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Polska Grupa Energetyczna (PGE SA or PGE Group, the name can be translated as Polish Energy Group) is a state-owned power company and the largest power producing company in Poland. PGE is listed on the Warsaw Stock Exchange and is a constituent of the WIG20 index.[1] According to the campaign group Europe Beyond Coal, PGE is the third biggest CO2 polluter in the EU behind RWE and Energetický a Průmyslový Holding (EPH).[2] In June 2020 the company revealed that it will publish a ten-year 'green transition' strategy which will see it phasing out its coal power station fleet by 2040-45.[3]
History
The PGE Group has its origin in the establishment of Polskie Sieci Elektroenergetyczne S.A. in 1990. In 2007 the Transmission System Operator PSE-Operator was separated from the PSE. On 9 May 2007 Polska Grupa Energetyczna was established by the merger of PSE, PGE Energia SA and BOT Górnictwo i Energetyka S.A.[4]
Preparatory work on a new, potentially less carbon-intensive, strategy for PGE's operations is under way in 2020 under the newly appointed president of the company's board, Wojciech Dąbrowski. In a wide-ranging interview in April 2020, Dąbrowski outlined the company's ambitions to move "in the green direction" via offshore and onshore wind power generation in Poland, indicating that investment projects on the Baltic Sea are in an advanced state. The pace at which PGE may be able to decarbonise remains contentious. Stating that he is opposed to tighter EU-wide restrictions on emissions, Dabrowski said, "For various technical, social, and economic reasons, it is impossible to switch from coal-based power generation to renewable sources within 10 years."[5] In a series of reports since 2018, the Institute for Energy Economics and Financial Analysis has warned that PGE faces a collapse in its profitability unless it makes a rapid shift from coal to renewables.[6] PGE's financial report for 2019 shows debt on the company's books totalling 2.65 billion euros.[7]
Operations
The PGE Group operates two large lignite mines and more than 40 power stations. Power stations are fueled mainly by hard coal and lignite. The company consists of eight distribution system operator companies, eight electricity retail sales companies, an electricity wholesale company, and enterprises operating in other industries (including the telecommunications).[4]
Lignite coal plants:[8]
- Belchatow Power Station (5,298 MW)
- Turow Power Station (1,898.2 MW)
- Boruta CHP (36.3 MW)
Hard coal power plants:[9]
- Opole Power Station (1,492 MW)
- Dolna Odra (1,567 MW)
- Pomorzany (134 MW)
- Kielce (10.8 MW)
- Bydgoszcz I & II (231 MW)
- Gorzów (32 MW)
Proposed Coal-Fired Power Stations
- Gubin Power Project (shelved)
- Lublin Power Station (cancelled in 2012)
- Opele Power Station expansion (cancelled April 2013)
- Turow Power Station 2
Proposed Carbon Capture and Storage project
Proposed mines
In 2012 PGE Group said it might consider building lignite mines and power plants in the Lubuskie region, Western Poland, in a long term perspective, as the deposits of its current mine in Turow will likely be depleted within 30 years. PGE holds permits to explore lignite deposits in the region.[10]
Financing
On March 13, 2020, PGE announced that its conventional generation assets are now valued at PLN 7.5 billion (or EUR 1.7 billion) less than previous, a significant downgrade.[11] Analysis from the Institute for Energy Economics and Financial Analysis in February 2020 found that cash flows from PGE’s conventional assets would collapse in the 2020s, as a result of rising carbon costs, falling capacity payments from 2025, and high maintenance expenditures.[12]
Coal power phase out, 2040-45
In a June 2020 interview with S&P Global, senior executives of PGE laid out the company's intention to publish a 10-year strategy later in the year which will involve plans to phase out its coal-fired power station fleet by 2040-2045 as the company seeks to turn towards offshore and onshore wind, PV solar and gas for electricity generation. The plan will see PGE's existing coal units closing before 2040 and its new Opole power station and the still to be commissioned Turów power station closing by 2045. The executives admitted that the company was finally bowing to the inevitable and formulating a phase out plan as a result of rising carbon prices and higher EU emissions targets. PGE's new approach also includes a plan to spin off coal assets from all the country's state-controlled utilities to separate state-owned companies, one for mining and another for generation, a move which will allow PGE better access to financing from banks for renewable energy projects.[3]
Articles and Resources
Sources
- ↑ Pawel Kozlowski; Katarzyna Klimasinska (2009-02-25). "Poland Can’t Delay Asset Sales, Treasury’s Grad Says". Bloomberg. Retrieved on 2009-03-07.
- ↑ "Europe Beyond Coal: European Coal Plant Database," Jan. 2020.
- ↑ 3.0 3.1 "INTERVIEW: EU policies prompt Poland's PGE to pursue green transition," S&P Global, Jun. 2, 2020.
- ↑ 4.0 4.1 Tomasz Zadroga (2008-10-31). "Activities of the Polish Energy Group" (PDF). Baltic Rim Economies. Pan-European Institute. Retrieved 2009-03-07.
- ↑ PGE President: In the new strategy, we will definitely accelerate the green direction, EURACTIV, Apr. 2, 2020
- ↑ IEEFA report: Poland’s PGE must invest in renewables to replace declining coal profits, Institute for Energy Economics and Financial Analysis, Feb. 12, 2020
- ↑ [https://www.gkpge.pl/Investor-Relations/content/download/51567/plik/Mngmnt_Board_consolidated_report_PGE_CG_2019.pdf/ Management Board’s report on activities of PGE Polska Grupa Energetyczna S.A.and PGE Capital Group for year 2019], PGE, Mar. 31, 2020
- ↑ "Creating value and safe future PGE Group Strategy 2012-2035," PGE, Feb. 2012.
- ↑ "Creating value and safe future PGE Group Strategy 2012-2035," PGE, Feb. 2012.
- ↑ "PGE likely to turn to lignite business," The Warsaw Voice, Feb. 6, 2012.
- ↑ "Information about result of impairment tests," PGE, Mar. 13, 2020.
- ↑ "Poland’s PGE must invest in renewables to replace declining coal profits," IEEFA, Feb. 12, 2020.
Related GEM.wiki articles
Europe and coal
External Articles
Background information
- International Energy Agency, "Coal in Poland in 2005", International Energy Agency website, accessed July 2008.
- International Energy Agency, "Poland", International Energy Agency website, accessed July 2008.
- Walter G. Steblez, "The Mineral Industries of Central Europe: Czech Republic, Hungary, Poland, and Slovakia", 2005 Minerals Yearbook, U.S. Geological Survey, December 2007.
- U.S. Geological Survey, Poland 2000-2005
- European Environment Agency, European Pollutant Emission Register. (This has a list of power stations and their current emissions).
- Institute for Energy Economics and Financial Analysis, "How to Create a Profitable Polish Electricity System: PGE Can Set More Aggressive Renewables Goals, Develop Coal Phaseout Strategy", February 2020.
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