Challenging times – energy transition an opportunity for industry. Jacek Chodkowski, CEO of Dalkia Polska sp. z o.o., General director of Dalkia Polska Group
We are witnessing a major energy transition impacting all sectors of the economy. This is a tremendous change that is necessary to prevent further negative effects of global warming. The energy sector seems best prepared for the transition, will it lead the way?
The energy transition requires determined action, and it is about time to proceed to the implementation of practical solutions. This is where any delay works against businesses. Lessons learned in recent years and months, such as the COVID-19 pandemic, spikes in fuel, energy, and CO2 emission costs, along with the war in Ukraine, have made us live in a situation of constant uncertainty, but we all lose out on inaction. Achieving climate neutrality remains the only way to prevent further effects of global warming, and these are becoming more severe every year.
As a matter of fact, we should note that the energy transition will take place largely through the electrification of different sectors of the economy. An analysis conducted by the Team of the Centre for Climate and Energy Analyses (CAKE) at IOŚ-PIB/KOBiZE indicates that the share of electricity in Poland will increase from less than 20% to as much as 40% – 60% in the period 2020-2050. Our country, compared to the EU as a whole, has one of the most difficult tasks to perform due to the large share of fossil fuels, especially coal.
The fact that some industrial processes will not be able to be completely decarbonized impede achieving the reduction targets consisting in reducing net emissions. Hence the need to achieve the greatest possible reductions, or even so-called negative emissions, in all possible areas.
However, in my opinion, especially as a partner for industry, it is always worth starting with us to make changes. Decarbonization is the first of the three main pillars of the Dalkia Group’s new strategy until 2026, and this includes efforts to decarbonize our business, including all locations through the development of district heating networks, accelerating the transition away from coal in industry and in housing. Through the activities we carry out within our structure, we have a good understanding of our customers’ needs and the challenges they face.
Rising energy prices are challenging the industrial sector by impacting the production costs or the very maintenance of plants. Can we expect a reversal of this trend in the near future?
At the beginning of August, electricity rates on the Polish Power Exchange for next year’s delivery approached the limit of PLN 1,700 per MWh. Whilst getting used to rising prices, there is much we can do to ensure that the increases remain relatively less severe. This is especially important since costs related to its supply and use can account for as much as 70% of all fixed charges in the industrial sector. Making energy use more efficient is the first and most important step that can realistically reduce the cost of energy consumption. In other words, efficient use of energy aims to reduce the amount of energy necessary to achieve a given utility effect. In this regard, Poland is still dependent on imports. In fact, we still base our economy, including industry, on non-renewable energy sources, including imported ones. We should give priority to reducing its consumption and increasing the energy efficiency of the production process, installations, or facilities.
Outcome of scenarios that we can adopt towards the energy transition process show that the fastest increase in the cost of electricity generation, is expected in the next decade. This can mean a more than doubling of generation costs as early as 2020-2030 in the implementation scenarios of the “Fit for 55” package. The largest increase in costs occurs in the scenario assuming high fuel prices and restrictions on the availability of natural gas, which seems extremely likely given the current crisis.
The key, therefore, is to unlock investment in renewable energy as soon as possible, while securing new methods in this market, such as direct Power Purchase Agreements (PPA) between renewable energy producers and industrial consumers), unlocking the potential of “direct line” in a direct relationship between producer and industrial consumer, and cable pooling (e.g., the sharing of the transmission grid by a wind farm and a photovoltaic farm).
How to achieve energy efficiency? Are there universal methods to achieve it?
Analysis should always be the starting point. Any collaboration with a client, no matter what industry he or she represents, starts with a meticulous audit that allows us to identify which industrial processes consume the greatest number of utilities, heat, and energy. Doing so is the basis for introducing further measures and determining how to generate further savings. Methods to improve energy efficiency in industry can be many. For one customer, thermal insulation of industrial installations will be key, for another, energy recovery in processes or greater automation, while others will need a combination of all these actions.
Any entrepreneur who runs a medium- or large-scale industrial plant, where combustion plants of up to and 50 MW are used, and who is looking for ways to reduce consumption of energy carriers, production costs and reduce the carbon footprint, should be interested in this topic.
