Ostroleka power station

From Global Energy Monitor

The Ostrołęka Power Station is a 647 megawatt (MW) coal-fired thermal power station in Ostrołęka, Poland. A 1,000 MW expansion (unit C) has been cancelled and replaced with a proposal for a gas-fired plant.

Location

The undated satellite photo below shows the Ostroleka Power Station in Masovian.

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Background on existing plant

Ostroleka Power Station is owned by Energa. The power station consists of two parts. The Ostrołęka A combined heat and power plant has an installed capacity of 93MW electricity and 456MW of heat, built in 1956 to 1958. It was retired in 2015. The Ostrołęka B power station was built in 1972. It consists of three units with combined installed capacity of 647MW.[1]

Proposed power station

Construction of a new 1,000 MW unit, known as Ostroleka C, had been expected to start in 2013 with commissioning scheduled in 2015. Coal would be supplied by coal from the Bogdanka coal mine.[2]

In September 2012 ENERGA S.A. announced that it had suspended plans to build the new plant due to problems securing financing. The company said that it would continue looking for a strategic partner but failure to secure one would mean freezing the project until more beneficial market conditions prevail. In October 2012 Energa said it was considering switching from coal-fired generation to using gas as a feedstock fuel for the shelved unit, and may also reduce the unit’s proposed capacity by more than half to 450 MW.[3]

During a visit to Ostroleka in October 2015, the president of the Law and Justice party declared the government will return to the exploration of coal mines for Polish energy independence, and will revive plans for the Ostroleka coal plant.[4]

In November 2015 it was reported that Energa and Enea are considering cooperating in the construction of the new unit at Ostroleka. However, talks are at a very preliminary stage.[5]

In September 2016 Energa and Enea signed a letter of intention regarding development of a 1,000 MW coal plant in Ostroleka. They say permits for the plant are still valid, and the companies plan to call for tenders before end-2016 to begin construction. The planned completion date is 2023.[6]

In December 2016 Energa and Enea began planning to invite bids to build the plant.[7] It is planned for commissioning on December 31, 2023.[8]

In September 2018, Enea’s shareholders voted in favor of the company joining the project with Energa.[9]

In October 2018 a groundbreaking ceremony was held at the power station.[10]

Shortly after the groundbreaking ceremony, ClientEarth launched legal action against Enea over the company’s decision to participate in the consortium proposing to build the 1000 MW Ostroleka C plant. ClientEarth, which is a shareholder in Enea, argues the project poses an unacceptable risk to investors due to rising carbon prices, competition from cheaper renewables and exposure to European Union energy reforms on state subsidies for coal power plants. The investment agreement between Enea and Energa, the other utility in the consortium, allows either utility to withdraw from the project before the commencement of construction if it is considered that the plant will be unprofitable.[11]

Construction began in December 2018. The general contractor for the plant's construction is a consortium of GE Power and Alstom. The plant is reported to be ultra-supercritical.[12]

In August 2019, a Polish district court ruled as invalid Enea's 2018 decision to join the project with Energa. Enea said it will appeal the decision.[9]

In November 2019, Polish Climate Minister Kurtyka said it was "investors' decision whether Ostrołęka C is built", indicating the project no longer had the support of the government. Poland's state-owned power company PGE Group has officially withdrawn from the talks and will not become the third investor in Ostrołęka C. The project is still seeking financing.[13] The following day it was reported that former vice Energy Minister turned Member of the European Parliament Grzegorz Tobiszowski, a supporter of Ostroleka C, said too much time had passed to build the coal plant.[14]

In December 2019, Polish petrochemical company PKN Orlen announced its planned takeover of ENERGA Elektrownie Ostroleka S.A., one of the sponsors of Ostrołęka C.[15]

In February 2020, Reuters reported that ENERGA and Enea had decided to freeze their financing of Ostrołęka C which could result in the freezing of the plant's construction, only 5% completed. Among the reasons given for this decision were the companies' inability to secure bank financing for the controversial project as well as PKN Orlen's signalling that it may choose to use gas instead of coal as a fuel source for the plant.[16]

In May 2020, following Polish oil refiner PKN Orlen's takeover of Energa, PKN Orlen announced that it will only complete the power plant if it is fueled by gas and not coal. It remains unclear when a decision on the potential coal to gas plant switch will be made.[17]

In June 2020 the project promoters confirmed that Ostrołęka C was cancelled following a comprehensive analysis which found the project to be unfeasible largely due to the promoters' inability to source financing from international lenders. A trilateral agreement was struck between Energa, Enea and PKN Orlen to pursue the conversion to a gas plant at the site.[18] Enea then announced in December of 2020 it was leaving the project.[19] The developers are currently PKN Orlen, Energa, and Polskie Górnictwo Naftowe i Gazownictwo (PGNiG).

Project Details

  • Sponsor: PKN Orlen S.A. and ENERGA S.A. [51%], Polskie Górnictwo Naftowe i Gazownictwo (PGNiG) [49%] [20]
  • Parent company: PKN Orlen S.A., Polskie Górnictwo Naftowe i Gazownictwo (PGNiG) [21]
  • Location: Ostroleka, Masovian, Poland
  • Coordinates: 53.103611, 21.6125 (exact)
  • Type: Ultra-supercritical
  • Coal Type: Hard coal/biomass
  • Coal Source: Bogdanka coal mine
  • Source of financing: ENERGA and Enea have been financing Ostrołęka C with their own capital but, as of March 2020, have been unable to secure bank financing for the project
  • Gross generating capacity (operating): 647 MW
    • Unit B: Coal-fired, 647 MW (start-up in 1972)
  • Gross generating capacity (proposed): 750MW
  • Gross generating capacity (cancelled): 1000 MW
    • Unit C: Coal-fired, 1000 MW (start-up in 2023)
  • Gross generating capacity (retired): 93 MW
    • Unit A: Gas-fired cogeneration, 93MW (start-up in 1956-1958)

