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Polish power industry 2022 – on the verge of transition to hydrogen

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​​​​​by Piotr Mrowiec and Jakub Plebański

31 January 2022

 

One of the most interesting events marking the development of the Polish power industry was signing “the Polish Hydrogen Strategy until 2030” at the end of 2021. It is a strategic document setting the main objectives of the development of the hydrogen economy in Poland and the guidelines to achieve those objectives.


Polish Hydrogen Strategy


The strategy adopted by the Council of Ministers focuses on creating a hydrogen sector in Poland. The strategy’s main objectives are to implement hydrogen technologies in the power and heating industries; use hydrogen as an alternative transport fuel; support industry decarbonisation; produce hydrogen in new plants; transmit, distribute and store hydrogen in a smooth and safe manner; and create a stable regulatory framework for the hydrogen economy.


Importantly, the document introduces strictly defined objectives to be implemented in connection with the hydrogen strategy. The strategy provides for a 2 GW of installed capacity by 2030 to produce hydrogen and its derivatives from low-emission sources, processes and technologies, in particular electrolysers. Another task set by the Ministry of Climate and Environment is to create 5 “hydrogen valleys”, that is, areas of collaboration to promote the hydrogen economy through research and development as well as investment and implementation activities in certain regions of Poland. The Polish Hydrogen Strategy also envisages an adequate number of new hydrogen-powered buses, hydrogen filling stations and hydrogen bunkering facilities.


Hydrogen production potential in Poland


Poland is currently the third largest hydrogen producer in Europe and the fifth largest worldwide. The country produces annually approximately 1 million tonnes of hydrogen, all basically from fossil fuels. At the same time, the main objective of the Polish Hydrogen Strategy is to adapt the economy to the production of green hydrogen from renewable sources. Therefore, it is assumed that investment projects related to implementing clean hydrogen technologies will consume about PLN 2 billion (about EUR 440 million) by 2025. Electrolyser investment projects are expected to cost about PLN 9 billion (about EUR 2 billion) by 2030, whereas hydrogen transport costs to be incurred in the same period are estimated at about PLN 5.6 billion (about EUR 1.2 billion). Important measures supporting the hydrogen economy have already been initiated by e.g. the National Fund for Environmental Protection and Water Management, which has launched a programme of partially forgivable low interest loans for interested businesses. Also the National Centre for Research and Development bets heavily on Polish hydrogen technologies. It has implemented 89 hydrogen projects since 2016 worth in total PLN 350 million and the number of projects increased by 30% within less than a year, so the upward trend in the development of hydrogen projects is becoming ever more visible. 


Current legal framework for the hydrogen economy


There is currently no law specifically governing the hydrogen economy in Poland. However, the amended Fuel Quality Monitoring and Control System Act, whose provisions on the hydrogen economy will enter into force on 1 January 2023, introduces important changes in this respect. The key changes include extending the definition of fuel to include hydrogen and defining the term “hydrogen” itself. The legislator has also specified the obligations of hydrogen producers, such as testing the quality of hydrogen during its production and preparing the related documentation based on which the producer will have to issue a fuel quality certificate.


An interesting bill being processed in the Polish parliament is to amend the Geological and Mining Act with the aim to adapt its provisions to underground containerless hydrogen storage and thus to enable classifying such storage as public investment. What is noteworthy is that the bill proposes that no fees be charged for conducting containerless hydrogen storage business. This should help ensure the storage space required to effectively implement the Polish Hydrogen Strategy and stimulate interest of the largest possible number of businesses.


Waiting for a “Hydrogen Charter”


A key legislative package announced as part of the Polish Hydrogen Strategy is a “Hydrogen Charter”. Its ultimate purpose is to amend various currently applicable statutes, in particular the Energy Act, to bring them in line with the regulations of the hydrogen market. Lawmakers are also planning to adopt a statute on the support of hydrogen production from low-emission sources. This will go hand in hand with passing regulations designed to reduce the investment risk associated with implementing hydrogen technologies in Poland. The Ministry of Climate and Environment expects that all these solutions will be introduced in 2022.


Summary


As can be seen from the above, the hydrogen economy development attracts growing interest in Poland. What is important is that the hydrogen potential has also been recognised by the state authorities, who declare that they will take bold legislative steps to promote hydrogen technologies, especially those based on renewable energy sources. The Polish Hydrogen Strategy is a significant move in that direction. With the goal set at 2 GW installed hydrogen power capacity in 2030, Poland aspires to be among the European leaders in implementing hydrogen technologies in the economy.

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Jakub Plebański

Lawyer (Poland)

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