THE HEAT ENERGY MARKET IN POLAND

The basic feature of companies from the heating services sector is that they operate locally. Individual heat sources and networks have a local range and, therefore, unlike in the case of electric energy or gas, there is no internal heat market in Poland.

Poland belongs to the few European countries with a substantial share of heat from existing heating systems in the total heat supply. According to estimates, approx. 42% of heat used for heating is generated by heating systems.

In 2014, 451 enterprises with licenses for activities related to the supply of heat, issued by the President of the Energy Regulatory Office, operated on the regulated heat market. The majority of the licensed heating enterprises were integrated vertically and dealt with generation, distribution and trade in heat, hence they held licenses for various heat-related activities. In 2014, 14.2% of surveyed enterprises were engaged in all types of licensed heating activities, 65.2% of enterprises combined production of heat with its transmission and distribution, 8.4% focused solely on production, while 12.2% of them dealt with transmission, distribution and trade in heat. Certain enterprises from the latter category generated heat in their own sources that are not subject to licensing (with total installed power output not exceeding 5 MW). 91.1% of all surveyed enterprises produced heat, while 86.4% provided distribution services.

Structure of installed power output of heating enterprises in 2014:

Structure of installed power output of heating enterprises in 2014

Source: Energy Regulatory Office [URE]

On the local heat market, the recipient is not free to select the enterprise to provide it with a heat-carrying agent with specific parameters via a network, and the supplier has limited possibility to solicit recipients, which results from prevailing technical conditions (range and parameters of existing networks) as well as economic factors (high capital intensity of construction of new network sections and network development).

Structure of heat production per fuel in 2002 and 2013 and 2014:

Structure of heat production per fuel in 2002 and 2013 and 2014

Source: Energy Regulatory Office [URE]

In 2014, basic fuels used for heat production were hard coal and lignite. Nevertheless, the share of heat derived from coal has been on a decline, standing at 75.1% in 2014. The share contributed by heat generated as a result of biomass combustion is going up, and equalled 7.8% in 2014.

The structure of fuels utilized to produce heat was by far more differentiated in the group of licensed enterprises that produce heat in the cogeneration process. The dominant source of heat in enterprises that do not apply cogeneration methods was invariably coal (87.4% share).

Also, shares of different fuels in heat production are highly differentiated in geographical terms. In six voivodships over 90% of heat was produced from hard coal, namely in the Świętokrzyskie (93.3%), Małopolskie (94.0%), Opolskie (95.1%), Warmińsko-Mazurskie (93.7%), Lubelskie (93,6%) and Podlaskie (92.5%) voivodships, while in the Lubuskie voivodship hard coal was used to manufacture only 11.4% of heat, whereas 83.6% of heat was derived from natural gas. Substantial quantities of natural gas were used to produce heat in the following voivodships: Mazowieckie (12.9%), Pomorskie (16.3%) and Podkarpackie (9.9%). The Kujawsko-Pomorskie and Pomorskie are the two voivodships with the highest shares of heat produced from biomass in Kujawsko-pomorskie (28.7)% and Pomorskie (14.9)%, respectively.

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Structure of heat prices per used fuel in 2012-2014:

Structure of heat prices per used fuel in 2012-2014Source: Energy Regulatory Office [URE]

In 2014, the average selling price of heat produced in non-cogeneration facilities belonging to licensed enterprises grew by 7.3% for hard coal, 5.2% for gas fuels, 13.6% for fuel oil and 4.6% for heat produced from renewable energy sources (RES) including biomass.

THE WASTE MARKET IN POLAND

Municipal waste in Poland – historic and projected data:

Year Type Volume

thousand Mg/year

TOTAL
2004 Sorted and separately collected municipal waste 243 11 802
Waste from gardens and parks 326
Mixed municipal waste 10 417
Waste from markets 114
Street cleaning residues 251
Bulky waste 451
2010 Sorted and separately collected municipal waste 1 096,7 12 174,1
Waste from gardens and parks 341,7
Mixed municipal waste 9 870,5
Waste from markets 120,5
Street cleaning residues 266,2
Bulky waste 478,5
2014 Sorted and separately collected municipal waste 1 701,2 12 290,2
Waste from gardens and parks 334
Mixed municipal waste 9 640,1
Waste from markets 117,9
Street cleaning residues 276,9
Bulky waste 497
2018 Sorted and separately collected municipal waste 2 341,8 12 962,8
Waste from gardens and parks 331,3
Mixed municipal waste 9 367,4
Waste from markets 116,9
Street cleaning residues 287,9
Bulky waste 517,5

Source: The 2010 National Waste Management Plan

Poland’s needs in terms of sorting and treatment of mixed municipal waste exceed 9 million tons per year, which requires the opening of several dozen regional waste treatment facilities.

Once sorted, such waste may be used to derive from 25% to even 40% of its combustible fraction that is fit for energy use. EU waste directives require waste-to-energy conversion in case of non-hazardous and non-inert waste with gross calorific value above 6 MJ/kg of dry weight.

The Act on Maintaining Cleanliness and Order in Municipalities obligates the municipalities to reduce the weight of landfilled biodegradable municipal waste against the weight of such waste produced in 1995 to:

• 50% – by July 16, 2013,

• 45% – in 2016,

• 40% – in 2018,

• 35% – by July 16, 2020.

Furthermore, the Act imposes an obligation on the municipalities to increase recycling of the following municipal wastes: paper, metals, plastics and glass, to:

• 12% – in 2013,

• 16% – in 2015,

• 20% – in 2017,

• 30% – in 2018,

• 40% – in 2019,

• 50% – in 2020.

In coming years, all the above factors will considerably contribute to the formation of new segments of the waste management market in Poland, including the waste-to-energy segment.