Polish Energy Market: Between Old Habits and New Challenges The Increasing Role of Wind Energy in Poland as an Example of Institutional Change Andrew Ancygier.

Polish Energy Market: Between Old Habits and New Challenges

The Increasing Role of Wind Energy in Poland as an Example of

Institutional Change

Andrew Ancygier

Three ThesisIn respect to renewable energy sector in Poland…

1. …nothing is changing. The country is and will be heavily dependent on coal.

2. …the decades old dependency on coal is weakening and there is an increasing support for the development of RES. The reasons behind it are of domestic origin.

3. …the decades old dependency path is weakening and there is an increasing support for the development of RES. The reasons behind it are of exogenous origin: mainly membership in the EU.

Polish Energy Market

The Challenges

• Rapidly increasing electricity demand• Old and inefficient energy infrastructure • Dependency on oil and natural gas imports

from Russia• The need to reduce CO2 Emissions

Polish Energy Market: The Low-Hanging Fruit of Increased Efficiency

Polish Energy Market: The Role of Coal is Diminishing…

Electricity Generation in Poland in 2008

Polish Energy Market: The Nuclear Ambitions

• In an attempt to increase energy security and reduce the role of coal Poland develops nuclear ambitions…

• According to the timetable agreed by the Polish gorvernment on August 11, 2009 there shall be three NPP by 2030 producing in total 5 000 MW of Electricity.

• Nuclear energy should cover 16% of Poland‘s energy consumption by 2030.

Renewable Energy Sources in Poland

Electricity from Wind Energy in Poland

Wind Energy in Poland: Ambitious Plans

• According to Polish Statistical Office until the end of October there were 282 Windmills installed in Poland with a total capacity of 666,3 MW.

• Polish government wants the 2000 MW mark to be exceed by the end of 2010. By then wind energy should provide 2,3% of electricity consumed in Poland.

Theoretical Framework

Three Versions of Institutionalism

“Historical institutionalism is based on the assumption, that a historically constructed set of

institutional constraints and feedbacks structure the behavior of political actors and

interest groups during the policy-making process”

Daniel Beland in New Institutionalism. Theory and Analysis

What is an institution?

• The „materialist definition“ (old institutionalism) Institutions refer mainly to the state, or more exactly to “government”. These are

cabinets, parliaments, courts, armies, but also constitutions and other arrangements regulating relations between these. In some cases also the party systems are mentioned in this category.

What is an institution?

• The „materialist definition“ (old institutionalism) Institutions refer mainly to the state, or more exactly to “government”. These are

cabinets, parliaments, courts, armies, but also constitutions and other arrangements regulating relations between these. In some cases also the party systems are mentioned in this category.

• Rational choice definition Institutions are “rules of the game” which represent equilibrium.

What is an institution?

• The „materialist definition“ (old institutionalism) Institutions refer mainly to the state, or more exactly to “government”. These are

cabinets, parliaments, courts, armies, but also constitutions and other arrangements regulating relations between these. In some cases also the party systems are mentioned in this category.

• Rational choice definition Institutions are “rules of the game” which represent equilibrium.

• Sociological institutionalists’ definition: Institutions are “believes, values and cognitive scripts”

What is an institution?

• The „materialist definition“ (old institutionalism) Institutions refer mainly to the state, or more exactly to “government”. These are

cabinets, parliaments, courts, armies, but also constitutions and other arrangements regulating relations between these. In some cases also the party systems are mentioned in this category.

• Rational choice definition Institutions are “rules of the game” which represent equilibrium.

• Sociological institutionalists’ definition: Institutions are “believes, values and cognitive scripts”

• Historical institutionalists’ definition “Past policies are institutions in terms of current policies”

How a Path Dependency is born?Factors necessary for a technology to become Path Dependency:

How a Path Dependency is born?Factors necessary for a technology to become Path Dependency:• Large set-up or fixed costs. These can be later spread over more

output. In this situation the decision makers tend to stick to the choice they have made

How a Path Dependency is born?Factors necessary for a technology to become Path Dependency:• Large set-up or fixed costs. These can be later spread over more

output. In this situation the decision makers tend to stick to the choice they have made

• Learning effects. The steeper the learning curve, the cheaper and more effective the chosen development path will be.

How a Path Dependency is born?Factors necessary for a technology to become Path Dependency:• Large set-up or fixed costs. These can be later spread over more

output. In this situation the decision makers tend to stick to the choice they have made

• Learning effects. The steeper the learning curve, the cheaper and more effective the chosen development path will be.

• Coordination effects. It is especially important if a technology need to be compatible with an infrastructure. The more coordination between the two, the stronger the DP will be

How a Path Dependency is born?Factors necessary for a technology to become Path Dependency:• Large set-up or fixed costs. These can be later spread over more

output. In this situation the decision makers tend to stick to the choice they have made

• Learning effects. The steeper the learning curve, the cheaper and more effective the chosen development path will be.

• Coordination effects. It is especially important if a technology need to be compatible with an infrastructure. The more coordination between the two, the stronger the DP will be

Why is a Path Dependency followed?

