Poland plans to merge utilities, carve out coal

Poland plans to merge its three utilities PGE, Enea and Tauron into two groups as part of a planned reform of its coal and energy industry, its deputy prime minister was quoted saying by Dziennik Gazeta Prawna (DGP) daily.

The two new groups would comprise the coal and non-coal operations of the three companies, Jasek Sasin was quoted as saying by DGP on Monday.

Poland generates most of its electricity from burning coal and has been the only European Union member which refused to pledge carbon neutrality by 2050.

The ruling Law and Justice (PiS) party took power in 2015 partly on promises to sustain coal, but it has closed a number of mines since then and has encouraged investment in solar energy.

“We are all surprised with the pace of climate policy changes … Today we need to reevaluate some comments due to what is happening around us,” Sasin said.

He added that Polish power stations will likely stop burning coal in 2050 or 2060.

“Our plan is creating from the three energy groups – Tauron, PGE and Enea – two entities. One would be coal (based) and the other non-coal. We are consulting this with the European Commission,” Sasin said.

Poland had planned to announce deep cuts in its biggest coal producer PGG last week, by closing two mines and reducing PGG’s output.

The government unexpectedly backed away from the plan and said in the next two months it would work with trade unions on a new restructuring project for PGG.

“Finding a real alternative for the solution that was on the table will be very difficult,” Sasin said, adding that Poland’s coal stockpiles at mines and power stations stood at 15 million tonnes.

Sasin also said the mines that PGG planned to close as part of the restructuring account for 95% of the group’s losses.