Investments in 2020

One of the key capex projects in 2020 was the construction of a 450 MW CCGT unit at the Żerań CHP plant (Żerań CCGT). In the reporting period, mechanical assemblies were carried out for the main technological equipment (gas and steam turbine sets, recovery boiler), parts of technological pipelines, internal installations and external networks, and secondary steel structures.

In March 2020, the consortium consisting of: Mitsubishi Hitachi Power Systems Europe GmbH, Mitsubishi Hitachi Power Systems Ltd., Mitsubishi Hitachi Power Systems Europe Ltd. and Polimex-Mostostal S.A. declared force majeure related to the increase in the number of COVID-19 infections. In early October 2020, the contractor formally demanded that the contract price be increased and the completion date be extended citing changes in the law effective as at September 30th 2020, enacted to counter effects COVID-19. Subsequently, in December 2020, the contractor updated its claim and presented a new contract schedule, with the commissioning deadline set as September 30th 2021.

In 2020, some of the tasks associated with the CCGT Żerań construction were also completed, including modernisation of the cooling water system, construction of the cooling water discharge pipeline from the unit, and modernisation of the water preparation station.

The planned capital expenditure totals approximately PLN 1.6bn.

Another project continued in 2020 was the construction of a 450 MW CCGT unit at the Stalowa Wola CHP plant. In 2020, work continued to complete the construction of the CCGT unit and a back-up heat source at ECSW.

The gas turbine was synchronised with the power grid on March 4th 2020, and the steam turbine was synchronised on August 21st 2020. The CCGT unit was commissioned on September 30th 2020. Optimisation works and unit operation tests agreed with Polskie Sieci Elektroenergetyczne S.A. continued until the end of 2020.

On November 5th 2020, the company obtained a licence for electricity generation, followed by a licence for heat generation on December 16th 2020. The application process for electricity trading licence is pending, with the granting of the licence by the URE expected in 2021

On December 22nd 2020, PGNiG, Energa S.A. and Polski Koncern Naftowy ORLEN S.A. signed an investment agreement for cooperation in the construction of a gas-fired generation unit at Ostrołęka CCGT. The purpose of the agreement is to set out the terms of cooperation between the parties, in particular within the framework of the special purpose vehicle established to construct of a gas-fired generation unit Ostrołęka CCGT. PGNiG will take a 49% interest in the SPV’s target share capital, with the remaining shares to be acquired by PKN ORLEN S.A. and Energa S.A. which will participate in the financing of the project pro rata to their equity interest. On February 24th 2021, the parties to the agreement submitted an application to the UOKiK for approval of formation of the joint venture.

On December 22nd 2020, PGNiG, Energa S.A. and Polski Koncern Naftowy ORLEN S.A. signed an investment agreement for cooperation in the construction of a gas-fired generation unit at Ostrołęka CCGT. The purpose of the agreement is to set out the terms of cooperation between the parties, in particular within the framework of the special purpose vehicle established to construct of a gas-fired generation unit Ostrołęka CCGT. PGNiG will take a 49% interest in the SPV’s target share capital, with the remaining shares to be acquired by PKN ORLEN S.A. and Energa S.A. which will participate in the financing of the project pro rata to their equity interest. On February 24th 2021, the parties to the agreement submitted an application to the UOKiK for approval of formation of the joint venture.

As part of the development of its own RES sources, the company is continuing the project for the construction of a photovoltaic installation at C Kawęczyn and the search for a partner to develop a feasibility study for the construction of an innovative floating photovoltaic farm on the Moszna reservoir has begun.

The most important investments carried out at PGNiG TERMIKA EP in 2020 included:

• project related to the supply of heat from own generation sources to the town of Rybnik;
• expansion and upgrade of district heating networks in Jastrzębie-Zdrój, co-financed with assistance funds;
• construction of engine power generators fired with gas captured from demethanation processes at hydrocarbon extraction facilities at the Zofiówka Branch;
• adaptation of the WP-70 boiler at the Zofiówka Branch to the requirements of the BAT Conclusion, under which a temporary derogation was granted until the end of 2023;
• adaptation of the CFB-275 boiler at the Zofiówka Branch to the hydrochloride (HCl) emission requirements.