Polish utilities lobbying for state power purchasing guarantees

By bne IntelliNews February 22, 2016

Tauron "expects" the Polish government to introduce a power capacity support mechanism to help drive investment in new generation, the CEO of the state-controlled power utility told local media on February 22.

Remigiusz Nowakowski made his comment while Prime Minister Beata Szydlo toured Tauron’s current project. The company plans to launch 910MW at a new coal-fired plant in Jaworzno by 2019. Szydlo called the installation key for Poland’s energy security.

Warsaw is fighting to maintain the country's reliance on coal as it faces an increasingly urgent need to build new capacity to replace the ageing fleet. State bodies have warned that new capacity is not being developed fast enough.

Polish power companies are wary, however, of the huge investment demand, and the reaction of investors to the politically-led projects into which they are being herded. They have said the issue could be solved by state guarantees on power purchases.

"We need to have guaranteed the purchase of our capacity in the system," Nowakowski said in Jaworzno. "Nine hundred MW of capacity will be created here, but [at present] we do not have certainty that this block will be able to work a sufficient amount of hours [to make it economically viable]."

Szydlo did not respond to Nowakowski’s plea directly, but the government has clearly stated it will seek to support the country's coal mines - much to the chagrin of the EU. "[The Jaworzno plant] will burn Polish coal and that will make Poland safer," the PM claimed.

The government is still trying to find a way to rescue the ailing coal industry. The state-controlled utilities are still clearly unhappy that they are on the frontline of the scheme, which would see them asked to help support the inefficient mines.

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