Demandbase Connect

March 1, 2009

Polish Plant Beats the Odds to Become Model EU Generator

Pages: 1234

Currently, Poland is trying to reconcile its recent hard-won freedom and cultural openness with its centuries-long history of oppression at the hands of a number of conquest-driven marauders. From the time of the Crusades through the Teutonic Knights, Tartars, Cossacks, and Turks; through three partitions; and through the most recent occupations during two world wars, Polish citizens have dealt with many challenging times, particularly during the 20th century.

Starting in 1981, the beginnings of the "Solidarity" trade union contributed to the fall of communism. Finally, in 1989, free, democratic elections marked the end of the communist regime imposed on Poland by the Soviet Union.

A "shock therapy" program during the early 1990s enabled the country to transform its economy into one of the most robust in Central Europe, according to the U.S. Central Intelligence Agency’s World Factbook. However, despite recent changes resulting from EU development programs, Poland still faces the lingering challenges of high unemployment, underdeveloped infrastructure, and a poor rural underclass.

Poland joined NATO in 1999 and the European Union in 2004. With its transformation to a democratic, market-oriented country largely completed, Poland is an increasingly active member of Euro-Atlantic organizations.

The Polish Power Industry

Given Poland’s history as a communist country from the 1940s through the late 1980s, it’s not surprising that the Polish government managed power generation assets and the distribution of electricity for many years.

In an interview with POWER in January, Gene Larson, vice-president of business development with SNC-Lavalin Constructors Inc., described how the electric utility industry in Poland has evolved in recent years. He served as the director in his company’s Warsaw, Poland, office during the effort to restart construction of the Patnów II Power Plant in north-central Poland.

"In preparation for accession into the [European Union] EU, Poland was required to liberalize its electricity sector, including creating policies for opening the power markets and privatizing the large state-owned electrical generation companies," Larson said. "Most of the existing generation assets were completed prior to 1970 and are based mostly on Soviet-designed power plants, both inefficient and highly polluting, supplemented by British-designed mid-sized steam turbine technology."

Larson pointed out that the Patnów II plant was the first of a series of planned projects to demonstrate leading-edge technology for coal-fired power plants, which still generate over 94% of the power in Poland. Patnów II is the largest new project recently completed and is both highly efficient and less polluting than any other project currently operating in the Polish market: It meets emissions requirements of both the EU and the Kyoto Protocol (Figure 1).

1.    Polish pride. The Patnów II Power Plant represents a new era in electricity generation for Poland. The plant will sell a portion of its power to the Polish grid company, PSE. Courtesy: SNC-Lavalin Constructors Inc.

According to Larson, other new high-efficiency and clean-burning plants are currently under design or construction by Poludniowy Koncern Energetyczny (PKE) at Lagisza (a 460-MW circulating fluidized bed plant) and PGE Elektrownia Belchatow (an 858-MW circulating fluidized bed design). Neither would have been easily funded had SNC-Lavalin not found a way to reenergize the lenders involved with the Patnów II project.

"Following a turbulent path towards deregulation and privatization during the 1990s and early 21st century, today there are four integrated Polish utilities: ENEA S.A., Polska Grupa Energetyczna S.A. (PGE & PSE), Tauron Energia S.A., and Energa S.A.," Larson said.

At present, a number of Polish government entities are involved with the electric power industry. The main government agency in Poland that deals with the electric generation industry is the Ministry of Economy, and the Urzad Regulacji Energetyki (the Energy Regulatory Office) regulates the power sector. The country’s national grid company is Polskie Sieci Elektroenergetyczne (PSE) Operator S.A.

Pages: 1234

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