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The war continues to affect Azoty, which is negotiating a gas deal with Orlen
In the first quarter of 2023, the Azoty Group saw further demand-supply imbalances in the European market, caused, among other things, by Russia’s aggression against Ukraine, but recorded profits of PLN 3,895 million.
Polymers Police. Photo: Azoty Group
Azoty Group’s first-quarter results continue to be influenced by external factors with Russia’s invasion of Ukraine on top of the list. The first quarter of this year was characterized by high prices for energy carriers and duty-free imports of fertilizers and plastics from outside the European Union, produced with cheaper raw materials.
The situation in the macroeconomic environment resulted in limited demand for the Group’s products and associated lower sales volumes and falling product prices. The market turmoil also disrupted the purchasing patterns of end users, typical of the first quarter in previous years.
The first quarter of 2023 was a period of lower results for Azoty Group and negative margins in all key business segments, as a consequence of the accumulation of a number of negative phenomena. Among the most significant were the oversupply of products and the decline in competitiveness the entire chemical industry on the Old Continent is facing. To a large extent, this is the result of, among other things, the import of fertilizers and plastics from outside the EU, where manufacturers produce with cheaper raw materials and do not bear the costs of climate policy at the level that manufacturers within the European Union do.
The first quarter’s results were positively influenced by funding granted by the National Fund for Environmental Protection and Water Management to Azoty Group companies in the total amount of PLN 234 million as part of support for energy-intensive sectors related to sudden increases in natural gas and electricity prices in 2022.
It is worth noting that in the meantime, talks are still underway with Orlen about a new gas contract, as the old one will expire in September.
“We are currently in talks with PKN Orlen on a new gas supply contract, the current one is in force until the end of September. Despite the challenging market situation, the final works at Polimery Police are proceeding on schedule, thanks to which we assume that the investment will be launched in June this year, which will significantly strengthen our business. At the same time, we continue to further diversify our energy sources,” said Azoty Group Executive Vice President Marek Wadowski.
Azoty Group is the clear leader of the domestic fertilizer market and one of the key fertilizer and chemical industry groups in Europe. It holds the second position in the European Union in the production of nitrogenous and compound fertilizers, and has strong positions in markets for products such as melamine, polyamide, oxo alcohols, plasticizers and titanium white.
An important pillar of the Azoty Group’s strategy is investments, and the largest project is the Polimery Police that is being developed by the special purpose vehicle Grupa Azoty Polyolefins. This is one of the largest investments in the Polish and European chemical industry, which will enable the diversification of Azoty Group’s business activities, as well as positively influence Poland’s position in the plastics segment and strengthen the country’s energy and raw material independence.
Azoty Group / Jacek Perzyński
PGE CEO: Poland’s power industry is secure, there is no threat of blackout
“We have a diversified supply of electricity. We are safe because we have coal, we have Polish coal. Our energy system is secure, there is no threat of a blackout, Poland is safe and has the lowest energy prices for individual customers in Europe,” said PGE Group President Wojciech Dąbrowski.
“Coal will be our primary fuel for another 15, 20 years. The most important thing is energy security and reliance on fuels that are available in EU countries,” PGE President Wojciech Dąbrowski stated on Polish Radio Program 1.
According to the latest report, Poland’s energy transition will cost 600 billion zlotys by 2030, with PGE spending at least 75 billion, not including investments in nuclear power plants.
“As PGE, we are the largest investor in the Baltic, investing in offshore. We are implementing a project for 3.7 GW, that’s three quarters of the installed capacity of the power plant in Bełchatów, which in turn supplies almost 20% of the energy for the whole of Poland. This testifies to the great scale of investments that state-owned companies are making to make Poland safe in the future,” Wojciech Dąbrowski enumerated.
As he stressed, “currently about 70 percent of Polish energy comes from coal, but this is decreasing year by year.” “In the last few years, production from renewable energy sources has increased by 6 percent. This is due to power companies and individual customers and the development of photovoltaics – today we have 5 GW of installed capacity, this is a huge progress in RES development. We are a leader in Europe in terms of RES growth,” he stressed.
The PGE CEO pointed out that RES will also remain in the Polish energy mix in the future, as support for nuclear power plants. “Atom must be the baseload, because only stable sources can ensure energy security,” he stressed. And he pointed out that today coal was such a stable source.
Polish Radio / Jacek Perzyński
Small atom for Orlen and Synthos got a green light
The State Atomic Energy Agency has determined that the BWRX-300 reactor from GE Hitachi meets nuclear safety requirements. This decision means a green light for an SMR from the US for Orlen and Synthos.
