Poland's Economy Ministry Blamed for Lack of Energy Plan

Poland's audit office said on Tuesday that the government's failure to define a long-term energy policy was delaying construction of new power plants as it made companies reluctant to invest in the sector.

Poland's Economy Ministry has postponed publication of a long-term energy policy review, that had been due in November 2013, because it wanted to expand the timeframe to 2050 from 2030.

The Supreme Audit Office (NIK), which monitors public spending, said the lack of investment could lead to a gap in supply in the longer term if new facilities are not built, because many existing power plants are due to be shut down.

Between 2010 and 2014 energy companies scrapped plans to build 10 new power plants because of high regulatory and price risks, it said.

"The lack of an up-to-date energy policy results in uncertainty among electricity producers when taking strategic investment decisions, which also have long-term consequences for the economy," NIK said in a report published on Tuesday.

It said demand for electricity is expected to rise to 230 terwatt hours (TWh) by 2030, from around 159 TWh in 2015.

It said that after 2035 electricity will be generated mostly by plants that are yet to be built, as half of the existing power plants -- coal-fuelled plants built in the 1970s -- are to be shut down in 2020-2035.

Poland's first nuclear plant is expected to provide a significant chunk of electricity after 2025. However, sources told Reuters on Tuesday that construction of the plant will be delayed by at least another two years.

NIK, in its report, said there was a high risk of the project being scrapped altogether.

However, in the shorter term, by 2020, the office said Poland will be able to balance plant closures and new capacity. It will require 6-7 gigawatts (GW) of new capacity while 6.4 GW will be shut down by 2018.

Power companies have said they plan to invest a combined 54 billion zlotys ($14.2 billion) to build 10.5 GW of capacity in 2014-2028.

Reporting by Agnieszka Barteczko