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Forecast: The new Polish government's energy policy

The energy policy of the new Polish government will be conservative and cautious. Instead of a bold vision to accelerate the transformation, crisis management will be implemented.

Goals and challenges

On the 13th of December 2023, Donald Tusk's government of four parties - the Civic Coalition, Poland 2050, the PSL and the New Left - was formed. In terms of energy policy, the new government has three objectives: 1) accelerating the energy transition to unlock EU money, 2) limiting the rise in energy prices and the social costs of decarbonisation, and 3) avoiding a blackout. Achieving these goals will not be easy, and here is why:


Firstly, Donald Tusk's government will be significantly weaker than the previous one. The new coalition consists of four parties with different interests, different electorates, and different political identities. In the election campaign, all parties advocated accelerating the energy transition, but there was no agreement on how this should be done. Conflicts over the pace and radicalism of energy change due to a lack of existing policy agreements could politically divide the new coalition and contribute to its disintegration.


Secondly, the new government is facing cohabitation with President Andrzej Duda, who will remain in office until August 2025. Duda can block all the laws presented by the new government. To reject his veto, a two-thirds vote of the Sejm will be needed, which the new coalition does not have. As a result, the President will be able to effectively block progressive changes in energy policy. He has spoken out against RES and supported investment in coal in previous years.


Thirdly, Poland is entering an election marathon period, with local elections in April 2024, European elections in June 2024 and presidential elections in May 2025. The election period will push the new government to avoid controversial decisions that may anger voters. For example, the demand to bring forward the date of the coal-exit has no chance of being implemented, due to the expected opposition of the mining unions.



What is to be expected?

Firstly, Poland is returning to Europe. Donald Tusk is the former head of the European Council and now the EU's politically most experienced leader. His return to power in Poland is being applauded in the European capitals and Brussels itself. Poland will use the good PR to quickly unlock funds from the Recovery Fund (around €60 billion). The vast majority is to go to the construction of energy grids, thermal modernisation of buildings, energy storage, or infrastructure to support the construction of offshore wind farms. The result is to be an increase in Poland's RES capacity from 24.7 GW today to 30 GW in 2026.


A smile offensive and greater openness towards the West will also significantly improve the investment climate in Poland. The new government will listen much more carefully to foreign investors and private capital. Government preference of state-owned companies will not end, but it will be smaller than during the PiS reign.


Secondly, Poland will orient itself more strongly towards the Baltic. The centre of gravity of the Polish energy industry is shifting from to the north. In the 20th century, the industrial centre of the country was Silesia, where coal mines and power stations were located. In the 21st century, the centre will shift to the Baltic, where offshore wind farms and a nuclear power plant are to be built. As a result, Poland's geopolitical interests will also shift northward. Contrary to the past governments focus on France and nuclear energy, Polish diplomacy will now be concentrated on strengthening ties with the Baltic and Scandinavian states to counteract the threat from Russia, and advance the construction of new energy links that will enable integration in the transmission of electricity, gas and, in the future, hydrogen.


Thirdly, the power of the state-owned energy sector will weaken. Poland's energy sector is dominated by more than 70 per cent state-owned companies, but these are burdened with coal which still accounts for 70 per cent of energy production. This will change fast in coming years. By the end of 2030, 17 of the 20 hard coal mines located in Silesia will close due to the dropping demand for coal. As a result, approx. 65,000 people will lose their jobs.


Fourthly, the nuclear programme faces a partial freeze. The new government has inherited environmental and location decisions about the first nuclear power plant in Choczewo from its predecessors, the reactor design contracts with Westinghouse and Bechtel, and the negotiations with the EC on the power plant support system that have begun. However, the details of the new team's approach to the nuclear project will be determined by the outcome of the audit to which the entire nuclear project is to be subjected.  Abandoning the construction of the reactors is unrealistic, but the new government may seek to rationalise and reduce the scale of the entire project. The construction of the Pątnów nuclear power plant (planned by PGE and ZE PAK) is most likely to be halted.


The bottom line

Donald Tusk's government will open up the energy sector to private capital and reduce state interventionism.  It will also be much more open to dialogue with private businesses and Brussels. Poland's energy policy will see a continuation, not a revolution. The progressive plans of the new government will be limited by political and social factors. The function of energy policy will mainly be to maintain social peace and solve ad hoc problems. There will be constant tension between supporters of progressive and conservative policies. This tension may consume the new government, resulting in a decline in political support and further spiralling the tension until the coalition breaks up. However fear of PiS returning to power will slow down this process.

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