Costs of Transition Towards Renewable Energy in Poland

The accelerated decarbonization agenda of the European Union, supported by the European Green Deal, the Fit for 55 package, and REPowerEU, increases pressure on member states to reduce dependence on fossil fuels and expand renewable generation. Poland, whose power sector remains strongly coal-dependent, faces one of the most challenging and capital-intensive transition pathways in the EU. This study provides a comprehensive assessment of the costs and economic viability of Poland’s energy transition, focusing on the feasibility of replacing coal-based electricity generation with renewable technologies. The analysis applies three financial evaluation methods: net present value (NPV), internal rate of return (IRR), and levelized cost of electricity (LCOE). These tools are used to estimate investment costs of selected renewable technologies, assess the potential for coal substitution in the energy mix, and determine the profitability of renewable projects under selected scenarios. The results show that onshore wind power demonstrates the most favorable investment parameters, including the lowest LCOE and the shortest payback period, while photovoltaics exhibit lower profitability in the analyzed conditions. Nuclear energy may serve as a complementary stable source to variable renewables. The findings provide evidence-based insights supporting national energy planning and the design of future policy instruments.