What the climate effect has not done in the world for three decades,
the COVID-19 pandemic accelerated in two years,
and geopolitics enforced in six months.
At the beginning of the article opening the Bulletin, I present in a nutshell (in the simplest terms) the shocking change affecting the place of the energy transition in the geopolitical world order. And the consequences of this change for Poland, which must certainly not be overlooked. Because it is geopolitics in recent months – after Russia’s attack on Ukraine – that in the case of Poland, in a shock (extremely fast) mode, verifies the need for the TETIP transformation (the transformation in the breakthrough innovation mode) to electroprosumerism – as what it should be. But will it be so?
Both, the statement extended in the last but one sentence and the short question in the last one, require elaboration. Because the time is such that you cannot mix up what is needed (what should be) with what is accomplishable and even more with what it will be. Even if what is needed is good (in an ethical sense) and has fundamental foundations (in a physical sense), like it is with the TETIP transformation into electroprosumerism.
This is where three important additional questions arise. The first is the question about the (broadly understood) competences needed to implement the TETIP transformation. The second question relates to the existence (or not) of the necessary material resources and the third relates to the will to implement the TETIP transformation. The first two questions are positively answered by the already existing concept of TETIP transformation (at the same time it is not an unconditional answer). On the other hand, the will to implement such a transformation is definitely uncertain. In addition, it is emphasized that this problem, open in Poland, collides directly with its solution taking place at the geopolitical level. And it is this discomfort that will have a central place in the rest of this introduction to the Bulletin. I will proceed with the introduction as the one who has not yet found arguments justifying (i.e. the positive ones) rejection of the concept of TETIP transformation. Even during the subsequent (various) stages of its verification carried out over the last four years (starting from 2018), always bearing in mind the falsifiability criterion, i.e. “looking for a hole in the whole”.
First of all, I will present four negative arguments related to geopolitics (meaning the rightness of the TETIP concept and no grounds for rejecting it). Three of them come from the United States and one is related to Russia’s attack on Ukraine. I’ll start with the latter. This is an argument in the form of a risk related to the Zaporizhzia Nuclear Power Plant used by Russia for war purposes. If supporters of nuclear power plants say that such installations are a solution for climate neutrality and that they are safe (pushing the Three Mile Island, the Chernobyl and the Fukushima disasters out of memory), today they have to deal not only with the virtually zero exergy efficiency of these power plants, not only with their zero technological and business reproducibility (which completely disqualifies them in the context of their adequacy to the modern technological world). They must also, or perhaps above all, confront the possibility of using nuclear power plants (against the democratic world) as a hostage in the hands of any criminal regime. And they have to face the fact that, as supporters of nuclear power plants, they work against the energy security of any country that chooses this kind of power plants (this is determined by the ordinary economy of any large-scale war: an attack on nuclear power plants is the cheapest way to destroy energy security). These are all reasons why nuclear power plants cannot be used in the TETIP transformation.
Moving on to the American arguments, I will mention first (chronologically) the use by President Joe Biden, in early June (2022), of the Defense Production Act to stimulate the production of goods needed for energy transformation serving, through the departure from fossil fuels, the national security.
The second argument is the Inflation Reduction Act signed by President Biden in mid-August (2022) – to improve the condition of economy (fighting inflation). The act contains provisions aimed at the development and financing of clean energy projects in the US over the next ten years (in the TETIP transformation it is the energy with the highest exergy in the context of electroecological cost). The provisions of the act guarantee the extension of investment and production reliefs and the addition of extended tax credits in the area of electrotechnology development and manufacturing of equipment to produce, store and use clean energy, as well as conditions enabling the parties to more easily monetize tax reliefs for the development of clean energy, including the reduction of CO2 emissions (in the horizon of 2030 even by 40% compared to the current level). The value of the package allocated by the US government to transform the energy sector to climate neutrality is US $ 375 billion.
The third American argument is different in nature, but closely related to the first two. This argument is a report published by Stanford University finding that The world can switch to 100% renewable energy and the investment would pay off within 6 years [the study quoted here after the KIGEiT Bulletin, August 16, 2022]. The report begins with a manifesto that, faced with record high energy and fuel costs, the world is looking for cost-effective solutions to shift away from oil and gas to meet its energy needs. But the results presented in it are of groundbreaking character, both in terms of methodology and scope of research. In the latter context, it is worth emphasizing that these are the results of research (regardless of what it means) based on data from 145 countries. The research was led by Professor Mark Z. Jacobson, professor of civil and environmental engineering at Stanford University and director of the Atmosphere/Energy Program.