• The Process of Reinforcement (Lecours) Path dependency does not only mean following the same pattern of behavior or

way of thinking for a longer period of time. It also reinforces itself through the process of imposing certain solutions on its surrounding. It is especially clear in the energy sector: the electricity network is constructed in a way which promotes centralized energy production. In this way are the barriers for the entrance of new actors significantly increased.

Why is a Path Dependency followed?

• The Process of Reinforcement (Lecours) Path dependency does not only mean following the same pattern of behavior or

way of thinking for a longer period of time. It also reinforces itself through the process of imposing certain solutions on its surrounding. It is especially clear in the energy sector: the electricity network is constructed in a way which promotes centralized energy production. In this way are the barriers for the entrance of new actors significantly increased.

• The Issue of Retrenchement (Pierson, North) “…politicians never take the risk of alienating themselves from powerful

constituencies that are `attached` to the social programs that were implemented decades ago”

Institutional Change

• Why institutions need to change?

“…institutions embody the societal situation prevailing at the time of their birth because, once created, they have autonomy from society and their development follows a largely independent pattern.” Andre Lecours

How institutions change?• Exogenous shocks: wars, global financial crisis. These events

open up possibilities for an institutional change or force it (Lecours)

How institutions change?• Exogenous shocks: wars, global financial crisis. These events

open up possibilities for an institutional change or force it (Lecours)

• Isomorphism: institutions existing in a similar domain tend to look alike whatever the differences in their immediate environment. (Lecours)

How institutions change?• Exogenous shocks: wars, global financial crisis. These events

open up possibilities for an institutional change or force it (Lecours)

• Isomorphism: institutions existing in a similar domain tend to look alike whatever the differences in their immediate environment. (Lecours)

• Change is a result of tensions between institutions themselves. These tensions are result of “distinct, even contradictory, patterns of development and reproduction”. (Orren, Skowronek)

How institutions change?• Exogenous shocks: wars, global financial crisis. These events

open up possibilities for an institutional change or force it (Lecours)

• Isomorphism: institutions existing in a similar domain tend to look alike whatever the differences in their immediate environment. (Lecours)

• Change is a result of tensions between institutions themselves. These tensions are result of “distinct, even contradictory, patterns of development and reproduction”. (Orren, Skowronek)

• Institutions can also change in the result of learning (Peter Guy)

How institutions change?• Exogenous shocks: wars, global financial crisis. These events

open up possibilities for an institutional change or force it (Lecours)

• Isomorphism: institutions existing in a similar domain tend to look alike whatever the differences in their immediate environment. (Lecours)

• Change is a result of tensions between institutions themselves. These tensions are result of “distinct, even contradictory, patterns of development and reproduction”. (Orren, Skowronek)

• Institutions can also change in the result of learning (Peter Guy)

• Punctuated equilibria are moments of radical change in the institutionalist environment….: “rapid bursts of institutional change followed by long periods of stasis” (Krasner)

Additional approaches• Culturalist approach (Lipset, Hartz) “Political life of every country is framed by a historically

constructed set of “national values”. These values consist of expectations and taken-for-granted assumptions about economic and social realities.”

Additional approaches• Culturalist approach (Lipset, Hartz) “Political life of every country is framed by a historically

constructed set of “national values”. These values consist of expectations and taken-for-granted assumptions about economic and social realities.”

• The concept of veto player (Stephen J. Key) “A veto player is an individual or collective actor whose

agreement is required for a change in policy.”

Additional approaches• Culturalist approach (Lipset, Hartz) “Political life of every country is framed by a historically

constructed set of “national values”. These values consist of expectations and taken-for-granted assumptions about economic and social realities.”

• The concept of veto player (Stephen J. Key) “A veto player is an individual or collective actor whose

agreement is required for a change in policy.”• The concept of agenda setting (Kingdon) “The process that narrows the ‘set of conceivable

subjects to the set that actually becomes the focus of attention’”

Summary

• Main Thesis (again) „The decades old dependency path on coal in

the Polish energy sector is weakening and it opens up a window of oppurtunity for the development of new sources of energy.“

Path Dependency: Not much room left for other options

Thank you!

Additional questions that need to be answered

• In what degree is the institutional framework changing in Poland? Is it opening a chance for the dominance of a decentralised energy production? Or will the old dependency path be partly continued in the form of dependency on nuclear energy?

Additional questions that need to be answered

• In what degree is the institutional framework changing in Poland? Is it opening a chance for the dominance of a decentralised energy production? Or will the old dependency path be partly continued in the form of dependency on nuclear energy?

• In what degree are the changes in the Polish energy industry result of membership in the EU and what role are domestic factors playing?

Additional questions that need to be answered

• In what degree is the institutional framework changing in Poland? Is it opening a chance for the dominance of a decentralised energy production? Or will the old dependency path be partly continued in the form of dependency on nuclear energy?

• In what degree are the changes in the Polish energy industry result of membership in the EU and what role are domestic factors playing?

• Focus on the theoretical framework of institutional change. Can membership in the EU be considered an „Exogenous Shock“?

Why this topic?

• It can help to understand the differences not only between Poland and most of Western Europe but also between the old and the the new member states

• It will look deeper into the process of institutional change and may help to define factors necessary for the change to take place. It may answer the question: how an institutional change look like? Are the existing institutions re-invented? Or are new institutions created? What role are „ideas“ playing in shaping the new institutional framework?