Decarbonization of operations

In parallel, PGE is preparing to build a third project, Baltica 1. This offshore wind farm is scheduled to come online after 2030 and will have a capacity of approximately 0.9 GW. PGE Baltica, the company responsible for the PGE Group’s Offshore Programme, continued environmental studies and carried out geophysical surveys for the project in 2023. A full year of wind intensity measurements was completed in July 2023. Baltica 1 already has a location decision and a connection agreement. Implementing further offshore wind farm projects, PGE intends to fulfil its strategic goal of achieving at least 6.5 GW of offshore generation capacity in the Baltic Sea by 2040.

In August 2023, PGE companies received final decisions from the Ministry of Infrastructure on five permits that will enable the construction of further offshore wind farms in the future. Total potential capacity of wind farms planned for construction in the new areas is approximately 3.9 GW.

In 2023, PGE Energia Odnawialna continued its activities in the area of the development of its own photovoltaic farms, under which, in the last year, the Group submitted applications to obtain technical connection conditions for more than 700 MW of PV capacity. An analysis of acquisition projects with a total capacity of approximately 1.9 GW was also underway in 2023.

Works on individual facilities at ten PV projects with a total capacity of approximately 95 MW were also completed in 2023. The commissioning of these facilities is planned for 2024. In addition, in 2023, PGE Energia Odnawialna entered into agreements with contractors for the construction of photovoltaic installations with a total capacity of approximately 200 MW, including large farms such as: PV Kleszczów (50 MW), PV Wrzosów (32 MW), PV Jeziórko III (30 MW), PV Tyszki-Wądołowo (10 MW) and PV Tarchały Wielkie (10 MW). The construction of these installations will take place in 2024 and 2025.

As part of the PGE Group’s programme for the construction of photovoltaic installations, preparatory works are underway for the first stage of the construction of photovoltaic farms on the premises of the Bełchatów Complex. These farms are to be erected in such locations as the Szczerców Mountain area, which requires, first and foremost, land rehabilitation, changes to the Conditions Study and Local Spatial Development Plans, as well as obtaining a complete set of administrative decisions. By the end of 2025, PGE will have built installations with a total capacity of around 150 MW in the Szczerców Mountain area.

The 2023 photovoltaic development programme in figures:

Additionally, the Group is preparing to develop cable-pooling wind projects, using existing and newly-constructed photovoltaic and hydro power plants, which will have a total capacity of more than 250 MW. It will be possible to carry out new investments after obtaining the technical conditions for connection to the electricity grid and other required administrative decisions.

The PGE Group currently sees potential for the development of electrochemical energy storage facilities such as

large-scale energy storage facilities operating at the Żarnowiec pumped storage power plant with a capacity of up to 270 MW and the storage facility in Gryfino with a capacity of 400 MW, or approx. 50 smaller energy storage facilities cooperating with the main power supply points in the area of PGE Dystrybucja, with a total capacity of over 250 MW. At the same time, the Group sees opportunities associated with the development of new pumped storage power plants such as ESP Młoty, which also performs an energy storage function in the National Power System. Technical and economic analyses are currently being carried out in order to make an investment decision on the construction of the power plant in Młoty.

In 2023, the following new units were commissioned:

• gas engines at the Zgierz CHP Plant with a total capacity of 13.16 MWe and 14.98 MWt,
• gas engines at the Zawidawie CHP Plant – 2 x AK with a capacity of 1.0 MWe/1.25 MWt each
• a gas boiler plant at the Bydgoszcz CHP Plant – 4 x KRS with a capacity of 9.5 MWt each
• a gas boiler plant at the Kielce CHP Plant – 5 x KRS with a capacity of 32 MWt each
• a gas boiler plant in Siechnice – 4 x KRS with a capacity of 38 MWt each (constructed as part of the new Czechnica CHP Plant)

The construction of new gas-fired CHP units in Siechnice (Czechnica CHP Plant) has been underway since 2021, while the construction of a gas-fired CHP source with a capacity of at least 50 MWe based on gas engines and a back-up and peak heat source at the Bydgoszcz CHP Plant and the construction of a gas-fired unit based on an 8 MWe gas turbine with a water recovery boiler at the Kielce CHP Plant has been in progress since 2022. At the end of 2023, the process of obtaining corporate approvals for the construction of a new cogeneration source based on gas engines in Gdynia was also initiated (a contract was concluded in February 2024). At the end of 2021, the construction of new reserve and peak load boiler plants at locations in Gorzów Wielkopolski, Lublin, Rzeszów and Gdynia began, with a total capacity of around 545 MW, to replace old coal-fired boilers. In 2023, the projects entered a decisive phase of implementation – major components (including gas boilers) were delivered and installed, construction and installation works were being continued. The completion of the works is expected at the latest by the end of Q2 2024. In 2023, the PV Programme for all PGE Energia Ciepła sites began.