In industry, energy demand varies widely. Each plant needs an individual approach and solutions based on sound analysis. How to perform such an analysis and how to effectively implement the appropriate solutions?
Let me use the example of an industrial plant in the agro-food industry, which aimed not only to improve energy efficiency, but also to generate financial savings related to production costs. In such a case, cooperation should begin with an audit, allowing us to get to know the specifics of the client, identify the most energy-intensive areas of its operations, check the technological infrastructure, and compare it with expectations. Following the analysis stage, our team prepares solution proposals, an implementation plan and an estimation of their efficiency and benefits of modernisation.
In the aforementioned case, this resulted in the development of a solution to insulate the steam plant, which will save the entrepreneur nearly PLN 1 million a year. Sometimes the fear of taking action in the area of efficiency is the need for a financial investment, so let me add that, as Dalkia, we help the client to obtain the appropriate funds – the cost of the mentioned investment was fully financed by obtaining white certificates.
Can diversification of energy sources be key for businesses? How renewable energy sources can play a role in a company’s energy mix.
Yes, indeed. Whenever we think about the competitiveness of our business, we always consider the fixed costs that our company generates. Among them, energy-related costs are a significant part. Increasing energy independence, investing in our own sources or energy from RES, and thus building an energy mix, increases the security of our business. We also look at the energy mix on a macro scale, where we pay attention to avoid becoming dependent on one type of raw material. Hence, when we talk about the energy transition at the global level, we pay attention to the role of the atom, the potential of green hydrogen, biomass-based technologies with the ability to capture and store CO2, all of this to take advantage of the potential of different sources.
Dalkia offers an energy outsourcing service, what does it consist of?
This service involves the supply of energy utilities, including electricity and heat, waste heat, process steam, refrigeration, compressed air, etc., generated as part of the energy transition of a given industrial plant. This activity is closely related to DBOOT’s new energy transition financing scheme. As part of the DBOOT service, Dalkia carries out the analysis and conceptualisation of the project with full design and administrative permits (Design), builds and implements (Build), provides full CAPEX financing, and maintains the facility (Own), operates, maintains, and optimizes over the operating life of 5 to 15 years (Operate), then transfers the facility to the customer after the contractual life (Transfer). What is important from a business perspective is that we guarantee the achievement of the specified KPIs of the plant (plant efficiency, operating parameters, energy production levels, etc.) and undertake to supply the contractual volume of utilities. Thus, the customer can count on full support at every stage of the project.
One last question – Dalkia has always supported women and recognised their role in the energy sector. Please tell us more about your cooperation with the Silesian University of Technology within the “Women’s Energy In Transition – Polish Edition” project?
The energy sector is one of the more masculinised ones which proves for example, a recent study carried out by the International Renewable Energy Agency IRENA, which found that women make up only 22% of the workforce in the oil and gas sector and 32% in the renewable energy sector. This is a massive disparity, not least in the face of an energy transition that will require innovative solutions and a larger share of a diverse talent pool. Thus, the role of women in the energy sector can hardly be overestimated. Inspired by Dalkia’s program in France, we decided to launch the Polish edition of the Women’s Energy In Transition award for the best dissertations defended in 2021-2022, on the subject of energy transition, written by female energy-related students. The winners will be offered an internship at one of the companies in the Dalkia Poland Group, as well as cash prizes. We believe that the program will become the beginning of many female careers and a real support for talent in our sector.
Jacek Chodkowski – CEO of Dalkia Polska sp. z o.o., General director of Dalkia Polska Group
He graduated from the Faculty of Power and Aeronautical Engineering of the Warsaw University of Technology. He obtained the EMBA title after completing his studies at the Warsaw University of Technology Business School.
He started his professional career in 2004 at Vattenfall Heat Poland, in the Warsaw Heat and Power Plants. In the years 2009–2013 he was the manager of production plants in Warsaw. In 2013, he became the director of the Siekierki Heat and Power Plant in Warsaw. In 2015, he joined the management board of PGNiG Termika.
In 2018, he joined the Dalkia Polska group as the CEO of Dalkia Polska Energia in Katowice. At the beginning of July 2021, he became the CEO of Dalkia Polska and the general director of Dalkia Polska group.
Last Updated on September 6, 2022 by Anastazja