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Report: NEW PARADIGM

Why does the energy industry need competition?

– Poland does not have to choose between security of energy and power supplies or a green direction of the transformation. Inevitable reconstruction of the energy and power system will require to give up the preference for large, state-controlled companies. Instead, the state should focus on the role of an impartial regulator taking care of efficient operations of the energy market and stimulate rapid modernisation of the power and energy sector – write Authors of the New paradigm. Why does the energy industry need competition? report: Maciej Bukowski and Krzysztof Kobyłka.

Almost all the processes that make up the daily functioning of modern economies depend to a greater or lesser extent on coal, natural gas or oil. It is not surprising, then, that economic development is – both in time and space – strongly correlated with an increase in the consumption of these raw materials, and that securing access to them has become a critical component of the policies of all countries in the world.

Since the start of the industrial revolution, 1.5 trillion excess carbon dioxide has entered the Earth’s atmosphere, resulting in an increase in average global temperatures of more than 1 degree Celsius and a number of other negative phenomena indicative of a serious environmental crisis: an increase in the acidity of the oceans, an increase in the frequency of extreme weather events, irreversible changes to ecosystems or the extinction of entire species of plants or animals. Over the past decade or so, awareness of the causes and consequences of the climate crisis has grown enormously among the world’s political and economic elite and the wider public, translating into the content of the public debate and concrete actions to replace fossil fuel energy with non-carbon sources.

In parallel, there is a dispute over the level of climate ambition and the directions of transformation of the global economy and the instruments with which best to stimulate it. This discussion was dramatically altered by the Russian aggression against Ukraine in February 2022. It triggered a global fuel crisis at the centre of which was the European Union, still heavily dependent on fuel supplies from Russia. The Community has been confronted with a choice of the best strategy driven by concerns about securing energy carriers, the supply of which from Russia are seen as indirectly supporting this war machine. This necessitated an adaptation of existing transition priorities, including raising the profile given to energy security and the resulting energy independence.

In this report, we answer the question of what energy security is, how to understand it in the new geopolitical context, discuss the directions of the energy transition in Poland and the EU, and, looking back at the mistakes made, answer the question of how the country’s energy strategy should change. The text is addressed to decision-makers in politics and public administration, as well as to citizens interested in the right direction of energy development in Poland.

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