In 2025, Poland curtailed approximately 1.4 TWh of energy from renewable sources—nearly twice as much as the previous year. At the same time, the number of hours with negative energy prices rose to 315, and as many as 97.8% of the cases of renewable energy curtailments were due to a lack of system flexibility. , rather than due to grid constraints. PSEW, RE-Source Poland Hub, and Horizons Power to Heat are presenting a solution that can increase the use of renewable energy, support the transformation of the heating sector, and improve the security of the national power system. The authors propose using district heating as a flexible consumer of surplus renewable energy through Power-to-Heat technologies and thermal storage systems.

The rapid growth of renewable energy sources remains one of the cornerstones of Poland’s energy transition. At the same time, as the share of energy from renewable sources increases, the power system’s ability to efficiently utilize the energy produced is becoming increasingly important. The latest report, “Sector Coupling in Poland: Utilizing Renewable Energy Surpluses in District Heating through Power-to-Heat and Thermal Storage,” prepared by the Polish Wind Energy Association, RE-Source Poland Hub, and Horizons Power to Heat, shows that one of the most important elements of the ongoing transformation should be the integration of the electricity sector with the heating sector.

District heating can become a partner in the development of renewable energy sources

Poland’s district heating system is one of the largest in Europe and has the potential to support the further development of renewable energy sources. In 2024, district heating companies produced approximately 102 TWh of heat, which corresponds to nearly 60% of the country’s electricity generation, and 57.4 TWh of heat was delivered to consumers. Given its scale, the sector could become a natural recipient of surplus energy from renewable sources and an important factor in increasing the flexibility of the national power system.

The report indicates that power-to-heat technologies—primarily electric boilers, large-scale heat pumps, and thermal storage systems—enable the use of surplus electricity to generate heat. This solution makes it possible to increase the use of energy from renewable sources, limit the need to curtail the operation of renewable energy installations, and gradually reduce the use of fossil fuels in district heating.

“The report on the use of surplus renewable energy in district heating through Power-to-Heat technologies and thermal storage is an important element of the energy transition. It aligns with the district heating development strategy and the objectives of UDR92, which was recently adopted. I am convinced that the solutions presented in this report will be an important part of the future of the Polish energy system and the Polish district heating sector.” – Konrad Wojnarowski, Undersecretary of State, Ministry of Energy

Heat Storage Is the Key to Fully Utilizing Green Energy

The authors of the report emphasize that fully realizing the potential of Power-to-Heat requires the development of heat storage systems. These systems make it possible to store energy generated during periods of high renewable energy production and use it when the demand for heat is greatest.

Analyses show that, with the use of thermal storage, the technical potential for utilizing surplus energy from renewable sources is approximately 42 TWh per year, or nearly 40% of current district heating production. Without storage, this potential drops to approximately 6 TWh. By 2035, the realistic implementation potential is estimated at approximately 3.9 TWh, using approximately 2.5 GW of electric boilers.

“Power-to-Heat is not an alternative to the development of renewable energy sources, but a technology that allows us to better harness their potential. The combination of electric boilers, large-scale heat pumps, and heat storage systems makes it possible to utilize surplus energy from renewable sources, reduce system balancing costs, and gradually decarbonize the heating sector. This solution benefits both the power grid and heat consumers”— Filip Jankun, CEO of Horizons Power to Heat, co-author of the report.

Regulatory changes are needed

The report indicates that the biggest barriers to the development of Power-to-Heat technology today are regulatory in nature. Under the current tariff system, even during hours when electricity costs 0 PLN/MWh, the total cost of using it in an electric boiler exceeds 330 PLN/MWh due to capacity charges and other regulated fees. As a result, consumers are not incentivized to use electricity precisely when the system needs it most.

Therefore, the authors recommend implementing a “green hours” (IDC) mechanism, which provides for a temporary exemption from capacity charges and a portion of distribution charges for consumers who use surplus energy from renewable sources. This solution could significantly increase the profitability of investments in Power-to-Heat and accelerate the development of technologies that support the integration of RES into the national power system.

“The report does not address the question of whether to develop renewable energy sources—that is obvious. Instead, it shows how to ensure that energy from new sources is used more efficiently and brings greater benefits to the entire economy. The integration of the electricity sector with the heating sector could become one of the most important stages of Poland’s energy transition.”— Szymon Kowalski, Vice President of the Board of the RE-Source Poland Hub Foundation and co-author of the report.

An Investment in the Future of Poland’s Energy Sector

The transformation of Poland’s district heating sector will be one of the largest infrastructure projects of the coming decades. According to the report, the capital expenditures needed by 2050 will range from 299 to 466 billion zlotys. The authors emphasize that these investments should not only lead to the decarbonization of the sector but also increase the system’s capacity to utilize growing renewable energy production and strengthen Poland’s energy security. The development of Power-to-Heat technology and heat storage systems could simultaneously provide a boost to domestic industry and the European supply chain for modern energy technologies.

About the Report

The report “Sector Coupling in Poland: Utilizing Renewable Energy Surpluses in District Heating Through Power-to-Heat and Thermal Storage” was prepared by the Polish Wind Energy Association, the RE-Source Poland Hub Foundation, and Horizons Power to Heat. The document analyzes the potential for integrating the electricity and heating sectors, identifies regulatory barriers, and presents recommendations for actions that could increase the use of energy from renewable sources, reduce the scale of RES plant curtailment, and accelerate the decarbonization of Poland’s district heating sector.

The full report is available here: https://www.psew.pl/wp-content/uploads/2026/07/RE-Source-Sector-coupling-w-Polsce_2026-1.pdf