WARSAW, May 28 (Reuters) - Poland’s state-run utility Tauron plans to replace most of its coal-burning power plants with renewable sources of energy in the coming decade to adjust to European Union climate policies and secure future financing.
By 2030 Tauron wants green energy sources, including wind farms and solar panels, to account for 65 percent of its power generation, it said in a strategy update.
“What motivated us to update the strategy? First of all the necessity to follow global megatrends, the awareness of certain processes in result of which our whole business is changing,” Chief Executive Filip Grzegorczyk told a journalists on Tuesday.
“The first element is definitely tightening of the EU climate policy,” he added.
Sustaining the coal industry has been one of the main industrial policies of Poland’s ruling nationalists, the Law and Justice party (PiS), but surging carbon emission costs are forcing many utilities to turn towards cheaper sources of renewable energy.
Tauron deputy head Kamil Kaminski said the company needed to adjust to the changing expectations of clients, who often ask for electricity from clean sources and are considering becoming so-called prosumers, entities who produce and consume energy.
Tauron is the most indebted utility in Poland, with total debt amounting to 11.8 billion zlotys ($3.1 billion) as of end of the first quarter, and hopes that the shift towards green energy would help it attract funding in future as banks have become reluctant to finance coal.
“It is not that our banks expect that we turn towards green energy because otherwise they will withdraw their financing. There is nothing like this, but we see that even the banks’ internal regulations toughen and I cannot rule out that such talks would take place in 2-3 years,” Tauron’s Financial Chief Officer Marek Wadowski told journalists when asked if turning green was a condition set by any of Tauron’s debt holders.
Tauron’s bond holders include state-run bank BGK and European Investment Bank (EIB).
The group’s representatives reiterated that Tauron planned to invest in onshore wind farms of total capacity amounting at 900 megawatts (MW) and solar wind farms of 300 MW by 2025.
Tauron estimates this investment at 5-6 billion zlotys but is considering a capital partnership with financial institutions for the projects. The company will need to verify its green energy plans though if the planned sale of one of its three coal mines and heating unit fails, Wadowski said. ($1 = 3.8381 zlotys) (Reporting by Agnieszka Barteczko; editing by David Evans)