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Contract for the construction of Ostrołęka C Power Plant signed

12.07.2018

On 12 July 2018, a contract for the construction of 1,000 MW_eOstrołęka C Power Plant was signed in Ostrołęka. The cutting-edge low-emission power unit will have a material impact on Poland’s energy security. The investment project will contribute to the development of Ostrołęka and Northeast Poland in general. The ceremonial signing of the contract with the General Contractor was attended by the Minister of Energy, Krzysztof Tchórzewski.

Other guests participating in the ceremony included: John L. Armstrong, Counselor for Economic Affairs at the U.S. Embassy in Poland, Arkadiusz Siwko, President of Energa S.A., and Mirosław Kowalik, President of ENEA S.A., members of the Polish Parliament, representatives of the local authorities of Ostrołęka headed by the City’s President, Janusz Kotowski, all those who do care about implementing the project.

The joint investment project of Energa Group and ENEA Group is being implemented under the investment agreement by an SPV, Elektrownia Ostrołęka sp. z o.o. On 12 July 2018, in Ostrołęka, SPV’s representatives signed a contract with the General Contractor selected through a competitive dialogue procedure for the award of a sector-specific public contract. The contract-award procedure winner is the consortium of GE companies (GE Power sp. z o.o. and Alstom Power Systems SAS). The consortium’s bid value is PLN 5.05 billion net (PLN 6.023 billion gross).

The General Contractor, GE Power, offered the turn-key construction of a condensing power unit of 1,000 MW_e power output and 46% efficiency. The General Contractor’s responsibilities include, without limitation, engineering, obtaining any required building permit decisions, site preparation, civil works, and obtaining occupancy permit decisions before the final takeover. The key features of this investment project are high-end technologies and highest environmental standards.

– The new power unit in Ostrołęka C Power Plant which meets EU’s strict emission standards is what the Polish power system needs. At present, high-end power units of this kind increase the power system stability and meet the power demand of the forthcoming years. Such investment projects make it possible to develop renewable energy sources, – said Krzysztof Tchórzewski, the Minister of Energy.

The new 1,000 MW_e power unit will be yet another stable, highly efficient low-emission energy source within the National Power System.

– Ostrołęka C Power Plant is an example of the advancing modernisation of the Polish energy industry. The new power unit will be yet another stable, highly efficient low-emission energy source of the power output of approx. 1 GW making up the strategic foundations of the National Power System based on coal from safe and predictable Polish sources, – said Mirosław Kowalik, ENEA President. – We will use our competence and the experience gained during the construction of the cutting-edge 1,075 MW power unit at Kozienice Power Plant whose first months of operation prove that state-of-the-art coal technologies fit very well into building Poland’s energy security, – ENEA President added.

– The new power unit in Ostrołęka C Power Plant will have a material impact on Poland’s energy security. It contributes to the process of modernising national power sector and, what is important, will be fired with Polish coal, – said Arkadiusz Siwko, Energa President. – According to the assumptions, the project will be based on cutting-edge technologies and meet the highest environmental standards. It is a guarantee of reinforcing our position on the electric power generation market and also a satisfactory rate of return for our shareholders, – Energa President added.

Immediately after signing the contract, the General Contractor will be able to begin the organisational works such as construction site preparation, commencing the engineering stage, and other operations related to mobilisation of its resources, so as to take best care of the security of the project implementation schedule. The signing of a contract between the SPV and the General Contractor is not equivalent to the approval for issuing the notice to proceed (NTP).

– We are commencing an investment project of special significance to our shareholders, Energa and ENEA, – said Edward Siurnicki, President of Elektrownia Ostrołęka. – There are a few years of intensive work ahead of our company and the General Contractor. We are convinced that by using GE’s experience we will be able to complete the task that was assigned to us and begin operating the new power plant in 2023, – Elektrownia Ostrołęka President added.

The new power plant’s first synchronisation is expected to take place in 2023. SPV has the complete technical dossier and the required administrative and corporate decisions which were necessary for announcing the public contract award procedure, selecting the winning bid, and signing the contract with the General Contractor.

The project is located on the area where the city of Ostrołęka and the Rzekuń municipality border. The project scale is also huge in the context of generating a significant impulse to Poland’s GDP growth and the development of Ostrołęka region (during the peak construction phase, the number of employed persons is expected to reach 2.5 thousand).

– With this project, we are entering a new era in the economic history of our city. After many years, local community’s expectations are finally met, both in social and in economic terms, – said Janusz Kotowski, President of the City of Ostrołęka. – We know this will be the most advanced coal-fired power plant in many ways: very efficient, environment-friendly, and meeting the strictest environmental protection standards. Our city already has some positive experience from cooperating with Energa Group (which provided, for instance, millions of PLN to support road reconstruction and bridge repair). We treat collaboration for the sake of the construction of the new unit in the power plant as our priority. This Northeast Poland’s largest investment project will warrant stable situation on the labour market for many years and bring good financial future for Ostrołęka, even if we consider taxes only. Energa’s new giant investment project is a huge growth opportunity for Ostrołęka and for the entire region, – the President of the City of Ostrołęka emphasised.

GE Power will implement the project with the support of the local supply chain made up of over 5,000 Polish vendors.

– We are very happy about the contract for the construction of Ostrołęka C Power Plant that we have signed today, as we are closer to beginning the works on this important project that will result in generating energy sufficient to feed 300,000 Polish households. This is yet another proof of our involvement in the development of the Polish power sector in which we have participated for more than 70 years with our factories in Elbląg and Wrocław. The project will also support the economic development of the country. Just as it was in the case of Opole project, we are planning to take advantage of our well-developed, tried and tested chain of partners and subcontractors from Poland, – said Andreas Lusch, GE Steam Power President.

Investment project characteristics

With the new power unit of 1,000 MW_e gross power output and net power efficiency at the level of 46%, Ostrołęka C Power Plant will be yet another stable, highly efficient low-emission energy source operating on the basis of Polish fuel. Ostrołęka C Power Plant will meet all emission standards required of large combustion plants (LCP), including those resulting from BAT conclusions. In the joint implementation of Ostrołęka C Power Plant project, Energa Group and ENEA Group wish to employ the expertise and experience gained by ENEA during the construction of the new power unit in Kozienice Power Plant.

The high-efficiency hard coal-fired power unit of the gross power output of 1,000 MW_e working on supercritical steam parameters will employ cutting-edge technologies enabling the power unit operation with high availability and efficiency. The technologies used will also enable to fully utilise coal combustion by-products thanks to building state-of-the-art and efficient auxiliary systems to support all economies to be operated in the power plant. This is an investment project of key importance to the Polish energy security.

Project technical parameters: