How cheap energy from the sun can displace expensive coal

The dynamic development of solar energy in Poland is a compilation of cheap technologies, support programs and the growth of social respect for the climate. Cheaper solar energy can contribute to a fall in electricity prices in Poland in the coming years, if it replaces expensive energy from coal in the so-called merit order.

The history of solar energy resembles … the fate of the automotive industry. Henry Ford at the beginning of the last century was close to the development of electric cars instead of internal combustion, but eventually put on solid fuel, because oil became cheap. And it is only for a decade that this trend has been reversed in the world thanks to Tesla and other manufacturers, because the prices of electrical technologies in the automotive industry are falling and the ecological requirements for cars are increasing.

When we look at the development of solar energy, it can also be seen that in the US it was once a great hope, but ultimately it had to wait tens of years for its time. The symbol of this was the installation of the solar panels on the roof of the White House during the presidency of Jimmy Carter in 1979, which a few years later President Ronald Reagan “took off”. Just as electric vehicles had their false start, so did solar energy, but now they are experiencing a renaissance together. He also reached Poland.

You don’t have to travel far outside the city to see the popularity of solar panels with the naked eye. Panes on the roofs of houses, on accompanying buildings, and even in gardens, we will find more and more often, and it has nothing to do with wealth. The panels are mounted both on residences worth several million, as well as plastered houses built over several decades. economic method.

Talking with solar panel users you can hear that they like that they have “their energy” for their needs. But money also counts. The effects of several public financial support programs for solar installations can be seen, which were well used by crowds of Poles to reduce the costs of such an investment. Every year, a broad public awareness is also being built that, by fostering the climate, you can produce “green” prosumer energy yourself at a low cost, and send the surplus to the grid.

Seeing the new trend, the largest energy companies in Poland have directed their clients offers related to such investments and boast about new records in connecting solar prosumers to the network. As a result, the installed solar power is growing dynamically and makes energy companies, so far focused on generating energy from coal, become greener and fit into the trend of fighting for the climate.

However, not only prosumer energy means that households are buying less and less energy from so-called the carbon footprint, also large energy companies have decided to use this technology on an industrial scale, building large solar farms. The effect of photovoltaic development, both prosumer and industrial, can be such that a great change is being prepared not only in the transition of the energy sector to a more climate-friendly one, but also in energy prices. How?

What is a merit order? Sorting production sources in terms of marginal cost of production: from the cheapest to the most expensive. According to the analytical report “How to achieve competitive energy prices when recovering from the crisis by 2023?”, Prepared by dr. Jan Rączka for the Friendly Country Foundation, it is enough to increase the pace of solar energy development until 2023 to reduce electricity prices.

Soon, the share of solar power plants will exceed 2 GW in the Polish energy system, including micro-power plants, and an additional 6-8 GW in solar power plants will be enough to “push” from the so-called merit order old coal blocks, the least efficient, characterized by high CO2 emissions and expensive energy production.

Thus, merit order, where cheaper sources (e.g. solar) displace more expensive sources (e.g. coal) means that if solar (or wind) power plants balance the merit order, the energy price would be extremely low because they have very low short-term marginal cost (there is no need to use either fuel or human labor to generate an additional megawatt hour), but they also do not incur CO2 fees.

They just don’t emit pollutants into the air. Therefore, an additional advantage of increasing solar power is making energy prices independent of the costs of CO2 allowances.

As Jan Rączka wrote in the report, in the context of energy prices the key concept is the merit order, because it determines the level at which prices will be shaped. The key to determining the price are the energy sources that enter the merit order at the end, in our case these are solar panels.

Now nearly 80 percent energy in Poland is still produced from hard coal and lignite, but the share of renewable energy is slowly but steadily growing. The leader is onshore wind farms, whose development was blocked a few years ago by the so-called the Distance Act, but they are currently experiencing a renaissance. Large energy companies boast of either newly opening land farms or ambitious plans to build offshore farms in the Baltic Sea, where, for technological and environmental reasons, much more power can be installed.