Poland’s energy sector is increasingly relying on wind and solar power and to some extent on gas. 2023 again proved that the big shift is underway. Let’s see how this affects the figures for Polish coal mining industry.
Electricity production
In 2023, the production of hard coal power plants was the lowest so far this century – only 65.9 TWh. This is only 39.9% – also a record low share. One of the reasons for this is the growing share of wind and solar power, with an increase of 6.6 TWh (23.4%) in 2023. Coal-fired power stations are currently operating in a load-following role – average capacity utilisation is around 3,000 hours per year, which is 16% less than the year before.
Coal demand
The decline in coal demand has not been without an impact on sales, with sales this year amounting to 46.1 million tonnes, 6.3 million tonnes (-12.1%) less than last year. Extraction also fell (by 4.5 million tonnes, or 8.5%) to 48.4 million tonnes. As a result, the country’s coal stocks increased for the year by 5.17 million tonnes (to 13.11 million tonnes). Such large stocks would be sufficient to cover the country’s needs for more than three months. 65% of the monitored stocks are located at power plants.
Prices
The prices of domestic coal for power plants have achieved relative stability at a high level. Since the beginning of the year, they have fluctuated around 650-750 PLN/t (30-35 PLN/GJ). During this time, coal prices for district heating have fallen from just under 1,100 PLN/t to around 700 PLN/t (28.38 PLN/GJ). This is significantly higher than international coal prices, which by the end of the year had fallen to around $120/t, or just under PLN 20/GJ. International markets saw further declines in 2024.
Employment
Throughout the year, employment in the coal mining industry remained at roughly the same level – around 76 000 people. This is a similar number to the previous year, which means that the mining rate per employee is falling.
Summary
As we can see, despite falling prices, demand for Polish coal is falling. The mining industry is not adjusting and is not increasing mining efficiency or reducing costs. If current trends continue, later this year the level of stocks of unused coal will reach a level at which it will be difficult to avoid supply-side measures, i.e. reforms of the Polish coal mining sector.
