August 9, 2017 / 10:27 AM / 2 years ago

UPDATE 1-Poland's Energa plans new coal-fuelled unit irrespective of power capacity scheme

(Adds details, background)

WARSAW, Aug 9 (Reuters) - Polish state-run utility Energa said it will go ahead with plans to build a coal-fuelled power unit at its Ostroleka power plant, irrespective of whether Poland introduces a power capacity scheme.

Poland plans to launch a so-called capacity market in which power producers are paid not only for generating electricity but also for keeping capacity available.

Parliament is now working on the capacity scheme law, which is designed to help state-run utilities finance the construction of more coal-fuelled power plants, at a time when some banks have turned away from financing coal and other projects that generate high levels of pollution.

“When it comes to Ostroleka, generally we are not waiting for the law to be introduced. This process will be conducted irrespectively of this,” Energa’s Chief Executive Officer Daniel Obajtek told a news conference on Wednesday.

The investment in building a 1,000-megawatt (MW) coal fuelled unit at Ostroleka, northeast Poland, is expected to total up to 6 billion zlotys ($1.7 billion) and will be co-financed by Enea, another state-run utility.

Energa will select a contractor in the first quarter of next year for construction of the unit, which is expected to be completed in mid-2023.

Energa’s Chief Financial Officer Jacek Koscielniak told reporters that the financing model for Ostroleka should be ready within a month. He also said that Energa and Enea may consider inviting one more partner to co-finance the project.

“The process continues. We are in touch with the energy ministry and we hope that the legislative process (regarding the capacity market) will have a positive conclusion for us,” Koscielniak said.

Energa’s representatives also said the company does not plan to participate in building Poland’s first nuclear power plant. The energy ministry is expected to take a final decision on whether to build the nuclear plant by the end of this year. ($1 = 3.6298 zlotys) (Reporting by Agnieszka Barteczko; Editing by Susan Fenton)

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