ENERGO: Poland’s PKN Orlen picks GE Power to carry out coal to gas switch at Ostroleka power plant project

Warsaw-listed refiner PKN Orlen has picked the US company GE Power to build a gas-fired power plant in Ostroleka, the state-controlled company said on June 25.

The 745 MW Ostroleka power plant is a joint-venture of Orlen-owned Energa and two other state-controlled entities, the utility Enea and the oil and gas company PGNiG. The plant was supposed to be built as Poland’s last coal-fired power installation but that plan was abandoned in the wake of criticism by environmental activists as well as investors who questioned its economic viability in the face of rising carbon emissions costs.

The cost of the redesigned power plant is PLN2.5bn (€550mn), PKN Orlen said, adding that it was half the cost of the originally planned coal-fired project.

Burning gas for energy generates roughly half the emissions per kWh than in the case of coal – but still orders of magnitude more than renewables or nuclear power. Poland is expected to increase its reliance on gas, as it is retiring coal-fired power plants because of their emissions and obsolescence.

“This investment will significantly support Poland's energy transformation. In [our] strategy, we assume not only an increase in the capacity of renewable energy sources to over 2.5 GW, but also 2 GW of capacity in gas-fired power plants,” PKN Orlen’s CEO Daniel Obajtek said in a statement.

“[Ostroleka] will also be a significant step towards strengthening conventional energy in Poland with gradual replacement of coal units with low-emission sources,” Obajtek added.

While still planned as a coal-fired installation, the Ostroleka project was plagued with problems. Energa and Enea eventually suspended the project in early 2020. The state-owned utility companies spent an estimated PLN1bn on Ostroleka before it was halted. Demolition of the power plant’s elements began three months ago.

The parties in the project now say the new gas power plant will go online in 2025.