POLAND'S TRANSITION TO A MARKET ECONOMY: PROSPECTS FOR ENERGY EFFICIENCY AND CONSERVATION

Arthur E. McGarity, Editor

Department of Engineering

Swarthmore College

Swarthmore, Pennsylvania USA

Recent dramatic changes in Poland are attracting worldwide attention as the Polish people take a leading role in the process of transforming the social structure of Central and Eastern Europe and the former Soviet Union. In September 1989, a new government led by the Solidarity trade union took power in Warsaw. This government committed itself to transforming the centrally planned economy imposed by the former Communist government into a free market economy. On January 1, 1990, price controls on most products were removed, and Poland began its experiment with the “cold bath” or “shock therapy” approach to free market transition. Almost overnight, the long waiting lines outside stores, so often associated with life in the Soviet Bloc, disappeared. The stores began to fill with goods, and new privately owned shops appeared.

However, the transition, which is happening so rapidly in the commercial sector, is proceeding at a much slower pace in the industries and infrastructure of Poland. Many fundamental changes are necessary to make Polish industries competitive in the global market. Many of these changes require large investments in new processes and equipment. Without such investment, very few of the products sold in the new privately owned shops will be manufactured in Poland.

Fundamental changes are also necessary to improve Poland's environmental quality. The former government demonstrated little regard for protection of the environment during its forty years in power. In spite of many laws specifying requirements for air and water quality, government-owned industries, electric generating stations, and district heating plants were operated for decades with inadequate pollution control. With coal providing the vast majority of energy supplied to most sectors of the economy, the pollution problems associated with energy production are the dominant factors creating poor environmental quality in many areas of the country.

Saline water is pumped from deep coal mines in Upper Silesia and discharged without treatment into the Vistula and Oder rivers, making them unsuitable for use over hundreds of kilometers as they flow towards the Baltic Sea. Sulfur dioxide and particulates are emitted in great quantities from steel mills and from furnaces and boilers that range in size from large electric generating stations to small manually-fed heaters in individual apartments. Particulates are removed from flue gases mainly at the large stations, but less frequently at the many smaller heating plants that supply space heat to blocks of apartments. Manually-fed coal heaters that emit pollutants from low chimneys are still in widespread use and are substantial



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Poland's Transition to a Market Economy: Prospects for Energy Efficiency and Conservation: Proceedings of the Joint Workshop of the U.S. National Academy of Sciences and the Polish Academy of Sciences on Strategies for Industrial Energy Efficiency and Conservation During the Transition to a Market Economy POLAND'S TRANSITION TO A MARKET ECONOMY: PROSPECTS FOR ENERGY EFFICIENCY AND CONSERVATION Arthur E. McGarity, Editor Department of Engineering Swarthmore College Swarthmore, Pennsylvania USA Recent dramatic changes in Poland are attracting worldwide attention as the Polish people take a leading role in the process of transforming the social structure of Central and Eastern Europe and the former Soviet Union. In September 1989, a new government led by the Solidarity trade union took power in Warsaw. This government committed itself to transforming the centrally planned economy imposed by the former Communist government into a free market economy. On January 1, 1990, price controls on most products were removed, and Poland began its experiment with the “cold bath” or “shock therapy” approach to free market transition. Almost overnight, the long waiting lines outside stores, so often associated with life in the Soviet Bloc, disappeared. The stores began to fill with goods, and new privately owned shops appeared. However, the transition, which is happening so rapidly in the commercial sector, is proceeding at a much slower pace in the industries and infrastructure of Poland. Many fundamental changes are necessary to make Polish industries competitive in the global market. Many of these changes require large investments in new processes and equipment. Without such investment, very few of the products sold in the new privately owned shops will be manufactured in Poland. Fundamental changes are also necessary to improve Poland's environmental quality. The former government demonstrated little regard for protection of the environment during its forty years in power. In spite of many laws specifying requirements for air and water quality, government-owned industries, electric generating stations, and district heating plants were operated for decades with inadequate pollution control. With coal providing the vast majority of energy supplied to most sectors of the economy, the pollution problems associated with energy production are the dominant factors creating poor environmental quality in many areas of the country. Saline water is pumped from deep coal mines in Upper Silesia and discharged without treatment into the Vistula and Oder rivers, making them unsuitable for use over hundreds of kilometers as they flow towards the Baltic Sea. Sulfur dioxide and particulates are emitted in great quantities from steel mills and from furnaces and boilers that range in size from large electric generating stations to small manually-fed heaters in individual apartments. Particulates are removed from flue gases mainly at the large stations, but less frequently at the many smaller heating plants that supply space heat to blocks of apartments. Manually-fed coal heaters that emit pollutants from low chimneys are still in widespread use and are substantial