Opposition

On April 16, 2018, eight civil society organizations called on Poland to divest from ENERGA and ENEA, two companies implementing the coal plant in Ostroleka. The organizations cite harmful impacts of the plant on asthma in children as well as being “profit-oriented.”[25] A report by Michal Hetmanski and Filip Piasecki in Warszawa 2018 of Poland also identified how the Ostroleka plant is not a rational project, as it suggests high environmental costs as well as financial costs.[26] Another report by the Carbon Tracker Initiative in August 2018 highlighted how the net value of the Ostroleka power plant is negative and is a clear financial risk to investors.[27]

In October 2018, ClientEarth filed a legal challenge against the Polish energy company Enea to greenlight the Ostroleka power plant. With ClientEarth being represented by international litigation firm Boies Schiller Flexner, as well as Karasek & Wejman in Polish court proceedings, judges in Gdansk, Poland revoked the power plant permit. Judges agreed that the regional authority’s decision-making process was unlawful.[28]

On December 3, 2019, the Supreme Audit Office (NIK) published a report that confirmed concerns over coal plants in Poland, including Ostroleka power plant. The companies in charge of Ostroleka were ordered to pay fines and penalties for the problems in the construction plans of Ostroleka.[29] By February 2020, finances for Ostroleka were pulled as a result of “changing market circumstances triggered by climate policy, and the continued flight of global capital away from coal.” Court rulings against the companies in charge of Ostroleka from ClientEarth had deemed the Ostroleka plant invalid and lacking proof of profit.[30]


Articles and Resources

Sources

  1. "Ostroleka B Coal Power Plant Poland". GEO. Retrieved 2016-04-19.
  2. "Energa upgrading Ostroleka power station". Construction Sector in Poland. PMR. 2008-06-30. Retrieved 2010-12-04.
  3. "Power in Europe," Platts report, Issue 675, April 28, 2014 (subscription only).
  4. "W Ostrołęce powinna powstać elektrownia," eostroleka, Oct 12, 2015
  5. "Energa i Enea rozważają współpracę przy projekcie w Ostrołęce," cire.pl, Nov 17, 2015
  6. "Energa i Enea zamierzają współpracować przy projekcie Ostrołęka C," WNP, Sep 19, 2016
  7. "Energa and Enea invite bids to develop Ostroleka C power project in Poland," EBR, 23 December 2016
  8. "PSE wybrały budowniczego linii do Elektrowni Ostrołęka," WNP, 29-05-2018
  9. 9.0 9.1 "Polish court ruling undermines Poland's last coal power plant plan," Reuters, Aug 1, 2018
  10. "Rozpoczęły się pierwsze prace przy realizacji Elektrowni Ostrołęka C," Forsal.pl, October 16, 2018
  11. "World-first climate risk case launched over major coal plant in Poland," Client Earth, 29 October 2018
  12. "Jest NTP dla Elektrowni Ostrołęka C," Grupa ENERGA, 29.12.2018
  13. "Kurtyka: Inwestorzy zdecydują czy chcą rozbudować Elektrownię Ostrołęka C," Biznes Alert, 25 November 2019
  14. "Stępiński: Czy marzenie o Elektrowni Ostrołęka C pryśnie?" Biznes Alert, 26 November 2019
  15. "Announcement of a tender offer to subscribe for the sale of all shares of ENERGA S.A. with registered office in Gdansk," Orlen, 05-12-2019
  16. "Polish utilities suspend coal-fueled plant project," Reuters, February 13, 2020
  17. "Poland's PKN prefers gas as fuel for new Ostroleka power plant," Reuters, May 19, 2020
  18. "Informacja nt. przeprowadzonych analiz oraz zawarcie dodatkowego trójstronnego porozumienia w związku z realizacją projektu Ostrołęka C," Energa, Jun. 2, 2020
  19. Orlen, Energa, PGNiG to build gas power station in eastern Poland, The First News, Dec 23, 2020
  20. PKN Orlen, Energa and PGNiG applied to UOKiK regarding CCGT Ostrołęka, Forsal, Feb 24, 2021
  21. Orlen Group Structure, Orlen, accessed Mar 24, 2021
  22. 22.0 22.1 Lithuania to supply LNG to a 750 MW power plant in Poland - minister, Reuters, Jan 21, 2021
  23. PKN Orlen agrees to finance Ostroleka C unit on condition it is gas-fired, S&P Global, Jun 4, 2020
  24. Mateusz Bałuka, The coalition PiS monument collapses with a bang. One billion zlotys is not the end of expenses, Onet Wiadomości, Mar 12, 2021
  25. [“Polish civil society organizations call on pension funds to divest coal companies planning Ostroleka”], Elektrowniaostroleka.com – translated by Google, May 25, 2018.
  26. “Ostroleka C – the investment rationale”, Hetmanski and Piasecki, 2018.
  27. “Ostroleka C – Burning through more money than coal”, Carbon Tracker Initiative, August 29, 2018.
  28. “Climate victory: ClientEarth blocks Europe’s largest new coal power plant”, ClientEarth, 2019.
  29. “Multi-million penalties unavoidable. Supreme Audit Office report smashed Ostroleka C”, Elektrowniaostroleka.com, January 1, 2020.
  30. “Climate Victory: Companies put Poland’s last new coal plant on ice”, ClientEarth, 2020.

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