Poland Revives $1.7 Billion Coal-Fired Plant

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Poland's state-owned electricity utility, Energa (Gdansk, Poland), has confirmed plans to build a new 1,000-megawatt (MW) coal-fired unit at Ostroleka, five years after shelving the project due to financing problems.

The project, which will be located at the existing Ostroleka plant in northeast Poland, will cost an estimated $1.7 billion and will involve fellow Polish energy major Enea S.A. (WSE:ENA) (Poznan, Poland). In 2012, Industrial Info reported that the project had been halted due to financial difficulties and unfavourable conditions in the construction market. For additional information, see September 26, 2012, article - Energa Shelves New Polish Coal-fired Plant.

The company said financing will be in place by next month and confirmed that it is going ahead with the Ostroleka C project without waiting for the government to introduce a power capacity market mechanism. The capacity market would provide income to power companies not just for supplying power but for keeping power plants online. Power capacity markets make electricity supply more secure and also allow utilities to raise money for building more power plants. The plant will secure supply in the northeast of the country and support the country's ailing coal-mining industry. A contractor will be chosen in the first quarter of next year when construction is expected to kick off. Commissioning is expected in 2023.

"When it comes to Ostroleka, generally we are not waiting for the law to be introduced," Daniel Obajtek, Energa's chief executive officer, told reporters. "This process will be conducted irrespectively of this."

Energa said it remains confident that the power capacity scheme will be introduced. The company's Chief Financial Officer Jacek Koscielniak commented: "We are in touch with the energy ministry, and we hope that the [power capacity] legislative process will have a positive conclusion for us."

Poland's Energy Minister Krzysztof Tchórzewski invited bids for the project last December: "We are modernising power plants, and new, efficient units are our priority. The tender announcement is for contractors in Europe. I am deeply satisfied that Poland will be able to develop based on energy from modern coal sources, such as the new unit in Ostroleka."

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