Energy 19 February, 2019 10:00 am   

PGE Heart to be moved from Bełchatów to the Baltic Sea?

94 percent – this is the current share of brown and hard coal in the electric energy generation structure in the Polish Energy Group, the largest energy generating company in Poland. However, these proportions will change over the next 10 years. Why? PGE is preparing foundations for a green turn. Out of 13 international entities, the company will choose a partner for development of offshore wind energy engineering. It is going to be a battle on the Polish Baltic where nothing is certain – claims Bartłomiej Sawicki, editor of

Opole and Turów to close the coal-based phase of PGE

According to 2017 data, PGE produces electric energy on the basis of brown coal in 77 percent, hard coal in 22.5 percent and natural gas, a renewable energy source, including biomass, wind and water energy engineering, in 3 percent. The installed capacity is 16.3, first and foremost in big energy engineering based on coal, such as the power stations of Bełchatów, Turów, Opole or Rybnik and combined heat and power stations.

In the years to come, coal-based energy is going to be more and more expensive due to growing prices of CO2 emission permits, coal prices, technological costs linked with adaptation to new environment protection and emission requirements. PGE, as the largest energy generating entity in Poland, still has to rely on coal. Turning towards Renewable Energy Sources (RES) and natural gas in 90 percent would be a financial suicide. It might be assumed that the last coal power station in the PGE Energy Generation Park will be power units 5 and 6 of the Opole power station, to be put into use this year. They have already won 15-year capacity market auctions for energy supplies; therefore, they have support secured at least to 2035. In turn, the last brown coal power station is to be the new power unit in the Turów power station, which has also won capacity market auctions. These are the last power units to be in operation for the next 20 years, approximately.

Possible avenues

PGE can choose one of three paths: coal, atom and wind. Hard coal extraction is to stop in central Poland after 2030. What remains unknown is whether or not it is true that this is where a second Polish nuclear power station will potentially be built as announced by the Ministry of Energy at the last press conference devoted to nuclear energy engineering. PGE can still choose the so-called “modern coal energy engineering” as one of its three strategic options. It seems, however, that it is least probable. As a result, it seems that the new Złoczew open pit will not operate for a long time. What remains unknown is what will happen with the nuclear power station considered by the company. Although the company responsible for the performance of the nuclear project, PGE EJ 1, belongs to the PGE Group, it remains unknown who and in what variant will build the power station. As there is a lot of uncertainty as to the climatic policy and coal and nuclear project financing, PGE is rather inclined to select the low-emission variant of its strategy, that is the construction of offshore wind farms supported by regulation sources. For wind, this is gas.

This is what figures show. Only the Bełchatów power station has the installed capacity of 5289 MW at its disposal. However, despite modernisations to adapt to the BAT and BREF emission standards over 10 years, further power units will be put out of use as it is not possible to adapt them to the new emission standards which are to take effect in the upcoming years. As a result, a dilemma will emerge as to where to seek energy. PGE is not yet open about this, but signs are that it will tackle the ageing of coal-based generation capacities with offshore wind farms. The first offshore wind farm of the company, with the capacity of over 1 GW, is to start supplying energy to the network as early as in 2026. PGE started to look for a strategic partner for preparation, erection and use of wind farms on the Baltic Sea.

According to the Polish Energy Group, thirteen largest global companies developing offshore wind energy engineering are willing to build wind farms in the Polish part of the Baltic Sea with the Polish Energy Group. These are for instance EDPR, Eneco, E.ON, Oersted, ScottishPower Renewables. The company is to choose the partner for implementation of offshore wind energy engineering projects by the end of 2019. Ultimately, PGE intends to sell 50% of shares in each of the two special purpose vehicles responsible for offshore wind farm projects to the selected strategic partner and then implement these projects as joint venture.

For the start, PGE intends to build offshore wind farms with the maximum installed capacity of 2545 MW. 1500 MW out of it will come from the area for which Elektrownia Wiatrowa Baltica-2 company has concession and the remaining 1045 MW – from the area of Elektrownia Wiatrowa Baltica-3 company. At the current project stage, the necessary environmental consents are being obtained, studies of windiness and power evacuation analyses are being conducted and other technical measures are being taken. Moreover, preparations are under way for preliminary geological surveys. PGE has already got a contract of network connection terms. For comparison, it is worth reminding that the PGE Capital Group is already boasting that it the largest “green” energy producer in Poland. It has 14 onshore wind farms, 29 water power stations, four pumped-storage hydroelectric power stations and one photovoltaic farm on the Żar mountain. The installed capacity of all these facilities combined is 2188.9 MW. The offshore wind farms alone can double the green energy generation capacities of PGE.

