To begin with, let’s take a look at how much electricity was produced from hard coal and other fuels over the month. Supplying a substantial part of the demand is coal’s fundamental, though not the only role.
In January, the country’s energy production was characterised by several values that were the second highest on record. The second-highest amount of energy generated was 16.8 TWh (excluding PHES), which was influenced by the second-highest export (0.9 TWh). Wind turbines and natural gas delivered their second highest amounts ever: 3.1 TWh and 2.3 TWh, respectively. It is worth mentioning that wind generation was curtailed by the TSO several times in January to keep coal-fired units operating above the technical minimum. These were some of the highest monthly reductions on record.
Over the course of the month, production from lignite, gas, biomass and wind increased, as well as photovoltaics – though the overall share was still rather marginal, there were a couple of days when PV generation reached 20% of the electricity mix during peak hours. Hard coal production decreased slightly. Emission-based energy sources provided 78% of the production mix coverage, compared to 22% from clean sources.
More data on electricity production by source is available on the chart Electricity production, source: ARE
Hard coal in January
Production and sales of hard coal
COAL PRODUCTION – 4.03 Mt ↗
COAL SALES – 4.26 Mt ↗
Coal production was about 170 000 tons higher in January than in December, and sales increased slightly. Price shocks (see below) have not impacted the sector’s overall production statistics so far.
Hard coal reserves
TOTAL – 12.64 Mt ↘
RESERVES AT MINING SITES (mining) – 5.09 Mt ↘
RESERVES AT MINING SITES, PURCHASED (by the power industry) – 0.31 Mt =
RESERVES AT POWER PLANTS (power industry) – 7.24 Mt ↘
There was a significant change in total stocks, which fell by more than 1 million tons. Almost 300 000 tons were sold from mine storage sites. Still, it was the power plants that took the most from their stocks – nearly 780 000 tons, one of the most significant decreases among the available data.
Employment in hard coal mining
73 847 persons ↘
Employment continues its downward trend and has fallen below 74 000 jobs. There were 267 fewer FTEs than in December.
Hard coal price for electricity generation (PSCMI1)
PSCMI 1 – 361 PLN/t ↘
Coal for the energy industry has suffered a major price shock, falling by more than 20% over a month. The reason for this is mainly due to the fall in prices on the international market – due to the structure of the support system for the mining industry, prices on the Polish market tend to follow the ARA index (Europe’s major shipping hub of Amsterdam-Rotterdam-Antwerp). This means higher subsidies aimed to “maintain the production capacity of mines”, depending on the difference between mining costs and international reference prices. Therefore, the cost to the state budget may be higher than the predicted 9 billion PLN in 2025. The energy sector is benefiting from this situation. Likely, some long-term supply contracts between Polish mines and power plants have not been extended or fully realised, and purchases have shifted to the short-term market, where prices are lower. As we have seen in the reserves data, power plants have also made intensive use of their coal stocks, possibly exerting additional price pressure. Further declines can be expected, as we already know that ARA prices fell by more than 12% in February compared to January.
Below, we quote additional technical and economic mining data from ARP published quarterly:
Mining costs:
- 4th quarter: 900 PLN/t
- full-year 2024: 944 PLN/t
The financial result for current production:
- 4th quarter: -254 PLN/t
- full-year 2024: -194 PLN/t
Profitability of current production:
- 4th quarter: -40%
- full-year 2024: -27%
Hard coal price for heating (PSCMI 2)
PSCMI 2 – 494 PLN/t ↘
Coal for heating also saw a significant decrease, although not as substantial as for the energy sector: -9% compared to December. Both indexes have thus reached a level close to that before the energy crisis in 2022.
That is all in the current issue. We would like to remind you that data on Polish mines is always available in our database: Lignite and hard coal mines. It contains a complete list of active deposits and annual statistics of mines.
Contact
Wojciech Przedlacki, Product Owner energy.instrat.pl, [email protected]
