WASHINGTON, June 7, 2011 - The World Bank’s Board of Executive Directors today approved the Energy Efficiency and Renewable Energy Development Policy Loan. Through this loan, the World Bank is supporting Poland’s implementation of critical components of the Energy Policy of Poland Until 2030 adopted by the Government in November 2009. The program’s objective is to help decrease energy consumption by 20 percent by 2020, compared to business as usual, and to increase the share of renewable energy in final energy consumption to 15 percent by 2020. Meeting these targets will also help Poland to meet its 20 percent reduction in greenhouse gas emission target by 2020. Poland has made commitments with the EU to meet these three major targets. The World Bank’s report entitled “Transition to a Low Emission Economy in Poland” helped guide the policy agenda that would enable these targets to be met, while respecting the fiscal constraints currently being faced by Poland.
“The Government of Poland has launched an ambitious and comprehensive energy efficiency and renewable energy program to help lower its emissions. The new policy and legal framework paves the way for a significant increase in investments in energy efficiency and renewable energy. The World Bank welcomes the opportunity to work with the Government in implementing this program,” says Peter Harrold, Country Director for Poland at the World Bank.
The program and the policies that this DPL supports are expected to help: (i) improve the efficiency of the energy sector, reducing the cost of energy services; (ii) create “green jobs” through significant energy efficiency and renewable energy investments, stimulating economic development; and (iii) reduce air pollution, diminishing its impacts on human health.
The energy efficiency and renewable energy programs draw on market-based solutions through certificates programs to minimize the costs, respecting Poland’s fiscal constraints and goal of sustained economic growth by maintaining and enhancing the country’s competitiveness.
Poland’s energy use per unit of GDP has already decreased by more than 50 percent since 1990, as a result of bold structural reforms of the economy and in the energy sector. However, significant potential for efficiency gains still remains as Poland’s energy intensity is double that of the EU average. The Government’s long-term aim is to reduce Poland’s energy intensity to the level of the EU-15 by 2030.
The building sector is the Government’s primary target for energy efficiency gains going forward, as it is the largest energy consumer at about 40 percent of total final energy demand, two-thirds of which is for heating. Average energy consumption in buildings in Poland is about double that of Denmark due to different energy efficiency standards. Tightening those standards for new buildings and achieving “nearly zero” energy buildings by 2020 is a major objective of the Government as well as a new EU requirement. Achieving energy efficiency gains in the existing building stock is more challenging as the costs are higher than for new buildings.
The Government is funding PLN 200 million in grants during 2011 for such investments through its Thermo Modernization and Renovation Fund, but recognizes that far more needs to be done to make a significant impact. The White Certificates Program, established in the Energy Efficiency Law, approved in April 2011, as well as Smart Metering will help Poland meet its goals.
Measures to curb energy demand of the transport sector, the second largest and fastest growing energy consumer in Poland at 24 percent of final demand, are underway through the start of implementation of the Electronic Tolling System for heavy vehicles on selected highways.
The share of renewable energy in final energy consumption is currently only about 7.5 percent as Poland draws on its abundant coal reserves for over 90 percent of its electricity needs. The country has very limited hydropower potential, most of which is already being used. The Government plans to increase the share of renewable energy primarily by exploiting the country’s wind, biomass, and solar water heating potential. Achieving the energy efficiency and renewable energy targets will require major and sustained efforts by the Government.
The approved Development Policy Loan of €750 million (US$1.11 billion) is in support of the Government’s budget. The loan will be released in a single tranche.