Competition for offshore

The Baltic Sea is a new area for expansion by companies dealing with the construction and operation of offshore wind farms. Thanks to its long coastline, Poland can be a natural beneficiary of this technology. What indicates the potential of this water body is increased activity of Scandinavian companies in Poland. These already include more than just the Norwegian Equinor, which has already concluded a partner contract with Polenergia. Danes have entered the game as well In a interview with, Anders Holst Nymark from the Danish Ørsted Anders Holst Nymark said that he has no doubts that this water body has a great potential for the offshore wind energy engineering. “It is the Baltic Sea that has economic potential that is three times as high as the today’s Polish energy consumption. There are many reasons for which Poland should invest in wind. We can see that the government is sending signals and wants to head for this direction” – said the Dane even in December, during COP 24.

As always, a political protective umbrella is necessary in the case of such investments. Such action has already been taken by Danes. For instance, Polish Minister of Energy Krzysztof Tchórzewski and Danish Minister of Energy Lars Christian Lileholt signed a memorandum of understanding in the field of energy, climate and energy engineering effectiveness. It might be presumed that it might also pertain to the cooperation in the sector of renewable energy sources.

Such endeavours were made by Scots as well. Several days ago, van McKee, Scottish Minister for Trade, Investment and Innovation, met with the Polish Minister of Energy, Krzysztof Tchórzewski. During the meeting, both ministers talked about the possibilities of bilateral cooperation in the RES sector. “This visit also gives me an opportunity to talk directly with prospective partners and allows the Scottish government and our institutions to better understand how the Polish market operates” – said McKee.

Such proceedings show that a game for participation in the development of offshore wind farms in Poland is on.

Offshore wind farms and the sun?

By 2040, the installed capacity of the offshore wind farms in Poland is to reach ca. 10 GW. As one of the pioneers of this technology in the country, PGE will be naturally predisposed to reach for further generation capacities in the Baltic Sea. This is accompanied by the plans to secure 20 GW entered in the energy engineering strategy by 2040 from photovoltaics, which GWs are to stabilise the peak demand for energy in summer. As the largest energy producer in Poland, PGE will be active in this field as well.

The company wants to build wind farms so that 25 percent of its RES-derived energy come from wind. It is 11 percent at present. “We would like to achieve this goal through an offshore programme and installation of wind farms in the Baltic Sea” – said Paweł Śliwa, vice-president for innovations at the Polish Energy Group, during the last year’s 4th Energy Congress in Wrocław.

Onshore wind is still needed

For these goals to be achieved, onshore wind farms are still needed. PGE started in auctions for new RES-derived capacities last year. As a result, three wind farms with the combined installed capacity of 97.17 MW will be erected in the West Pomeranian Voivodship. They will be built by PGE Energia Odnawialna, which is responsible for the renewable energy source development in the PGE Group. The project will allow to increase the combined installed capacity of PGE wind farms by 18 percent, to nearly 650 MW, and will strengthen the concern’s position of the largest “green” energy producer in Poland.

As part of an investment entitled “Klaster”, three wind farms will be built by mid-2020: Starza, Rybice and Karnice II, along with auxiliary infrastructure and power evacuation. The installations will be located in the northwest part of the West Pomeranian Voivodship, in the area of the Kamień Pomorski and Gryfice poviats, from 3 to 13 km away from the coastline of the Baltic Sea. In total, 33 wind turbines with 2 MW capacity and 10 wind turbines with 2.2 MW capacity will be build. This year, further RES auctions are to be conducted as well, which in the context of increasingly cheaper wind energy and growing emission permit prices is yet another opportunity for PGE to win and secure new investments.

Apart from RES, PGE heads for regulation sources, like gas, in Pomerania, in the neighbourhood of the offshore wind farms to be built. In 2017, the PGE Investment Committee issued a recommendation in terms of fuel and technologies for a new power unit in the Dolna Odra Power Station. The PGE Group intends to use gas there. According to preliminary results of the feasibility study, two gas units with the capacity of 500 MW each can be built. The estimated costs of constructing a gas unit with the capacity of ca. 500 MW, based on market prices of projects being currently implemented, oscillate within PLN 2-3 million for 1 MW. However, it is possible that the units will have capacity higher than originally planned. Maciej Szczepaniuk, PGE spokesman, published on Twitter that the gas units in Dolna Odra planned by the Polish Energy Group will have the combined capacity of 1400 MW. By June, the Group would like to invite contractors to tender.

However, one question is still left unanswered: how to reconcile investments in offshore wind farms, with costs estimated at ca. PLN 12-14 billion for 1 GW, with the implementation of the nuclear project in PGE. Until we learn about the model for nuclear power station financing, it will remain a secret closed off in offices at Mysia Street, where the registered office of PGE is located, and Krucza Street, the location of the offices of the Ministry of Energy.