LESS STEAM AND BROWN COAL, MORE DELUSSIONS

Polska Grupa Energetyczna announced this week their new strategy for next two decades. The most important part of the plan is new fuel mix. PGE, which power plants are today producing energy in 94% from coal is planning to reduce coal usage to less than 40% in next twenty years.

PGE with its mine in Bełchatów and the largest fossil-fuel based power plant in Europe, is today producing 67% energy from brown coal, with second place taken by steam coal (27%). The strategy assumes that until 2035 only 5% of energy will be produced from steam coal, and that the part of energy production from brown coal would have to be improved with CCS technology (coal capture and storage). In the end 17% of energy would be produced from brown coal with CCS, leaving 16% of power production from traditional brown coal energy blocks.

PGE claims that they are forced for this fuel mix revision, since EU laws are still constantly putting pressure on reducing CO2 emissions and therefore – decreasing coal usage. In the first half of 2015 emission fees became more expensive by 10%.

Also, last week there were published some reports, saying that brown coal in Bełchatów mine will last for no longer than 15-20 years. Also, falling international prices and internal Polish price war on steam coal led to the situation, when brown coal lost its main advantage on other fossils.

On the other hand, if you look closely how exactly PGE is planning to fulfill the coal gap in their new fuel mix, you will see that the plan is nothing more than a PwC and K&L Gates with their heads in the clouds (both companies are advising PGE). Starting with CCS, which was already planned three years ago to be installed in Bełchatów power plant, but quickly dropped due to the large cost of the project. With today’s prices of gas also increasing its share in the fuel mix from 4 to 11% seems unrealistic. But the most unreal figure is 36% share of nuclear energy. In 20 years. From 0…

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