The State Atomic Energy Agency (PAA) has concluded that the design assumptions of the BWRX-300 reactor from the U.S. GE Hitachi comply with nuclear safety requirements. “In a document received by ORLEN Synthos Green Energy (OSGE), the State Atomic Energy Agency confirmed the correctness of the BWRX-300 design assumptions adopted in accordance with nuclear safety requirements. The PAA’s opinion is an important element in the entire process of preparing the design of a complete power plant based on the BWRX-300 technology from GEH, which is already under construction in the United States,” the PAA announcement read.
“The general opinion obtained by OSGE for the BWRX-300 reactor is an important first step in the licensing work enabling GEH’s modular nuclear power plants to be built in Poland. It is worth noting that in connection with the technology agreement reached in Washington in March, a complete power plant design based on BWRX-300 technology is being developed in the US, including a nuclear island with the reactor. The project will take into account all regulatory requirements and technical standards required by Polish law. For us, good and open cooperation with the State Atomic Energy Agency is one of the key factors determining the success of our project, so we would like to thank the entire PAA team for their substantive and professional cooperation during the many months of work related to the issuance of the general opinion,” saidRafał Kasprów, president of OSGE.
The PAA inspected the reactor for, among other things, protection of the reactor from internal and external hazards, requirements for its control room, reactor core and electrical systems. “It also analyzed, among other things, monitoring and measurement apparatus and radiological protection solutions. In total, OSGE submitted documentation covering thirteen subject areas,” the agency reported.
The PAA president pointed out the technical assumptions of the BWRX-300 reactor technology were in line with national nuclear safety requirements, which stem from the Atomic Law and accompanying regulations.” These include the use of multiplexed safety systems in the reactor design, which will operate independently of each other, or the planned use of primary and secondary safety enclosures,” he explained.
The agency also said that it would be possible to evaluate some of the submitted documentation to meet detailed requirements after the investor provides data. Among the more than a dozen areas analyzed concerning BWRX-300 technology, the PAA chairman identified one technical assumption requiring reassessment. However, this does not apply to the design of the reactor itself, and in OSGE’s view, adjusting the documentation should not be a problem.
BWRX-300, under construction in Canada, is the reference project for the first SMR in Poland. In March, an agreement was announced in Washington, D.C., under which three companies, including Synthos Green Energy, an OSGE shareholder, provided financial support to GE Hitachi for technology development and design preparation of the BWRX-300 reactor power plant. Synthos assumes that the agreement signed with the Tennessee Valley Authority (TVA), OPG and GEH will enable the preparation of a design that takes into account European and Polish standards and norms, resulting in a faster start of SMR construction work.
Orlen Synthos Green Energy / Jedrzej Stachura
The contractor for the design of Poland’s first nuclear power plant will be announced on Thursday
“This Thursday, another American partner will join the project’s contractor,” said Minister Anna Moskwa. We are talking about the construction of the first nuclear power plant in Poland, which will be built in Pomerania.
It is worth recalling that for the first location for a nuclear power plant, the government chose Westinghouse technology (AP1000). According to the application for an environmental decision, three AP1000 reactors would be built at the location in Pomerania. According to the Polish Nuclear Power Program (PEJ), the first unit will start operating in 2033. The power plant will be built at the Lubiatowo-Kopalino location in Pomerania.
“We analyzed numerous projects where there were delays or some kind of implementation problem. In many of these places the problem was that the contractor joined too late, at the stage of construction, for example, which in the Polish case would be in 2026. It is important for the contractor to participate in the design process as early as possible, in order to avoid mistakes or possible claims later on,” said Minister Anna Moskwa.
The head of the Climate and Environment Ministry, responding to a question about the conflict between the U.S. and Korean sides over the nuclear power plant project, said that “there is a dispute between the two sides over the intellectual property of the technology, but Poland does not interfere in this conflict.” “We care about both projects,” she added.
“From our perspective, these are two important projects. The facility in Pomerania will consist of six reactors, and the one in Pątnów will consist of two. Any stable power in the electric power system is at a premium. The American side is putting pressure on the Korean side, but we are outside this dispute. We, as a government, have an agreement with the Americans, and private entities have an agreement with the Koreans, and they are continuing talks. Admittedly, there is a dispute between the two sides over the intellectual property of the technology, but we are not interfering in this conflict. We care about both projects,” the minister points out.
The Poles currently have designs for two nuclear power plants on the table. The first of three reactors from the U.S. Westinghouse is to stand in Pomerania in 2033. PGE, ZE PAK and KHNP, meanwhile, intend to build the first of two reactors in Pątnów in 2035.
ISBnews / Jacek Perzynski / Jedrzej Stachura