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Poland's Transition to a Market Economy: Prospects for Energy Efficiency and Conservation: Proceedings of the Joint Workshop of the U.S. National Academy of Sciences and the Polish Academy of Sciences on Strategies for Industrial Energy Efficiency and Conservation During the Transition to a Market Economy contributors to air pollution in many areas, such as the old city center of Krakow and parts of Upper Silesia. Sulfur dioxide removal from flue gases occurs rarely in Poland. Thus, Poland's transition to a market economy requires great investments both to improve the efficiency of production and to improve the quality of the environment. Achieving these goals will require a carefully devised long-term strategy to direct the severely limited funds presently available for investment. A particularly important component of this strategy will be projects aimed at improving the efficiency of energy conversion, distribution, and use. Such projects contribute simultaneously to economic efficiency and environmental quality by reducing energy costs and by reducing pollution emissions. Because of its heavy dependence on coal, Poland provides one of the best examples in the world of the direct link between the efficiency of energy use and the quality of the environment. A 50% reduction in energy use can frequently result in an identical reduction in pollution emissions. Fortunately, there are many influential persons in Poland who are aware of the potential advantages of strategically directed investments in improved energy efficiency. One such group of experts has been assembled by the Polish Academy of Sciences (PAN) for the purpose of interacting with the international community of energy planners, managers, educators, and researchers. Most of these experts have been involved in Poland's energy sector for decades, and many have been working diligently for years to improve the efficiency of energy use in spite of minimal support under the previous government. Interactions between this Polish group of energy experts and counterparts in the U.S., assembled by the U.S. National Academy of Sciences (NAS), began with a workshop in Poland hosted by PAN in 1990. The proceedings of that conference were published by PAN1. A second workshop was hosted by NAS in 1991 in Washington, D.C., and the papers included in this volume are based on presentations made at that workshop. The contacts among participants that occurred during these workshops and the associated visits to institutions in Poland and the U.S. have resulted in ongoing relationships and projects. One example is the link between the PAN energy delegation and the Pennsylvania Energy Office (PEO), which is a branch of the state government under the direction of the Lieutenant Governor. Pennsylvania has characteristics of climate, industrial base, and energy supply similar to Poland's. PEO hosted the Polish group for a series of meetings and site visits at several locations in Pennsylvania during the week before the 1991 workshop. These meetings are listed in Appendix II of this volume. A delegation from PEO visited Poland for three weeks in 1992, and the Polish delegation returned to Pennsylvania in 1993 to continue the process of sharing information and developing joint projects. The papers in this volume include contributions from the Polish participants in the workshop and from several of the U.S. participants. The primary focus is the situation in Poland regarding the prospects for improving energy efficiency and conserving energy 1   Energy Conservation Policy, Journal of the Center of Fundamental Problems of Mineral Resources and Energy Economy, Special Issue I/90, Polish Academy of Sciences, Ruda Slaska, Poland.

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Poland's Transition to a Market Economy: Prospects for Energy Efficiency and Conservation: Proceedings of the Joint Workshop of the U.S. National Academy of Sciences and the Polish Academy of Sciences on Strategies for Industrial Energy Efficiency and Conservation During the Transition to a Market Economy supplies. Topics related to the U.S. experience with energy efficiency and conservation are covered in the papers of the U.S. participants. The papers are classified according to five themes: (I) Energy Efficiency and Conservation Policy, (II) Education and Training for Energy Efficiency, (III) Industrial Energy Efficiency Management, (IV) Energy Efficiency in Buildings, and (V) Energy and Environment. These themes are obviously related, and some papers could be classified under more than one of them. Accordingly, the classification should not be considered a way of separating the topics raised, but as a way of focusing attention on certain dominant themes in each of the papers. The papers by the Polish contributors are concerned mainly with the identification of problems that exist in the energy infrastructure of Poland. The papers by U.S. contributors focus primarily on solutions that are being applied in this country to related problems. This fact might lead the reader to conclude mistakenly that the main purpose of the workshops was to discuss ways that Poland can benefit from U.S. experience with energy efficiency and conservation. Actually, there was much flow of useful information in both directions at these workshops. There has been significant progress in the U.S. in understanding how energy is used and how it can be saved. However, there is much more work to be done in this country on energy efficiency and environmental quality improvements, and the investment funds required to accomplish this work are also in short supply. There is much that we can learn about our own problems by working with Polish experts as they search for the best solutions to their energy problems. I hope that these proceedings will contribute to that learning process. Arthur E. McGarity Swarthmore Pennsylvania November, 1993

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