Poland's Tauron and KGHM to Build 900-Megawatt Coal-Fired Power Plant in Blachownia

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Researched by Industrial Info Resources (Sugar Land, Texas)--The Polish energy group Tauron Polska Energia SA (Katowice) and copper miner KGHM Polska Miedz SA (WAR:KGHM) (Lubin, Poland) have agreed to cooperate in the development of a 900-megawatt (MW) coal-fired power plant at the facility of the existing Elektrownia Blachownia plant in Poland.

Tauron and KGHM previously agreed to similar plans in 2007, but no concrete plans emerged from the agreement. Now the two companies have signed a letter of intent specifically to add the extra power generation capacity at the Elektrownia Blachownia plant, which is owned by Tauron. The project is part Tauron's plans to add 3,000 MW of power-generating capacity by 2012. Tauron and KGHM will form a working party to investigate the details of investments and will produce their report by September 30, 2009.

The Elektrownia Blachownia plant, located at Kedzierzyn-Kozle in south Poland, currently has three turbines installed in the existing coal-fired power plant. The station has an electrical capacity of 158 MW and a thermal capacity of 174 MW. First constructed in 1959 and subject to several changes thereafter, the power plant now delivers electricity to the national grid through a 110-kilovolt (kV) transformer station. Thermal energy produced is mainly consumed by the local chemical industries.

KGHM is one of the world's largest copper and silver producers and is the third largest corporation in Poland. In addition to mining activities, the company is also involved in smelting and refining operations, which enable KGHM to manufacture cathodes, rods and billets from copper and silver raw materials.

Tauron was formed in December 2006 as part of the Polish government's "Program for Power" initiative to establish large power generation and distribution companies capable of competing with other European firms in the power sector. The group contains 92 business units and is the second largest electricity producer in Poland, controlling 17% of the country's hard coal reserves. With sales of 34.5 terawatt-hours of electricity, Tauron has the best sales results in Poland and has almost 4 million customers in an area of about 53,000 square kilometers, approximately 17% of the land area of Poland.

On May 9, 2007, the Polish treasury contributed 85% of the shares held in Enion SA (Krakow, Poland), EnergiaPro Koncern Energetyczny SA (Katowice), EnergiaPro (Wroclaw, Poland), and the power station Elektrownia Stalowa Wola SA (Stalowa Wola, Poland) to the newly formed Tauron. A few days later, the Ministry of Treasury contributed 95.5% of the shares in Elektrocieplownia Tychy (Tychy, Poland). In August 2007, Tauron took over 95.66% of Przedsiebiorstwo Energetyki Cieplnej (Katowice), a heat distribution company.

In December last year, Tauron presented a strategy for investing $4 billion during 2008-12. About $2.65 billion has been earmarked for coal mining, renewable energy and power generation, and $1.5 billion will be invested in the electricity distribution networks owned by the group. For the period, 2013-20, the group is expected to invest more than $6 billion. For related news item, see article from April 16, 2009 - Poland's PGE to Retrofit Belchatow in $210 Million Deal.

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