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Polish combined-cycle gas-fired power station lands EIB loan

  |   May 15, 2013 at 12:04 AM
STALOWA WOLA, Poland, May 15 (UPI) -- European financiers are sinking $364 million into new combined-cycle gas turbine power station in Poland to help it diversify from coal-fired generation.

The European Investment Bank announced Monday it is proceeding with a $182 million loan to a joint venture including Polish utility Tauron and state-owned national gas and oil company PGNiG to build a 450-megawatt CCGT power plant in the southeastern industrial city of Stalowa Wola.

Another $182 million in loans from the European Bank for Reconstruction and Development was announced last month.

The facility, with a total cost of $486 million, is expected to open in late 2015. It will also provide 240 megawatts of thermal output for heating homes in the city of 65,000 while operating at a thermal efficiency of 60 percent -- one of the highest ratings in Europe.

EIB officials said the plant will serve as a demonstration for the feasibility of using CCGT technology to help Poland reach its goals of reducing its dependence on coal for electricity generation. The country currently uses obsolete, inefficient coal-fired power units from the 1950s and 1960s for 90 percent of its electricity needs.

Its continued reliance on coal has put it at odds with the European Commission, which is seeking to develop binding greenhouse gas reduction goals for beyond 2020 to counter global warming.

Stalowa Wola has four coal-fired units producing a total of 250 megawatts. The new project, to be built next door, would become Poland's biggest CCGT project. Government officials estimate the new unit will produce about 3,500 gigawatt-hours of electricity per year while consuming 600 million cubic meters of natural gas annually.

The new unit would also eliminate 100,000 tons of coal consumption annually at Stalowa Wola.

GE last year was tapped to provide a Frame 9F 5-series gas turbine and generator to Spain's Abengoa -- the engineering, procurement and construction contractor for the Polish project. GE has also has signed a separate contract with Abengoa to provide maintenance services for the plant for 12 years.

Nandita Parshad, director of power and energy utilities for the European Bank for Reconstruction, said last month the project is an important one in Poland's efforts to cut its carbon footprint.

"Replacement of old coal-fired generation units with a modern gas-fired unit allows an increase of combustion cycle efficiency, as well as significantly lowers (carbon dioxide) and (nitrous oxide) emissions," she said.

There are plans for more CCGT-based power generation capacity in Poland, PricewaterhouseCoopers and ING said in a 2012 report, including a 900-megawatt unit planned by Tauron and the Polish mining company KGHM in Blachownia, which would consume 1.1 billion cubic meters of natural gas per year.

An 840-megawatt CCGT plant from state-owned Polska Grupa Energetyczna and a 900-megawatt effort from Energa SA in Grudziadz are also on the boards, the report said.

The new Stalowa Wola plant is part of the Polish government's "Full of Energy" strategy, which Finance Minister Mikolaj Budzanowski says is meant to "change the face of the Polish energy policy."

In addition to investment in Stalowa Wola, the effort also includes the construction of an LNG terminal in Swinoujscie, as well as the construction of more than 600 miles of gas pipelines he said will allow Poland "to create a mature and efficient gas market."

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