Professor Jacobson concludes that the transition to renewable energy sources may not be as difficult as it generally seems to be. Moreover, the transition to clean energy and electrification of all energy sectors will not lead to collapse of electricity supplies security or to an increase in prices. In fact, according to the carried out studies, prices will drop immediately and all the costs associated with switching to 100% renewable energy will be recouped in merely six years. Finally, the desired horizon for achieving climate neutrality is 2035, and 2050 at the latest. At the same time, the world should achieve 80% of climate neutrality by 2030.
The Stanford University report is a very strong argument confirming the correctness and viability of the TETIP concept. First of all, there is a convergence in an approach to strategic modeling of the energy transition. It is the approach in which the critical distinguishing feature in the case of the TETIP transformation is the uniqueness of electricity from renewable energy sources in satisfying all energy needs, i.e. electric monism and re-electrification based on renewable sources (in the Stanford University report it is “clean energy”). In addition, another distinguishing feature is a very wide scope of area consolidation, which in the TETIP transformation includes, in particular, passivation of construction, electrification of heating, electrification of transport, electricity use, electrotechnologies, circular economy and re-electrification based on renewable sources; in the Report, this scope is similar, although it is less formalized in terms of methodology.
The numerical results of balance (energy) and economic (especially capital expenditure) research in the Stanford University report and in the TETIP transformation align in meaningful ways. However, a more detailed comparative analysis is needed, primarily in terms of identification of quantities (variables) being the subject of the analysis and the obtained numerical values of these quantities. There is no contradiction, however, with the very high (surprisingly high) efficiency (energy and economic) of the transformation to “clean energy” in the Stanford University report and to electroprosumerism (based on electric monism) in the TETIP transformation.
A separate issue is the horizon of energy transition towards climate neutrality. This thread is of critical importance and is the main focus of the rest of this introduction to the Bulletin. It is because in the context of the horizon of climate neutrality, there is a very high methodological consistency between the Report and the TETIP transformation. And at the same time, there is a great difference between this methodological consistency on the one hand and, on the other, a rigid (for now) political goal for the entire EU, which is the unified horizon of 2050, and the “shaky” political goals of the Polish energy policy (in particular PEP2040) – including proposals/demands of the prime minister to extend the horizon of climate neutrality for Poland beyond the horizon of 2050.
With regard to methodological compliance, it is a case by case approach in both the Report and in the TETIP transformation. In the Report it is first of all individualisation of every single country that “stabilizes” the horizon of climate neutrality: 100% transition desirable in 2035, for the whole world, and 80% completed by 2030. In the TETIP transformation, it is more about a “descending” organizational hierarchy – in Poland to the level of front-ends (also referred to as “OK” – as in “Osłona Kontrolna”), mainly electroprosumer front-ends (EP) and local government front-ends (JST). Generally, however, it is a much more “cautious” approach to neutrality than the one recommended in the Report for the World. But it is more progressive or ambitious than the EU’s policy and goals. And it is “groundbreaking” in relation to the Polish government’s energy policy.
OK front-end systems (…) are of particular importance in modeling processes on full (complete) TETIP time trajectories (A → B) and in algorithmization: firstly, of the technical intelligent infrastructure of electroprosumerism, and secondly, of virtual electricity markets. Basically, there are four systems that make up the canonical set of electroprosumeric front-ends. The OK(EP) electro-consumer front-end system is of fundamental importance. The second one is almost as important and it is the already mentioned system OK(JST). The third system of the canonical set of front-ends is the system OK(KSE) on the topologically coherent generation and grid infrastructure of the National Power System (or KSM – “Krajowy System Elektroenergetyczny”). The critical subsets of this system are those characteristic for three levels of rated voltage of distribution networks (LV – MV – 110 kV) and for the fourth voltage level of the KSE, i.e. for the UHV networks, of the highest voltages. The fourth system of front-ends is the system OK(WSE), i.e. virtual electrical systems managed by independent LES (WSE) operators (operating outside the structures of DSO (OSD) network operators) as well as integrating systems: firstly, the generation sources of SME (MSP) pretender-producers in their front-ends OK(P-MSP), and secondly, OK(EP) front-ends.
