poland using wind as a renewable energy source. Their installed capacity is over 5,900 MW, which is about 65% of installed capacity in all types of renewable energy installations working in Poland. Nearly 160 further wind installations are under construction, with total installed capacity of approximately 2,500 MW. The amount of energy produced from wind sources and introduced into the Polish power system is systematically increasing. In 2020, they produced14,174 GWh of energy against 13,903 GWh in 2019. Wind energy accounted for about 10% energy consumed in the country in 2020. According to the Polish Energy Regulatory Office, producers of wind and solar energy have been the primary beneficiaries of the auction support system for renewable energy production operating in Poland for more than five years. The results of the eight auctions decided in 2020 by the Energy Regulatory Office translated into nearly 54.5 TWh of capacity contracted for over $3.4 billion. And the increase in energy production from the auction system is an important mechanism to fulfill the renewable energy target assumed for Poland. 

In order to meet 21% of RES in 2030, the Polish government is planning an extensive offshore wind farm development. The PEP Road Map 2040 provides for visible participation of offshore wind in Poland’s 2027 energy mix, meaning the first mature projects should appear even around 2024. In the 2040 prospectus, the strategic document sets a potential of 10.3 GW. A draft law on the promotion of electricity generation in offshore wind farms published in January this year provides for the first auctions to be conducted by the President of the Energy Regulatory Office in this sector as early as 2023. Companies controlled by the Polish State Treasury will have a dominant share in the development of offshore wind farms. Investments in offshore wind farms are carried out by companies such as the Polish Energy Group, PGE. By 2030, PGE and their Danish partner, Ørsted intend to erect wind farms with 2.5 GW on the Baltic Sea. Another state group, PKN Orlen, also has concessions for the construction of a 1.2 GW offshore wind farm and is in the process of searching for a business partner to carry out the planned projects. PEP 2040 predicts that 55.2 TWh of energy will be produced from wind only. The Polish Wind Energy Association (PSEW) estimates that the Polish energy system will require 1,000MW of newly installed wind energy capacity each year to comply with EU targets.

Transmission and Distribution Network

Poland’s electrical transmission network is in good technical shape and the average age of Polish transmission lines is less than 40 years.  Expanding and upgrading of Poland’s electricity transmission network is a key element to meet its EU goals of increasing renewable energy sources, improving energy efficiency, and better integration into European transmission networks.  In 2019 and 2020, all six transmission and distribution companies spent over $2 billion for investments, including $34 million for innovations. The Polish state-owned transmission system operator PSE spent $380 million for transmission grid development and modernization.  From 2019 to 2027, PSE plans to spend $3.2 billion to expand and modernize the Polish grid, with $1.25 billion support taken from the EU Operational Program Infrastructure and Environment.  PSE plans to introduce 8 GW of power from offshore wind farms into the system by 2027 and to prepare for construction of power lines for the nuclear power plant.  PSE investment plans include building of about 4,300 km of new 400 kV lines and upgrade another 800 km of 400 kV, along with 1,400 km of new or upgraded 220 kV lines construction of nine new transformer stations and modernization of 23 existing stations.  PSE has signed an agreement with Lithuanian transmission operator, Lit grid, to build Harmony Link, an undersea HVDC cable that would link Poland and Latvia and make Baltic states power system synchronized with European. 

Investments undertaken by five system operators for distribution grid expansion, upgrade, automation and cyber security are also substantial. In 2019 alone, their total investment spending totaled nearly $ 1.6 billion, including $550 million spent by PGE, $450 million spent by Tauron, $300 million spent by Energa, $300 million by Enea and $50 million by Innogy.  Thirty investment projects related to electricity transmission, and 188 projects in electric energy distribution with a combined value of $ 3.6 billion, have been co-financed by EU cohesion funds within the Infrastructure and Environment Program between 2014 and 2020.  

Smart Grid 

According to the draft of Poland’s Energy Law, Poland plans to install smart meters at 80% of end-users by 2026.  Currently, smart meters are installed at 11% of end-users. The initial phase of installing smart meters in Poland took place between 2011-2015, but the process has since slowed. The reason behind this slowdown was a lack of applicable legislation that would obligate Distribution System Operators (DSOs) to implement Advanced Metering Infrastructure, and lack of regulator actions enhancing such activities.  Introduction of capacity market in 2018 forced DSOs to install intelligent meters that enable remote data read-out. Among the five DSOs, Energa is the most advanced in Advanced Metering Infrastructure (AMI) implementation with installation of meters for 30% of their clients.  Energa has invested $500 million in smart grid development by 2020.  During next three years, Energa plans to introduce smart grid in their entire territory, which covers 25% of Poland’s area. The project worth $60 million is to modernize the low voltage grid using EU funds. Tauron has installed 350,000 intelligent meters in Wroclaw (Smart City Wroclaw), and Innogy 100,000 units in Warsaw.  PGE, the largest DSO, has been performing project of 50,000 meters in Bialystok and Lodz.  Enea signed contract for introducing intelligent grid in Szczecin and Swinoujscie in December 2019. PGE, Tauron and Enea have together conducted several tenders for purchasing of smart meters.

According to Poland’s calculations, the installation of smart meters for 80% of end-users by 2026 will cost $1.2 billion.  EU Infrastructure and Environment funds will cover $300 million of the cost spent by DSOs for grid infrastructure development, smart grid development, intelligent meters, grid automatization and energy storage systems construction. The high and medium voltage distribution lines are primarily automated while low voltage systems, which are most common in Poland, still require automation updates.  

