Polish state-owned utility Energa said late Wednesday it has chosen a consortium of GE Power and Alstom to build a 1 GW unit at its Ostroleka plant, which, government officials have said, will be Poland's last new conventional coal investment as the country adjusts to EU climate-change policy.
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In a market filing, Energa said the consortium had offered to build the supercritical Ostroleka C unit, which will have net efficiency of at least 45%, for gross Zloty 6.023 billion ($1.76 billion). Energa said the deal still required the approval of its supervisory board.
GE and Alstom's offer was well above the gross Zloty 4.803 billion budget set by Energa and Enea, another state-controlled utility, which has taken a 50% stake in the joint venture project to help Energa with the costs. However, Energa said that price was not the sole criterion in selecting the tender's winner.
Only China Power Engineering's offer came close to budget at Zloty 4.849 billion, while Polish state-controlled constructors Polimex-Mostostal and Rafako, who originally were considered the tender's favorites, bid Zloty 9.591 billion. By comparison, Enea's recently commissioned, 1-GW hard coal-fired unit at Kozienice cost Zloty 6.4 billion.
All of the bids at a leveled cost of energy translated to an average generation price of Zloty 285-395/MWh, well above the current average 2019 forward market price of Zloty 196/MWh.
Last month, energy minister Krzysztof Tchorzewski said he hoped construction of Ostroleka C would start before the end of the summer holidays.
The 647-MW Ostroleka B plant, which was commissioned in 1972, is the only conventional system plant in north eastern Poland and Ostroleka C has strong political support from local politicians from the governing Law and Justice party who want to support the country's large coal mining industry.
Ministry and company officials have said they plan to enter the project in capacity market auctions in November or December in the hope of securing capacity payments from 2023. As a new or planned project, Ostroleka C is eligible for a 15-year capacity contract. In February, the European Commission approved Poland's capacity market law.