Poland’s Energy Strategy: From Coal to a Diversified Future

Poland is undergoing a transformative energy transition, driven by the critical need to diminish coal dependence, enhance air quality, and decarbonize its economy. While the country is actively working to diversify its energy mix and reduce its reliance on coal, it still holds a prominent position in European coal power production. In 2024, coal accounted for approximately 57% of Poland’s electricity generation, marking a decline from 63% in 2023.  This remains one of the highest shares in Europe, underscoring the scale of Poland’s decarbonization challenge.

Looking ahead, Poland aims to further cut coal’s share in electricity generation as part of its broader commitment to climate neutrality. To achieve this, the country plans to significantly scale up renewable energy, which currently makes up about 29% of electricity generation, targeting at least 56% from renewables by 2030, with rapid growth expected in wind and solar power. Poland has also committed to reaching climate neutrality by 2050, aligning with the European Union’s long-term climate goals. This ambitious endeavor aims to substantially reduce emissions and pave the way for a sustainable, zero-emission energy future, while maintaining a balanced approach to mitigate potential burdens on households and industries. Poland’s transition is happening, but from a very high starting point.

A cornerstone of Poland’s strategy is the allocation of approximately EUR 16 billion, a significant portion of the National Recovery Plan, towards energy infrastructure modernization. This includes offering preferential loans, with a minimum loan amount of 200 million PLN, targeted at distribution and transmission operators as well as renewable energy investors. A notable example of this is the loan secured by Energa-Operator S.A. amounting to EUR 1.8 billion for the development and modernization of Poland’s power grid. Foreign companies, including Ørsted and Northland Power, are also involved in large-scale renewable energy projects in Poland, benefiting from similar funding to support Poland’s energy transformation. This substantial investment marks a decisive step in reducing reliance on imported fossil fuels and bolstering national energy security, while providing a strategic opportunity for investors eager to contribute to Poland’s sustainable energy future.

Poland’s regulatory landscape is rapidly adapting to support the nation’s energy transition, with a particular emphasis on wind energy, nuclear power, hydrogen and energy storage. Poland’s plan to enhance nuclear power involves the construction of its first large-scale nuclear power plant, with the goal of commissioning the first reactor around 2036, as a key component of diversifying its energy mix away from heavy coal reliance. Additionally, Poland is also exploring the implementation of Small Modular Reactors (SMRs) to further bolster its nuclear energy capacity in the coming decades. The Polish parliament passed a bill in February 2025, that allows the state-owned Polish Nuclear Power Plants (PEJ) to receive up to EUR 14 billion in public funding between 2025 and 2030 for the construction of Poland’s first nuclear power plant.

Poland’s offshore wind sector is also poised for significant expansion, targeting 5.9 GW of capacity by 2030, with the “Baltic Power” project leading the way as the nation’s first operational farm in 2026. Furthermore, legislative amendments introduced in February 2025 by the Ministry of Climate and Environment aim to streamline auction processes and address infrastructure sharing, ensuring a more stable and attractive environment for investors and accelerating the realization of Poland’s substantial offshore wind potential. Concurrently, Poland is actively developing its onshore wind energy sector. Polish parliament began processing an amendment to the Act on Investments in Wind Power Plants in early 2025, aimed at removing the “10H rule” and establishing a 500-meter minimum distance from residential buildings. Currently, Poland has approximately over 9 GW of installed onshore wind capacity. Plans are in place to significantly increase that capacity, with goals to reach upwards of 20GW of onshore wind power by 2030, to further diversify the nations energy mix.

Moreover, Poland is positioning itself as a pivotal player in Europe’s green hydrogen revolution, leveraging its existing status as a major hydrogen producer to transition towards low-carbon and renewable alternatives. The 2021 Hydrogen Strategy outlines a plan to develop 2 GW of low-carbon hydrogen production capacity by 2030, supported by infrastructure including 32 hydrogen refueling stations and advanced storage solutions.  The strategy aims to integrate hydrogen into the energy system for storage and grid balancing. To facilitate this transition, the government’s  EUR 9 billion stimulus package will fund the implementation of the strategy, driving innovation, economic growth, and the achievement of climate neutrality and industrial competitiveness.

Poland, having announced numerous energy mix transformation projects, harbors ambitions to become a European leader in this sector. However, the nation’s energy transition remains in its nascent phase, characterized by dynamic policy shifts and significant political discourse.  Notably, some of the candidates for the upcoming Polish presidential elections – which will be held in May 2025 (including Karol Nawrocki, who is supported by the largest oppostion party), have publicly expressed intentions to reverse the phase-out of fossil fuels and reject core tenets of the European Green Deal.  This confluence of ambition, supported by the EU funds and political flux creates a unique, high-stakes market for global investors and technology companies.

Key Considerations:

Comprehensive uderstanding of local and EU-level incentives – It is essential to have a comprehensive understanding of the various incentives available at both the local and EU levels, including preferential loans and subsidies aimed at energy infrastructure and renewable energy projects. Additionally, identifying and engaging with key stakeholders -ranging from government agencies to energy operators and EU level institutions – is crucial for effectively navigating the regulatory and financial landscape.

Navigating an evolving regulatory framework: As Poland’s energy transition is still in its early stages, the regulatory framework remains in flux. Stakeholders must stay vigilant and monitor regulatory developments closely, as changes could significantly impact project viability. Anticipating regulatory shifts and aligning strategies with emerging trends will be key to managing risks and optimizing outcomes.

Monitoring the political ecosystem and public sentiment: The political environment in Poland is dynamic, with growing opposition to the EU Green Deal and increasing calls to reconsider the phase-out of coal in the energy mix. Stakeholders should carefully track political developments, as shifts in policy could profoundly influence the trajectory of Poland’s energy transition. Understanding these potential policy reversals and their implications will be essential for making informed decisions within the country’s evolving energy market.

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