The latest report by Michał Hetmański from the Instrat Foundation "Ostrołęka C - next steps for the Europe's last coal power plant" indicates substantial unviability of the largest new coal power plant in the EU and serious legal doubts around the investment process.

The Instrat Foundation report is published 5 days before the Energa shareholders meeting (3 September), which will vote on the consent for the construction of the Ostrołęka C. Energa and Enea, Polish utilities and co-owners of the project, still have not presented the financing model for the power plant, its insurance is also in question. The results of the report prove to be devastating for a project worth at least PLN 6,5 billion:

  • The capacity market will not significantly improve the financial condition of the new coal-fired power plants. In the best scenario, Ostrołęka C can get only 15% of its revenues from the capacity market.
  • Even in the optimistic scenario of a very slow increase in the prices of CO2 emission allowances and a rapid rise in electricity prices - the power plant still turns out to be unviable.
  • Electricity from Ostrołęka C will be more expensive than electricity from RES. The power plant can generate electricity (LCOE) at a price of 488 PLN / MWh or even 505 PLN / MWh. This is much more than in the case of just recently developing polish wind farms (300), offshore farms (420) and even photovoltaic (440).
  • Analysis of investment profitability has shown that Ostrołęka C will never provide investors with return on the investment. Ostrołęka C requires "adding" PLN 2.3 billion throughout the life cycle of the power plant, i.e. an additional approx. 50% of the construction cost. The power plant does not generate positive NPV even even under extremely unrealistic assumptionof 100% exploitation in a year.
  • It is not unlikely that the special purpose vehicle will have to undergo environmental proceedings once again, which may significantly hamper and delay the whole investment process by several years. In turn, the investor categorically excludes the commencement of this process- all this to meet lower environmental standards that do not comply with EU emission limits (BAT conclusions for LCP).


We apply rather optimistic assumptions to our model – by assuming constant and fairly fast increase in electricity prices, additional capacity market revenues and a very smoothed growth of CO2 emission allowances price, we still reach the NPV (net present value) of PLN -2.3 bn. If we however take into account that CO2 prices have soared up to 20 EUR/t – this investment is about PLN 2.8 bn down the line - explains Michał Hetmański from the Instrat Foundation, author of the report. Before 2012, the project was rejected due to insufficient viability. This decision has been confirmed by the Supreme Audit Office, but Energa did its homework and chose another viability criteria to introduce some camouflage – these however are still not met in our model.

Issuing approval for the construction of the largest new coal-fired power plant in the EU is the worst gift that Energa can make to Poland on the occasion of the COP24 climate summit, which will take place in December in Katowice - notes Diana Maciąga from Workshop for All Beings.

The project was repeatedly criticized by the specialists as unreasonable and irrational. In July 2018 EuroRating agency lowered Energa's rating and recommended abandoning this project while it is still on early stage of development. Experts have estimated that the decision to abandon Ostrołęka C for the development of renewable energy would create an investment market of PLN 10-17 billion nationwide or PLN 670-870 million for the region and create 45% -1200% more jobs. According to the analysis of the impact of Ostrołęka C Power Plant on the health of its operation for 40 years can cause a total of up to 2 thousand premature deaths, and health costs estimated at EUR 340-680 million. At present, proceedings are pending before the Minister of the Environment regarding the invalidation of the integrated permit.

Financial analyst and report author:
Michał Hetmański, Instrat Foundation, michal.hetmanski@instrat.pl, +48 513 748 019 (PL, EN) | +49 157 5699 3045 (DE)
Lead campaigner:
Diana Maciąga, Association Workshop for All Beings,
diana@pracownia.org.pl, +48 502 646 890 (PL, EN)

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