Polish utilities may consider German-style reorganization: minister

WARSAW (Reuters) - Polish utilities, which generate power mostly from coal, may consider a reorganization similar to the one undertaken by their German peers, which have swapped assets to phase out coal and focus on green energy, the climate minister said.

FILE PHOTO: COP 24 President Michal Kurtyka addresses during the opening of COP24 UN Climate Change Conference 2018 in Katowice, Poland December 3, 2018. REUTERS/Kacper Pempel

Coal use has hit the financial results of Polish state-run energy groups - PGE, Tauron, Enea and Energa and a government official said last month that a new model for the industry was needed.

Banks have shied away from backing coal-dependant companies and Michal Kurtyka said capital providers differentiate between companies with and without mining assets.

“This difference is currently significant and in this context, to free their investment potential, the (energy) groups are thinking how they could carry out some optimization,” Kurtyka told Reuters.

“Such optimization happened in Germany and I understand that it would also be a subject of some reflection in Poland,” he also said, referring to a series of complicated asset swaps between Germany’s energy giants RWE and EON, which both split their businesses to separate legacy fossil fuel plants from more regulated networks and renewable assets as well as retail activities, trading and services.

Kurtyka, who is considered as the green face of Poland’s coal-friendly government, said Poland had to reduce carbon emissions as this was what investors expected.

He added Poland planned to double its current installed power capacity with zero-emission sources, including offshore wind, solar and nuclear power. Poland plans to build its first nuclear power station within the next 20 years and Kurtyka said that it is in most advanced talks with the United States over the project.

The minister declined to say when Poland, which now generates almost 80% of power from coal, would be able to completely give up the fossil fuel.

Kurtyka signaled however, that, depending on available technology, Poland may reduce coal use faster than it assumed in its latest version of energy strategy by 2040, which said the share of coal in power generation will fall to 56%-60% in 2030.

The climate ministry is reviewing the document and plans to modify it within weeks so that it better reflects the growing role of renewable sources of energy, Kuryka said.

Asked whether the ministry could change the document’s assumptions regarding the share of coal in Poland’s future energy mix, and regarding a controversial lignite coal project Zloczew, Kurtyka said: “We are working on all these components and absolutely these changes cannot be ruled out.”

Reporting by Agnieszka Barteczko; editing by David Evans