WARSAW (Reuters) - The European Commission's proposal to attach emissions limits to subsidies paid to utilities that set aside capacity to avert blackouts would be hasty and bad for the environment, Poland's energy ministry said.
A draft law published by the EU executive on Wednesday sets stricter rules on capacity mechanisms as the EU pushes to implement 2030 goals on reducing greenhouse gases.
Poland, which produces most of its electricity from highly-polluting coal in outdated power plants has hoped to launch a capacity market next year to help the state-run power companies start investment in new coal-fueled units.
"From our point of view this would be a hasty decision and not necessarily good for the environment," the ministry said in a statement sent to Reuters.
The ministry added it was looking forward to discussing the plans with EU representatives. The Commission's draft proposal still faces a lengthy approval process by member states and European Parliament before becoming law.
Wednesday's draft law will set a limit of 550 grams of carbon dioxide per kilowatt-hour for new plants, the source said, and give EU nations time to adapt existing capacity mechanisms already cleared by regulators.
"Attaching the potential limit could indeed be related with reducing support for carbon sources, even if clean coal technologies are used ... retrofitting existing generation units toward clean coal technologies would be undermined," the ministry said.
Poland needs to build new power generation plants as it faces the risk of power shortages, since it will have to switch off some of its oldest power plants in the coming years.
The pro-coal government wants to develop coal-fueled power stations rather than encourage investment in wind farms, which it says is an unstable source of energy.
(Reporting by Agnieszka Barteczko; Editing by Alissa de Carbonnel and Susan Thomas)