Poland:Energy district heating industry needs up to $100 billion for transformation.

The expenditures necessary to carry out the transformation of district heating, according to the Polish Society of Combined Heat and Power Plants report, could reach $69 - 105 billion by 2040. As estimated by experts from the Polish Society of Combined Heat and Power Plants, achieving the goals set out in the EU’s Fit for 55 package for the heating sector will require, depending on the scenario, outlays of between $23billion and $44 billion for generation infrastructure, between $19 billion and $25 billion for transmission and distribution infrastructure, and between $26 billion and $35 billion for the modernization of consumer installations. 

According to the updated EU Energy Efficiency Directive, starting January 1, 2028, the requirement for the share of renewable energy in heat injected into the grid will be at least 5 percent to meet the criteria for an efficient district heating system.

The criteria related to the use of renewable energy sources, RES, waste heat, and high-efficiency cogeneration will be gradually tightened.  At the same time, the reformed CO2 emissions trading system will put an increasingly heavy burden on emission-intensive sources of power generation, including fossil fuels and biomass, which will not be sustainably sourced, and, in time, possibly also municipal waste.

According to statistics kept by the Polish Energy Regulatory Office, the share of RES in licensed district heating (systems above 5 MW) is growing, but quite slowly. According to the latest available data, which covers 2022, renewables accounted for less than 13 percent of the industry’s overall energy mix, compared to nearly 3 percent in 2002.

The Ministry of Climate and Environment has unveiled the “Renewable Heat Source for Heating” program.  There will be $500 million available in the form of grants and loans.  Poland has one of the most developed district heating systems in Europe.  More than 40 percent of households, or about 5.8 million in total, with 15 million Poles living in them, depend on heat from the network.  The network alone has more than 22,000 kilometers.  The grants and loans will be available for investment in heat pumps, solar collectors, and geothermal (without cogeneration), and also for connections.

The money can be counted on by entities providing system heat, i.e., municipal companies and local government units.  Investments in district heating are often beyond the capabilities of cities or municipalities.  Meanwhile, 40 percent of coal burned in Poland is used for district heating.

The Climate Ministry will prepare a strategy for the heating sector by the end of 2024. Before that, the final versions of two key documents with which the heating strategy is to be consistent, namely the National Energy and Climate Plan and the Energy Policy of Poland until 2040, are to be presented.

Although PLN 2 billion is a drop in the ocean of needs, experts view the “Renewable Heat Source for Heating” program positively.  It will make it possible to launch at least some of the necessary investments where projects are already in place.  However, many more investments will be needed for the transformation of the heating industry.

A good example of this positive impact can be seen in Veolia’s recently commissioned cogeneration plant in Lidzbark Warminski, which uses 100 percent renewable energy.  The operation of this plant is based on high-efficiency heat pumps, photovoltaic panels and a system of heat storage, including Poland’s largest storage in the form of a tank sunk into the ground.

In Poland, there are already several large companies that offer heat pumps and technologically advanced boilers, but the significant anticipate growth for demand should create ample opportunities for U.S. companies to enter the market.
For more information, please contact CS Poland at office.warsaw@trade.gov.