Warsaw — The Zloty 6.023 billion (Eur1.4 billion) 1 GW Ostroleka C project, which energy ministry officials have said will be Poland's last large coal plant, was awarded 15 years of subsidies in a capacity auction, co-owner Energa said Friday.
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Energa said the company set up to build Ostroleka C, Elektrownia Ostroleka, was awarded a 15-year contract to deliver 853 MW of capacity in 2023.
The company's co-owners, Energa and Enea, had said a notice to proceed for the investment would only be given if the project won capacity subsidies.
The December 21 auction cleared in round 8 between Zloty 189.95/kW/year (Eur44.35/kW/year) and Zloty 217.06/kW/year, the country's transmission system operator PSE said.
In Poland's first capacity auction last month, PSE awarded subsidies for 22,427 MW of mostly hard coal and lignite-fired capacity, including two hard coal-fired 900 MW units at Opole, a 910 MW hard coal-fired unit at Jaworzno and a lignite-fired 490 MW unit at Turow that are under construction.
A 1,075 MW hard coal-fired unit at Kozienice, commissioned a year ago, was also awarded a 15-year contract in the auction.
In July, Elektrownia Ostroleka signed a contract with GE Power and Alstom Power to build the unit on the site of the 647 MW Ostroleka B plant in northeastern Poland owned by Energa.
Ostroleka C would have a net efficiency of at least 45%. Energy ministry officials have said the unit is indispensable for power supply security and needed to synchronize the Polish power grid with those of the Baltic states.
Earlier this month, environmental legal group ClientEarth, which is already taking legal action against Enea over Ostroleka C, said the project poses unjustifiable financial risks to Energa and Enea's shareholders.
ClientEarth said the tripling of carbon prices between May 2016 and November 2018 and declining renewable energy costs made the investment uneconomical.
ClientEarth said there was a risk that Ostroleka C would not be built in time to provide capacity in 2023, which would result in financial penalties.
-- Adam Easton, firstname.lastname@example.org
-- Edited by Jonathan Fox, email@example.com