Energy Efficiency

According to Poland’s Energy Policy by 2040, energy efficiency is one of three major energy priorities. A system of white certificates that award energy efficiency, investments, and expansion are an instrument for incentivizing energy efficiency in Poland. This system is required for the consumer utilities selling electricity to the end-user market. The system is available for all projects that meet specific criteria. To receive a white certificate, a company needs to send an energy efficiency audit to the Office of Energy Regulation. Energy efficiency audits are required for companies with more than 250 employees. EU funds dedicated to improving energy efficiency have allowed the energy market in Poland to grow over the last decade, advancing the thermo-modernization of buildings, street lighting, and industrial processes. The EU has allocated €6.8 billion to support the low carbon economy in Poland. This includes €3.8 billion available from the European Regional Development Fund and €3 billion from the Cohesion Fund, which includes the Environment and Infrastructure Program. The EU may also fund the production of electric energy, including co-generation, electricity transmission and distribution, including the smart grid; energy modernization of public buildings and housing; and increased energy efficiency in factories. Other financing dedicated to such projects include: The National Fund for Environmental Protection, made up of subsidies and preferential credits; EBRD; and EU PolSEEF, which includes preferential credits. 

Energy Storage 

In May 2021, Polish policymakers removed legal and regulatory barriers that prevented the development of the energy storage industry. The Polish Parliament adopted an amendment to national Energy Law concerning the treatment and definition of energy storage, with 443 members of parliament voting in favor of a bill, only three opposing it and no abstentions. The comprehensive regulations open the possibility of using energy storage facilities in various areas of the power system, the new rules cover electricity storage system licensing and eliminate tariff obligations, which were “double charging” energy storage systems connection to the grid. 

The new rules incentivize energy storage by reducing the fee payable by owners and operators of energy storage assets for connecting to the grid. The new rules create an opportunity for Poland to create a broad energy storage industry, PSME’s president said, from the development of technologies and products to the creation of jobs. 

State-owned public power company PGE has said that in targeting carbon neutrality by 2050 it is planning at least 800MW of energy storage deployments by 2030. According to figures quoted by PSME, the number of prosumers in Poland has increased from about 4,000 at the end of 2015 to more than 450,000 by the end of 2020. 

The country will introduce auctions for hybrid renewable installations, such as facilities combining at least two renewable energy systems and an energy storage facility with a utilization factor of at least 60%. This year resources for small scale projects (1MW or less) totaling 5MW and larger installations totaling 15MW are expected to be tendered in a pilot auction. 

Natural Gas 

According to 2019 data, Poland relied on Russia for its gas supply, as Russia’s Gazprom controls 56% of the country’s gas consumption. The rest is covered by domestic production (23%), EU imports (15%), and LNG imports (6%). Poland seeks to become energy secure, as well as diversify its gas sources before its contract with Gazprom expires at the end of 2022.  As such, Poland is in the process of building gas infrastructure to become more energy independent and meet growing consumption.  Poland began this process with its first LNG terminal in Swinoujscie in 2015.  Since then, Poland has also increased its imports of LNG from Qatar and the United States.   

Poland’s LNG terminal in Swinoujscie is the first onshore regasification facility in the Baltic Sea region.  This facility receives shipments from a Qatari supplier under a long-term contract, as well as a series of auxiliary deliveries secured via the spot market.  In November 2017, PGNiG signed a five-year contract with Centrica LNG Co. This contract allows the deliveries of U.S. LNG from Cheniere Energy’s Sabine Pass LNG Terminal in Louisiana.  In 2018, PGNiG signed other long-term contracts for U.S. LNG that include 20-years contracts with: Sempra for 2.7 BCM, Venture Global Calcasieu Pass LLC and Venture Global Plaquemines LNG LLC for together 2.7BCM and Cheniere Marketing International 1.95 BCM of degasified LNG yearly. Deliveries will start in 2022-2023. In 2018, the Polish government made the decision to increase the LNG terminal’s capacity by 50%, giving the terminal 7.5 BCM. The tender was announced in the beginning of 2019 and was recently concluded. From 2023, PGNiG will have at least 7.45 million tons of liquefied gas, which is more than 10 billion cubic meters of natural gas. Such quantities of LNG will strengthen the company’s position on the market for this fuel and will contribute to the increase of gas supply security of Poland. 

PGNiG is currently in the process of building Baltic Pipeline which will to carry gas from Norway to Poland. This pipeline is scheduled to be operational by October 2022.  The European Commission recognizes Baltic Pipeline Project as a ‘Project of Common Interest’ (PCI). The EU is providing support funding to Baltic Pipeline because it strengthens the European internal energy market by securing more affordable, secure, and sustainable energy sources.  When completed, Baltic Pipeline will account for 43% of Poland’s gas consumption. Poland expects to receive another 37% via the expanded LNG terminal, which will receive imports from a variety of sources, including the U.S.  In addition, the Polish government is planning to purchase of two Floating Storage Regasification Units (FSRU); the first will be located in the bay of Gdansk with plans for possible expansion. This investment will allow Poland to accept delivery of between 4.1 and 8.2 billion Nm3 of liquefied natural gas per year to Poland. In addition to transporting liquefied gas, the tanker would also enable reloading and bunkering (refueling) of LNG-powered vessels.  


  • Energy Information Administration 
  • Ministry of Climate and Environment 
  • Energy Regulatory Agency
  • Energy Market Agency 
  • Polish Committee of Electric Energy
  • Association of Polish Power Plants 
  • Polish Association of Professional Combined Heat and Power Plants 
  • Polish Power Transmission and Distribution Association 
  • Chamber of Industrial Power Plants and Energy Suppliers 
  • Polish Chamber of Power Industry and Environmental Protection 
  • Association of Energy Trading 
  • Polish Wind Energy Association 
  • Polish Economic Chamber of Renewable and Distributed Energy 
  • Polish Offshore Wind Energy Society 
  • Polish PV Association 
  • Chamber of the Natural Gas 
  • Polish Energy Storage Association