On September 3, the Extraordinary General Meeting of Energa, despite the opposition of some shareholders, decided to issue a directional consent for the commencement of the work for the Ostrołęka C power plant. This is to the detriment of the company, shareholders and the society – environmental organizations comment.
At the Extraordinary General Meeting of Energa’s Shareholders, the expression of a directional consent (NTP) for joining the Construction Stage (consisting in the preparation, construction and operation of the Ostrołęka C coal power plant) was approved. The votes of the State Treasury and entities controlled by it have decided. Shareholders holding 23,5 million shares voted against and 4.6 million abstained from voting. At the Meeting, neither members of the Supervisory Board nor the Management Board of the company were present, disregarding the good investor relations practices. This made it impossible for shareholders to obtain answers to questions and concerns. Jakub Gogolewski, a minority shareholder, requested a break in the deliberations until 2 October, but his motion was rejected.
In the Eurobonds prospectus from February 2017, Energa AB stated that NTP would not be issued before the power auction, i.e. before December 21, 2018. Today's vote is breaking the obligations towards the bondholders. It is acting to the detriment of Energa and exposes it to long-term loss of value and trust among investors. All shareholders who will not sell off Energa shares will be responsible for building a huge coal-fired power plant, which Ostrołęka C is - says Jakub Gogolewski, a financial campaigner from the "DEVELOPMENT YES - OPEN-PIT MINES NO" Foundation, who participated in today's Meeting as an individual shareholder.
Wholesale energy prices in Poland have increased by over 40% compared to last year, further increase in bills in 2019 is inevitable. Small and medium-sized enterprises, which are the main driving force of the Polish economy, will suffer the most as they generate about 60% of Poland’s GDP. Meanwhile, experts warn that Ostrołęka C will produce a very expensive electricity.
- Until now, Energa was the company controlled by the State Treasury, in which the share of energy produced from coal was the smallest. It could have become the leader of the energy transformation in the sector but today’s voting rules out this opportunity - comments Diana Maciąga from the Workshop for All Beings. - The construction of a deeply unviable power plant means serious health and environmental impacts and a further increase in energy prices for both, enterprises and individual recipients. Eventually the price for the construction of unviable and unnecessary Ostrołęka C will be paid by the society. Coal-fired power stations belong to the past. Our priority should be to build an innovative, strong and secure Poland that is moving with the times and boldly responds to new challenges. Renewable energy, health- and climate-friendly technologies and energy efficiency are the solutions for a strong economy, clean environment, energy independence and the fight against catastrophic climate change. We cannot condemn Poland to dependence on coal and being behind in issues that will decide not only the position of our country in the world but, above all, the future of us and our children - summarizes the campaign coordinator.
Construction of Ostrołęka C was the electoral promise of the current Minister of Energy, Mr. Tchórzewski. This project is also on the list of 5 Law and Justice (PiS) election promises for Mazovia region in the local elections due on October 21st. The latest expert analysis has shown that Ostrołęka C is deeply unviable and will never provide investors with return on the investment. Ostrołęka C requires "adding" at least PLN 2.34 billion throughout its life cycle, i.e. an additional approx. 50% of the construction cost. The power plant does not generate positive NPV even under extremely unrealistic assumption of 100% exploitation in a year or a very slow increase of European Emission Allowances price. Power plant situation will not be improved by revenues from the capacity market, which were supposed to guarantee its profitability. Ostrołęka C can get only 15% of its revenues from the capacity market. It is also 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 for years. The power plant will emit approx. 6 million tons of CO2 annually. Pollutants from Ostrołęka C can cause up to 2,000 premature deaths and the health costs of its functioning have been estimated at EUR 690 million.
The consent for the issuance of NTP by Energa is not tantamount to the commencement of construction works. The same consent must be expressed by the Extraordinary Meeting of ENEA Shareholders, which is convened for September 24, 2018.