Poland’s district heating decarbonization is progressing at a solid pace, according to representatives of Polska Spółka Gazownictwa (PSG). One of the key indicators is the growing share of natural gas used in combined heat and power plants across the country. The company argues that as green energy from photovoltaics and wind continues to expand, gas can serve as a stabilizing fuel not only in the short term, but over a much longer horizon. At the same time, further decarbonization of the sector will require significant investment outlays and financing mechanisms that support the transition.
A report by Polityka Insight, Through Gas to Renewables: Decarbonization of District Heating in Poland, indicates that gas will remain the primary fuel in the transformation of Poland’s district heating sector due to its relatively favorable economic and environmental characteristics. According to the report’s authors, decarbonizing the sector over the next 30 years would be practically impossible without gas-fired heating plants and combined heat and power units.
“The pace of transformation in district heating is, in my view, very good. From the perspective of Polska Spółka Gazownictwa, we are seeing a very clear increase in applications for grid connections from the broadly understood professional energy sector. Since 2020, we have connected more than 213 entities. In 2025 alone, we signed 50 connection agreements. Altogether, we are currently servicing 88 contracts,” Jerzy Sitko, member of the management board of Polska Spółka Gazownictwa, told Newseria news agency.
He emphasized that, thanks to the connections completed over the last five years, the company now distributes around 600 million cubic meters of gas annually to combined heat and power plants. The implementation of agreements already signed is expected to raise the volume of gas used to 1 billion cubic meters by 2030.
“In our view, gas is no longer just a stabilizing fuel, but a permanently stabilizing one. Today, we do not see a near-term horizon in which gas would begin to be phased out. This is also because the entire energy market expects a huge increase in overall energy consumption,” the PSG board member stressed.
According to the Polish transmission system operator PSE, in its development plan for meeting current and future electricity demand for 2027–2036, annual net electricity consumption could reach around 260 TWh by 2040.
“That means almost a doubling of demand. Something will have to fill that missing volume, and we believe gas is an ideal source for this,” Jerzy Sitko said in an interview during the 43rd EuroPOWER & OZE POWER Energy Conference.
According to data published by Poland’s Ministry of Energy, coal still dominates the country’s district heating sector, but its role is steadily declining: from 61.2% in 2023 to 57.4% in 2024. Since 2002, coal consumption in the sector has dropped by 24.3 percentage points. At the same time, the share of natural gas has risen to 15.2%, while renewables have reached 14.7%.
The updated draft of Poland’s National Energy and Climate Plan (NECP), published in December 2025, assumes that district heating will be decarbonized through an increase in the share of renewables to 32–36% by 2030 and to 43–57% by 2040, depending on the chosen transformation scenario: balanced (WEM) or accelerated (WAM). Under the more ambitious scenario, the last coal-fired CHP plant is expected to cease operations by 2040. The goal is for district heating to be produced in systems with a high penetration of renewables, using electricity, waste heat and the complementary role of gas fuels. The draft also underlines that in large-scale systems, investments in gas-fired cogeneration capacity may still be needed, with natural gas expected to be gradually replaced in the future by biomethane and other decarbonized gases.
The NECP also announces that a financial plan for the transformation of district heating will be developed to ensure a coordinated financing model based on cooperation between various institutions.
“Financing will be crucial because the National Energy and Climate Plan includes several very important elements in its assumptions. These will have an impact on the cost of the transition,” the expert explained.
The draft plan assumes a reduction in greenhouse gas emissions across the economy by 43% by 2030 under the WEM scenario and by 53% under the WAM scenario. By 2040, these reductions are expected to reach 61% and 75%, respectively.
“We also see the need to finance costs ranging from 55 to nearly 200 euros per tonne of carbon dioxide, meaning emissions resulting from the introduction of the ETS2 system,” the PSG board member noted.
The European Commission points out that ETS2 is intended to help reduce emissions by 42% by 2030 compared with 2005 levels. It will cover emissions generated by the combustion of fossil fuels in buildings, road transport and other sectors, mainly smaller industries not already covered by the existing ETS1 system.
“At this point, entities in the professional energy sector will certainly be looking for financing to cover investment outlays. These are necessary to rebuild a system that is still largely coal-based into one based, for example, on gas, which could serve as a stabilizing energy carrier for generation capacity. Especially when we want to reconcile clean energy from sources such as photovoltaic panels and wind, which do not operate steadily within the system,” Jerzy Sitko said.
According to the NECP, natural gas consumption is expected to peak in 2030. Under the WEM scenario, it is projected to reach 23.5 billion cubic meters, and under the WAM scenario, 24.7 billion cubic meters. By 2040, however, consumption is expected to decline to 19.3 billion cubic meters in WEM and 13.6 billion cubic meters in WAM. At the same time, the importance of decarbonized and renewable gases is expected to increase.
A range of investments linked to decarbonization will be carried out in the coming years. As the expert stresses, their long-term efficiency will be decisive.
“As PSG, we take a very critical approach to the assets we want to build in terms of their economic efficiency. We have the proper procedures in place and we assess the efficiency of every investment each time. We do not allow infrastructure to be built if it does not meet strict efficiency requirements,” the PSG board member emphasized. “We are also acting from another angle by introducing what we call a digital absorption map. On our website, we have published a tool that shows in which regions of the country investments should be considered, for example in terms of locating biogas plants, so that biomethane can be injected into our networks as close as possible and with the lowest possible investment outlays on the customer’s side.”
