Decarbonising the Polish Energy Sector: A Cost–Benefit Analysis to 2050

This paper examines the costs and benefits of decarbonisation policy in the Polish energy generation sector. Accordingly, the analysis focuses on the costs of transforming the national energy mix up to 2050, as well as the environmental benefits associated with reducing emissions from electricity and district heating generation. The study addresses the question of which energy production structures are optimal at different levels of global warming costs, given the uncertainty surrounding the magnitude of human impact on the climate. The results indicate that relatively low SCC justify only a limited optimal reduction in CO2 emissions. Full decarbonisation of the Polish energy sector, corresponding to a 100% reduction in CO2 emissions by 2050, becomes socially optimal only at an SCC of around €165/tCO2. Simulations conducted for different EUA price levels allow for the construction of a MAC curve, which can be used to identify the economically optimal scope of decarbonisation policy. Due to its heavy reliance on coal and the high-emission starting point of its energy transition, Poland faces particularly high investment requirements. Achieving climate neutrality in the energy sector by 2050 is estimated to require approximately €228 billion in investment, including substantial expenditures on RES, the construction of nuclear power plants, and the development of energy storage infrastructure.