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Poland’s PKN Orlen says newly acquired Ostroleka coal plant should switch to gas

Poland’s state-controlled refiner PKN Orlen will get involved in the Ostroleka power plant project it acquired via the purchase of utility Energa “only if it switches to gas,” the company said on May 19.

The Ostroleka power plant project has been a joint-venture of now Orlen-owned Energa and another state-controlled utility, Enea. The plant was supposed to be Poland’s last coal-fired power installation but financiers’ growing reluctance to invest in coal, driven by the EU’s climate policy aiming at curbing carbon dioxide emissions, has all but halted its development.

PKN Orlen now claims that switching the plant from coal to gas could give it a second life.

“We see a great potential for building new energy sources in Poland, which will strengthen the energy security of the country and the region. However, we cannot [disregard] market trends and the EU’s regulatory policy,” PKN Orlen’s CEO Daniel Obajtek said in a statement.

“The investment in Ostroleka will be implemented, but it must be based on gas technology. This is in line with our strategy, including the development of low and zero carbon sources,” Obajtek added.

Switching Ostroleka to gas would require a major redesign of the project, leading to a delay in the plant’s completion, originally scheduled for 2023. Burning gas for energy generates roughly half the emissions per kilowatt hour than in the case of coal. That said, it is still tens of times more emissions in comparison to nuclear power or renewables.

Poland gets nearly three-quarters of its electricity from burning emissions-intensive hard coal and lignite, making the Polish power sector one of the most climate-unfriendly in Europe.

The Law and Justice (PiS) government has plans to develop offshore wind power by the late 2020s and the country’s first nuclear reactor by the early 2030s. In the meantime, it also needs secure electricity supplies and some of the country’s coal-fired power plants are ageing and facing shutdowns.

Other than being an issue in the context of climate policy, Poland’s use of coal is a domestic political problem, as some utilities prefer to import the commodity from Russia, where it is cheaper. That has angered the powerful mining unions, which are threatening protests and strikes at a difficult time for PiS, shortly before the pivotal presidential election.