Alstom eyes role in Poland's biggest power project

WARSAW, Sept 12 Thu Sep 12, 2013 1:25am EDT

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WARSAW, Sept 12 (Reuters) - Government support and planned regulatory changes that will boost Poland's power market have prompted France's Alstom to seek a major role in constructing two new 900 megawatt coal-fired plants, a company official said.

State-controlled PGE had quit the 11.6 billion zloty ($3.66 billion) project to build the coal-fired units at Opole earlier this year, arguing it was not profitable at current power prices.

But the government said in June the plan was vital to Poland's energy security and insisted on reviving it.

Leslaw Kuzaj, Alstom's top official in Poland, told Reuters the current situation in Poland's power market, which has forced utilities to cancel some of their investments, was temporary.

Utilities across Europe have scrapped plans to build new power plants due to low wholesale power prices due to low demand during the financial crisis.

But Kuzaj said the government's promised support for power plant projects to boost energy security and the regulator's plans to introduce a so-called capacity market makes the situation in Poland more promising.

A capacity market, which Poland will likely launch in 2014, ensures future supply by paying generators for their capacities and not for the electricity they produce.

"I am convinced that in the nearest future the government will solve the problem, introducing a capacity market and regulations, which will create opportunities for investment," he said in an interview in his office.

In August Alstom signed a preliminary agreement with Polish construction groups, which are set to build the new units in Opole on a possible cooperation on the project.

Details of Alstom's cooperation in the project are expected to be worked out by the end of September.

The French company also hopes to finish talks soon on a new deal to build a power plant in the north of Poland for Kulczyk Investments, a company owned by one Poland's richest men, Jan Kulczyk, a project valued at 12-15 billion zlotys.

Kuzaj said his company will again submit an offer to build a 430 to 450 MW unit at the Turow site. Alstom won the tender last time but it was cancelled due to the projected cost.

"Energy was, is, and will be the area we want to focus on in Poland," Kuzaj said. ($1=3.1698 Polish zlotys) (Reporting by Agnieszka Barteczko,; Editing by Michael Kahn and Greg Mahlich)

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