Implementation of the new strategy

Our 2030 strategy with outlook to 2050 was adopted in October 2020, however since then we have been able to take the first steps toward low-carbon generation and eventually toward reaching climate neutrality in 2050.

Development of offshore wind farms

Objective in the strategy:

2.5 GW
in 2030
>6.5 GW
in 2050

Activities / status 2020 and 2021:

In February 2021, PGE Polska Grupa Energetyczna and Ørsted signed an agreement to form a 50/50 joint venture with the aim of developing, building and operating two offshore wind projects in the Baltic Sea, with a total capacity of up to 2.5 GW.

In May 2021, the agreement was finalised, and the partners currently hold a 50% stake each in the Baltica 2 and Baltica 3 projects, which together make up the Baltica wind farm – the largest offshore investment in the Polish part of the Baltic Sea.

Baltica 2 and Baltica 3 will make a considerable contribution to Poland’s green energy transition, accelerate the development of local supply chains and stimulate economic activity for many years to come. The two stages already have environmental permits and have signed grid connection agreements. On April 7, 2021, they received contracts for difference from the Energy Regulatory Office. Subject to the final investment decisions of Ørsted and PGE Group, Baltica 3 (1 GW) may be launched in 2026 and Baltica 2 (1.5) before 2030.

The project’s next stage – Baltica 1, with a capacity of 0.9 GW, is expected to be delivered after 2030.

In August 2021 PGE Polska Grupa Energetyczna selected a financial adviser for development of the Baltica 2 and 3 farms, which together make up the Baltica wind farm – the largest offshore investment in the Polish part of the Baltic Sea. Société Générale will advise PGE on raising financing for its offshore wind farms in the Baltic Sea.

Why #GrupaPGE focuses on the development of offshore wind energy?

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Development of onshore wind farms

Objective in the strategy:

>1 GW
in new capacities by 2030

Activities / status 2020 and 2021:

Having put wind farms Starza, Rybice and Karnice II into operation and having acquired the Skoczykłody wind farm, PGE Group solidified its position as the national leader in this sector. Its strategy includes a plan for further development – 1 GW of new capacities by 2030.

To this end, subsidiary PGE Energia Odnawialna is undertaking the following activities:

  • preparations for a wind farm project in the Bełchatów region (capacity close to 100 MW)
  • preparations for a wind farm project in the Turoszów region (capacity 150 MW)

The 10H rule (stating that a wind farm cannot be located closer than 10x turbine height – with raised blades – from residential housing, environmental protection areas and forests) should accelerate investment projects. In accordance with the 10H rule, this distance may be even up to 2 km.

The Ministry of Development, Labour and Technology is working on a draft update of the distance law, which has been sent for negotiations and consultations. Its key intention is to maintain the basic rule for selecting a location for a new wind farm, according to which rule the wind farm can be located in a given place only on the basis of a local spatial development plan.

Once consultations and parliamentary committee works are completed, the draft of the more liberalised 10H act should be sent to the parliament in September or October. As stated by the Ministry of Development, Labour and Technology, the law will enter into force toward the end of November 2021.

The Group’s strategy also includes acquisitions of operational wind farms, projects at the construction permit stage or the repowering of existing assets.

The power of the Baltic wind in your home

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Development of photovoltaics

Objective in the strategy:

>3 GW
in new capacities by 2030

Activities / status 2020 and 2021:

We have begun large-scale operations based on organic growth using the Group’s competences, supported by project acquisitions.

Short-term plans include:

PGE has so far secured more than 2500 ha of land for PV farms with a total capacity of approx. 2 GW. An information campaign addressed to land owners interested in cooperating on the PV program is still on-going. Aside from TV ads a special information line has been set up.

Development of energy storage systems

Objective in the strategy:

800 MW
by 2030

Activities / status 2020 and 2021:

Energy storage systems are the future of zero-carbon energy and the bedrock of the green transition that is awaiting the Polish energy sector. Their principal task will be to balance the power system during volatile generating conditions. This results from the growing share of renewable sources in the national power system. With energy storage systems and pumped-storage power stations, which also store electricity, it will be possible to balance demand for electricity with the energy produced by wind and PV farms, the output of which is weather-dependent. This is how PGE Group plans to ensure the energy security of its customers in the zero-carbon energy sector of the future.

The most important projects include energy storage systems with a capacity of up to 300 MW planned to be built in the Bełchatów region.

In December 2020 PGE launched in Rzepedź in the Podkarpacie region Poland’s first energy storage system, using Tesla’s Powerpack modules.

