This modernization is one of the biggest challenges for Poland. It will cost PLN 500 billion

Last year, the number of negative decisions on connection amounted to 7,448, and their total capacity reached 83.6 GW. The age of the transmission and distribution infrastructure, many of which are over 25 or even 40 years old, poses a serious challenge. This applies particularly to high, medium and low voltage lines.

Major modernization of the electricity grid

The construction and modernization of power grids requires investments in the amount of hundreds of billions of złoty. These funds are to come from various sources, including the National Reconstruction Plan (KPO), the Charter for the Effective Transformation of Distribution Networks and the EU Modernization Fund. Private investors may also get involved in financing.

The report “Green Horizons: Poland on the Path to a Sustainable Future” prepared by the strategic consulting firm Kearney, indicates the need to adapt the centrally managed energy system to the new model of energy production from renewable sources. The necessary expenditures for the development of network infrastructure in Poland are estimated at PLN 200-500 billion in the coming years. This means an increase in annual investments from the current level of PLN 7-8 billion to PLN 19-29 billion.

Condition of the National Power System

The National Power System (NPS) connects energy sources with end users through the transmission and distribution network. In 2021, the length of lines in operation was 875.9 thousand km, including 15.9 thousand km of the highest voltage lines, 34.4 thousand km of high-voltage lines, 321 thousand km of medium-voltage lines and 505 thousand km of low-voltage lines. The NPS also included power stations, most of which were medium-voltage units.

According to the Polish Society for Transmission and Distribution of Electricity (PTPiREE) and the Energy Forum, from 30% to over 40% of the KSE infrastructure was built over 40 years ago. Outdated infrastructure hinders the development of new generating units, such as wind farms, nuclear power plants and solar installations. By 2040, energy production in Poland is to be based on nuclear, wind and solar power in 42%.

What if the modernization fails?

An example of the consequences of inadequate infrastructure is the blackout that hit the Balkans in June 2024. A 400 kV line fire in Montenegro, combined with record energy demand, caused power outages in Bosnia, Montenegro and Croatia. A similar situation in Poland could have catastrophic consequences, especially during the winter or summer peak.

Distribution network operators in Poland plan to invest almost PLN 140 billion in network infrastructure in the coming years. The five main operators – PGE Dystrybucja, Tauron Dystrybucja, Stoen Operator, Enea Operator and Energa Operator – will allocate over PLN 72.6 billion for investments by 2028. Polskie Sieci Elektroenergetyczne has a 10-year development plan for 2025-2034, covering expenditures of PLN 64.3 billion.

The European Union provides funds for grid modernization under the KPO and the Modernization Fund. Poland may receive PLN 115 billion for energy transformation in 2021-2027. Additional funds may come from the state budget or private capital, which will allow for the implementation of necessary investments.

Potential consequences from the EU

Failure to undertake the necessary modernisation measures would result in failure to achieve energy targets and limit the possibilities of RES production. In the long term, this would lead to an increase in electricity prices, which would negatively affect the economy. The development of transmission and distribution networks is key to reducing energy prices and fully utilising the potential of RES.