PGE Energia Ciepła is also pursuing projects with a longer time horizon as part of dedicated programmes to develop its existing power generation units in Cracow, Gdańsk and Wrocław. They are scheduled to be completed by 2030. In addition, projects relating to the construction of an approx. 30 MWt biomass boiler in Gdynia, the construction of a new heat source in Gryfino and the construction of a new heat source in the Pomorzany CHP Plant are at the preparatory stage.

The following decarbonisation effects are expected:

Security of of heat and electricity supplies from the new power units

Clean air – the predicted reduction in emissions when replacing a coal-fired water boiler with a gas-fired boiler is more than 90 percent for sulphur oxides, 75 percent for nitrogen oxides, 95 percent for particulate matter and 40 percent for carbon dioxide

Higher efficiency – new low- and zero-carbon equipment in CHP plants will cogenerate heat and electricity in parallel

The Bełchatów Power Plant is a significant point source of greenhouse gas emissions. This is due to the fact that it is the largest unit in Poland and in the world generating electricity based on the combustion of lignite, which causes the accumulation of emissions in one location and their significant absolute values.

It is noteworthy that between 1989 and 2022, the Bełchatów Power Plant reduced its CO₂ emissions per unit of energy generated from approximately 1.20 t CO₂/MWh to approximately 1.101 t CO₂/MWh. The decrease in specific CO₂/MWh emissions was as much as 8 percent during this period. Also, the Bełchatów Power Plant emitted 8.8 million tonnes of CO₂ less in 2023 than in 2022.

The new units 5 and 6 at the Opole Power Plant contribute to the decarbonisation of the national power engineering industry due to their significantly higher efficiency. They are being commissioned first before the older units with lower efficiency ratings. As a result, for a given level of electricity supply (the capacity of the installed units) and a stable level of demand in the country (the demand for capacity), the “new” units with lower carbon emissions displace the “old” units with higher CO₂ emissions. The above measures contribute to reducing emissions from the national power generation sector.

In 2023, the emission factor for units 1-4 of the Opole Power Plant was 0.899 Mg/MWh, and for units 5 and 6 of the Opole Power Plant – 0.742 Mg/MWh.

Reductions in carbon dioxide emissions at the Turów Power Plant were achieved by increasing the electricity generation efficiency of units 1-3 and by commissioning a highly efficient unit 7 in 2021. In May 2021, the modern and highly efficient power generation unit 7 was commissioned.

Additionally, investments were made in the development of a district heating network at the Trzciniec Estate and the addition of a local heat exchanger. There was a significant increase in the power and availability of the Turów Power Plant’s district heating system, which allowed for the elimination of CO₂ emissions from household furnaces and the reduction of other pollutants typical of low emission sources.

At the Dolna Odra Power Plant, there has been a gradual reduction in the amount of coal burned since 2013. Since 2004 biomass has been used as an addition to the main fuel, which allows for a reduction in the volume of coal. As part of the modernisation measures carried out on the units operated at the branch, efforts were made to increase the efficiency of electricity generation and consequently reduce CO₂ emissions.

At the Dolna Odra Power Plant, a project is currently underway to build two CCGT power generating units with a gross capacity of around 700 MW each. The primary energy source resulting from the chosen generation technology will be high-methane natural gas. The total project progress, including design work, equipment manufacture and delivery, as well as site works, exceeded 95 percent at the end of December 2023. The company responsible for the project is PGE Gryfino 2050 sp. z o.o. According to the project schedule, which was revised in July 2023, all works should be completed by 30 April 2024.

The implementation of projects providing for the combustion of natural gas as a transitional fuel supports the transition towards climate neutrality. The construction of the two new CCGT units in the Dolna Odra Power Plant is a project of strategic importance for the Polish economy and at the same time important from the perspective of lowering the costs of the energy transition. The average CO₂ emission values of the new units are more than twice lower than the current average emission values for power generation in the National Power System (NPS). This means that energy production in the new units will result in a reduction of CO₂ emissions from energy production in the NPS by approximately 2-3 million tonnes per year. Reduction in emissions is achieved not only by changing the fuel to natural gas, but also by using the latest state-of-the-art gas turbines. Their power generation efficiency exceeds 63 percent. For comparison, CCGT power plants with turbines of the previous generation achieve 59-60 percent efficiency, while the most modern coal-fired units – about 46 percent efficiency.

For the reduction of greenhouse gas emissions at the Rybnik Power Plant, the execution of the 882 MW CCGT unit project is of key importance. The new gas fired power generating unit in Rybnik will replace four coal-fired units that are being decommissioned, with a total capacity of 900 MW. The unit is scheduled to be commissioned in December 2026 and will significantly contribute to the decarbonisation of the National Power System, similar to the new units at the Dolna Odra Power Plant. The emission factor of the new unit is 320g ofCO₂ per kWh of electricity generated, which is three times lower than for 200 MW coal-fired units.