The decision concerning reactivation of the project of Ostrołęka C power plant was assessed negatively by experts within the power industry. Below we discuss two reports analysing financial and regulatory environment of this investment. They show clearly that the project of building the C bloc of 1,000 MW of capacity is not profitable or reasonable in the context of the electric power system in Poland.
The risk analysis related to the Ostrołęka C Power Plant development
Jan Popczyk, Krzysztof Bodzek, Silesian University of Technology
- The planned investment in Ostrołęka C power plant hampers or even blocks potential investment in renewable sources of energy and related services in Ostrołęka region.
- Alternative investments in distributed renewable sources would contribute to new employment more than 45% higher than in the case of the total employment at operating the new bloc and coal mining for its purposes. If the coal is imported - employment related to renewable energy generation would be 1,200% higher.
- Prices of power generated at Ostrołęka C power plant will be higher than prices of power from renewable sources. With the time passing, this proportion will change to the advantage of renewable sources with development of this sector (falling prices) and rising costs of CO2 emissions allowances (allowance cost).
Ostrołęka C – the investment rationale, and why is the project not rational at all
Michał Hetmański and Filip Piasecki, Instart Foundation
- The actual costs of construction of Ostrołęka C are significantly underestimated and the history of construction of other blocs of 800+ MW of capacity shows that this is a high-risk investment. It is the strong integration of the power sector in Poland that is the reason of the unreal estimation and presumptions within the businessplan.
- The power market for Ostrołęka C is not a certain source of funding. British experience shows that power mechanisms are the most profitable for existing units which support new and large investments. On one hand, this is a potential source of revenues, but also a threat - considering contractual penalties.
- The analyses have shown that the difference between actual and estimated costs of exhaust fumes treatment installation exceeds half a billion PLN. Because of the investor's administrative negligence, the integrated permit for the investment expired and the whole process must be repeated, considering the strict BAT guidelines. This increases the investment costs, which are very high anyway. It may also delay the launch of the bloc.