The canonical set of four systems of electroprosumerism front-ends „fills out” the electric energy emerging grid markets (SRW) in the OK(SRW) front-end. Coupled with the front-end OK(SRW) in the TETIP concept is the front-end OK(SRS) of the descending network market of the large-scale corporate power industry WEK-PK (iEJ). Here, in the common part of OK(SRW) and OK(SRS) front-ends, there is a chance for the mechanisms of breakthrough market competition to work between the SRW market and the end market of WEK-PK (iEJ) electric energy, and then indirectly between all three descending markets of the whole fossil fuels energy sector.
The autonomization susceptibility of the OK front-ends (…) against the front-ends OK(SRS) is the key determinant of the answer to the question whether the TETIP transformation will become a fact in Poland or will remain only a good concept, but not used. One important factor – i.e. autonomization of the front-ends – is related to three forces that will be, alternately, the leading ones. The first one will be electroprosumers in front-ends OK(EP). The second will be innovators from the MSME sector, able to get into the role of candidates to virtual electricity markets in front-ends OK(EEZ); a special role among these innovators will be played by those who will be able to play the role of system operators (EEZ). The third force will be local governments in front-ends OK(JST). It is understandable that these three forces are the pillars of the social market economy. And it is in their front-ends that you need to look not only for solutions needed in the narrowly understood energy transition, but also for the foundations of a balance between all three dimensions of the energy transition (socio-political, economic-technological and natural-climatic).
Another factor – i.e. blocking of the TETIP transformation – is related to the political and corporate structure of the energy sector that has been shaped over the last two decades. At the same time, it is a system in a deep historical imbalance. This poses a great danger of its evolution towards a political-oligarchic system. This direction is suggested, for example, by the government’s efforts to include private investments in the energy policy in the form of small modular nuclear units (SMR units).
Diagram. TETIP balance trajectory (A → B) at the country-level front-end OK(PL): Σ = SRS + SRW + EP
Because of the complicated global and national conditions the most important action to implement the TETIP transformation is the effective reduction of cognitive delay associated with this transformation. This delay reduction should be large enough to allow the transition to the action plans in the front-ends OK(EP), OK(WSE) and OK(JST) on the entire TETIP (A → B) time trajectories. In this context, it is necessary to reduce the risk of cognitive delay associated with properties of individual front-end systems trajectories. The diagram shows the heuristics of time processes in the OK(PL) front-end, i.e. in the country front-end. It needs to be emphasized that this is a heuristic and not a qualitative illustration. This heuristic may, in particular, be a good basis for the government’s practical actions in the area of building the Polish electroprosumeric crisis resilience in the 2050 horizon. The most important (and nontrivial) message for the correct perception of electroprosumerism flowing from this diagram is related to the function of SRW (t). Namely, the shape of the function (its convexity and concavity) may come as a considerable surprise to the vast majority of those who very intensely shape opinions on the need for large investments in power grids as an absolute condition for the success of the energy transition in Poland. Transition realized in the mode of political goals. (In the TETIP transformation investments in power grids are kept limited because of their high electro-ecological cost.)
At this point, it is worth returning to geopolitics and the central role of the United States in it. To verify once again the legitimacy of the TETIP trajectory for Poland in the light of President Biden’s radical redirection of the American energy transition trajectory. Make reference to the American government system based primarily on tax mechanisms, but never on subsidies (extra payments), dominant in the EU, especially in Poland. In the light of this it must be remembered that the US $ 375 billion package has a very high leverage in investors’ own funds, which is generally due to low US taxes. If this was close to a tenfold, American investments (of the government and investors) in the energy transition would amount to almost 4 trillion. Such investments, with a strong competition between American companies in the area of a very high innovation potential, may realistically become a deciding factor in the United States gaining a global (geopolitical) competitive advantage in new markets related to satisfying energy needs.
Therefore, the TETIP transformation, with the proposed systems of using the market financial surplus (accumulated over more than three decades) of PLN 2 trillion – in pre-inflation prices – stands another test of credibility. At the same time, it is emphasized that this surplus is an economic heuristic on the TETIP trajectory (2018 → 2050) for which the economic estimates were made. PLN 750 billion from this surplus had to be used to finance investments in re-electrification (renewable energy sources). More than half of the surplus (PLN 1,050 billion) was allocated to finance support for specific transformation areas, in the system of tax credits: passivation of construction and electrification of heating „received” PLN 500 and 350 billion, respectively, and electrification of transport – PLN 200 billion. PLN 200 billion has been allocated to a „just” transformation – also in the tax credit system.
English version: Jacek Dubrawski, Grzegorz Popczyk
More in the issue 8/2022 Energetyka.