In July 2021 PGE Energia Odnawialna launched another energy storage installation, with a rating of 500 kW and storage capacity of 750 kWh, on the Żar mountain in the Silesian Voivodship. The installation was built next to the company’s PV farm. The investment was completed as part of a research and development project and will be used for research on the use of energy storage within PGE Group’s business.

We plan to build an energy storage system in Żarnowiec with a rating of 205 MW and capacity of 820 MWh. This will be one of the largest units of its type in the world and will work with our pumped-storage plant in Żarnowiec. The ESS is expected to launch in 2025. The project participated in general certification for the capacity market and was entered in the capacity market register, which will allow it to take part in capacity auctions. The energy storage system is expected to be put into service in 2025, on the condition that financial close is reached at the turn of 2021 and 2022.

Energy storage facility in Rzepedź

Energy storage facility in Żarnowiec

Polska Grupa Energetyczna (PGE) plans to build a 200 MW energy storage installation in Żarnowiec. The overall cost of the investment is approx. PLN 900 million.

Wojciech Dąbrowski

We are currently designing this large energy storage system in Żarnowiec, with a capacity of 200 MW. We have applied for funding from the Innovation Fund. We expect to receive approx. PLN 600 million, and the entire investment to be worth approx. PLN 900 million.

Energy storage in Podkarpacie Photo: Polska Grupa Energetyczna

Development of district heating

Objective in the strategy:

70% share of zero- and low-emission sources in heat production by 2030

Activities / status 2020 and 2021:

One of the pillars of the new strategy is the district heating sector transition and its increased role following the carve out of coal assets from PGE Group.

The first effects of these activities are already visible:

  • in 2021 KOGENERACJA signed an agreement to build a gas-and-steam CHP in Siechnice (Nowa EC Czechnica). The new CHP in Czechnica will have a thermal capacity of 315 MWt and electric capacity of 179 MWe and will replace coal-fired units. The unit is planned to be put into service at the beginning of 2024.
  • in August 2021 PGE EC signed an agreement with SBB ENERGY, which will make it possible to build a new gas boiler room at the CHP in Kielce. Thanks to this, it will be possible to remove the existing coal-fired boilers, which will reduce CO2 emissions.
  • at the CHP in Rzeszów, PGE Energia Ciepła began work on two large investments that are expected to finish in 2023. The first one concerns the construction of the second technological line for its waste-to-energy incinerator, while the second investment consists of the construction of a gas-fired boiler station.

The following locations are currently working on preparing similar projects using gas fuel: EC Gdynia, EC Gdańsk, EC Kraków and EC Rzeszów.

According to the strategy, investment decisions for natural gas in district heating will be made by 2025 at the latest; later, the commercialisation of zero-emission fuels (e.g. green hydrogen) or electrification of district heating will be essential

Ownership changes in the sector

Objective in the strategy:

Activities / status 2020 and 2021:

Our strategy assumed the carve out of PGE Group’s coal portfolio, which will facilitate easier access to external financing for energy transition and will free up the entire Group’s investment potential, focused on low- and zero-carbon energy.

This concept enjoys the support of the government, and the Ministry of State Assets has drafted a document entitled „Energy sector transition in Poland. Carve out of coal-based generation assets from companies with a State Treasury shareholding.” A concept is presented there for the carve out of coal assets related to electricity generation in conventional coal-fired units from energy groups and their integration in one entity, i.e. PGE Górnictwo i Energetyka Konwencjonalna S.A. – a PGE subsidiary, which will be re-named as Narodowa Agencja Bezpieczeństwa Energetycznego (National Energy Security Agency – NABE).

On July 23, 2021 PGE, ENEA S.A., TAURON Polska Energia S.A., Energa S.A. and the State Treasury reached an agreement regarding cooperation on the carve out of coal assets and their integration in NABE – this is the first stage in this exceptionally complex process, which is to be completed in 2022.

Activities / status 2020 and 2021:

Our strategy includes changes in the ownership structure of certain entities, including the sale of PGE EJ 1, which is responsible for preparing the project to build Poland’s first nuclear power plant.

The transaction was completed in March 2021, and PGE along with the other shareholders sold their stakes in PGE EJ 1 to the State Treasury.

The sale agreement was signed by all entities holding a stake in PGE EJ 1. PGE had held a 70% stake in PGE EJ 1, while Enea, KGHM Polska Miedź and TAURON Polska Energia held a 10% stake each. The price for the entire stake in PGE EJ 1 was PLN 531.36 million, of which PGE received PLN 371.95 million.

It should be noted that only in the first stage of the Bełchatów region transition PGE Group plans to spend nearly PLN 5 billion on investments, and for the Bogatynia region, which is where the Turów complex is situated, approx. PLN 2.5 billion.

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