Since 2021, new units are under construction in Siechnice (CHP Czechnica), while the preparation phase for similar projects is currently underway in Bydgoszcz, Kielce, Zgierz and Gdynia;
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GC-9
PGE Group’s strategy assumes reaching climate neutrality. In the district heating segment, the key date is 2030, when the share of heat generated from zero- or low-emission fuels is to reach 70%.
District heating sector transition
PGE Group’s business strategy adopted in 2020 sets a low- and zero-emission objective for the district heating area.
The key actions taken by PGE that are conducive to the achievement of the set goals are primarily:
- investments in the area of new gas sources,
- thermal waste treatment facilities,
- use of renewable energy as a source of district heating.
PGE Energia Ciepła, being the leader of the heat market in Poland, aims to be a transition leader in the heating sector. In view of the growing expectations of customers and society and the development of the market for system heat consumers in large cities.
Solutions such as the long-term contract signed in May 2021 by PGE Energia Ciepła’s branch in Lublin for the supply of heat to the city’s inhabitants support the implementation of national and international climate policy objectives.
At the end of 2022, PGE Energie Ciepła’s investment application for the investment task: „PGE EC Decarbonisation Plan to 2050”.
It contains detailed actions planned to be taken until 2030 concerning the conduct of in-depth analyses of the transition to low-carbon generation in the district heating segment. The document was created as an operationalisation of the objectives set out in PGE Group’s strategy in the area of generation portfolio transition towards a higher share of low-carbon units and renewable energy.
One of the key initiatives of the plan is the transition of generation assets, which includes in its scope the development and implementation of investment programs for individual PGE Energia Ciepła sites.
Rebuilding of generation capacity is envisaged with a view to 2030 (ending coal-based generation) and 2050 (achieving climate neutrality).
In view of the increasing expectations of customers, society and other stakeholders, as well as active support for the implementation of national as well as international climate policy goals, PGE Energia Ciepła is gradually replacing old coal-fired sources with new low-carbon sources fired by gas and oil.
With a view to further decarbonisation and relative limitations in the availability of natural gas, PGE’s intention is also to maximise the potential of large-scale heat pumps, biomass, waste heat, municipal waste and electrode boilers.
In the case of planned gas-fired units, the possibility of adapting to the future use of hydrogen is also being considered.
The new generating units are characterised by greater operational flexibility and reliability. In 2023-2029 most of PGE Energia Ciepła’s locations will feature installations that result in a total or considerable withdrawal from coal fuel.
The phase out of coal is first planned in Zgierz, Kielce, Lublin, Rzeszów and Gorzów Wielkopolski, followed by CHP plant in Bydgoszcz, Siechnice near Wrocław, Gdynia and Gdańsk.
The key investment projects in this area especially include:
At the turn of 2021 and 2022, a new peak load boiler plant with a capacity of 130 MW was put into service in Gdańsk, which consists of oil and gas boilers and modern electrode boilers powered by electricity. The use of electrode boiler technology at the Gdańsk CHP is an innovative solution in Poland.
Electrode boilers have two functions at the PGE Energia Ciepła CHP plant in Gdansk:
- standby/peak operation, which guarantees the security of heat supply in situations of increased demand at low temperatures. In this case, the electricity supplying the boilers comes directly from the production at the CHP plant.
- enabling additional green energy production by participating in the balancing of the national electricity system. If there is a surplus of energy in the national power system as a result of increased electricity generation by renewable sources (production from wind and/or solar), electrode boilers enable this surplus to be balanced by converting the electricity into 'green heat’. Excess energy in the system particularly occurs when renewable generation increases or demand decreases. Electrode boilers can successfully use this energy to produce heat.
From December 1, 2022 to August 22, 2023, the electrode boilers, working to balance the national power system, produced almost 14,000 GJ of heat for the residents of Gdansk. This solution allowed to avoid burning 682 tonnes of coal and to reduce CO2 emissions into the atmosphere by more than 1,400 tonnes.
14,055
GJ
This is how much "green heat" was produced for the residents of Gdansk by electrode boilers
682
tons
Less coal burned thanks to electrode boilers
1,418
tons
Less CO₂ went into the atmosphere thanks to electrode boilers
Data for the period December 1, 2022 – August 22, 2023
The construction of new peak load and reserve boiler plants started at the end of 2021 at six other locations, i.e. in Gorzów Wielkopolski, Lublin, Rzeszów, Kielce, Gdynia and Bydgoszcz, with a total capacity of approx. 743 MW, in order to replace the old coal-fired boilers. In 2022, the projects entered the decisive phase of implementation – the main components (including gas boilers) were delivered and installed, and construction and assembly works were carried out. The work is expected to be completed by the end of 2023 at the latest, so that the newly built peak load boiler plants will be commissioned by 2024 at the latest.
In May 2023 a 160 MWt gas-fired boiler plant was completed at the CHP plant in Kielce. Already in July 2023, a state-of-the-art, low-emission gas-fired boiler plant with a total capacity of approx. 40 MW was commissioned at the Bydgoszcz I CHP Plant.
At the CHP plant in Gdynia, the construction of Peak Reserve Boiler Plant No. 2 is underway. Three oil-gas fired water boilers, each with a capacity of 30 MW, have already been installed, the chimney for the new generation source was erected and the construction of the boiler plant building is virtually complete. The new Reserve and Peak Boiler Plant No. 2 will replace the largest coal-fired district heating boiler, which has operated for about 100,000 hours since the end of the 1970s. Its permanent decommissioning will bring tangible environmental effects: sulphur oxides emissions will decrease by more than 40 times, nitrogen oxides by 10 times and particulates matter by 20 times. Coal fuel consumption will be reduced by 20,000 tonnes per year, as a result of which 330 wagons of coal will no longer enter Gdynia. The target for this investment is gas fuel at the Gdynia CHP Plant in 2026. The boiler plant is scheduled for commissioning in November 2023.
PGE Energia Ciepła is also implementing projects with a longer time horizon as part of dedicated programs for the development of the existing generating assets in Kraków, Gdańsk and Wrocław. These are expected to be completed by 2030. The assumptions for these PGE Group projects are drafted on the basis of analysis of potential regulatory trends, also in cooperation with industry organisations on the national and EU level. The development projects analysed also consider the use of hydrogen-ready technology, enabling the co-combustion of hydrogen, which in the long term offers an opportunity to significantly reduce CO2 emissions in cogeneration systems.
Selected projects
New EC Czechnica
In June 2021, KOGENERACJA (a PGE Group company) signed a contract for the construction of a gas-fired combined heat and power plant in Siechnice (New EC Czechnica). The new EC Czechnica will have a thermal capacity of 315 MWt and an electrical capacity of 179 MWe and will replace coal-fired units. The unit is expected to be put into service at the beginning of 2024. The value of the contract signed for the investment in Siechnice is PLN 1.160 billion.
The construction site was handed over to the General Contractor. In 2022, reserve-peak boilers and gas turbines were placed on foundations. The foundations of the 110kV switching station and the steam turbine unit were completed. The installation of the reserve-peak boiler room technology was concluded in the first quarter of 2023. The boiler room is being prepared for operation. Installation work on the recovery boilers and auxiliary plant are underway.
The financial advancement of the project is about 58% (as of the end of July 2023).
This investment of key importance for the Wrocław agglomeration has already received the following funding:
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A preferential loan of up to PLN 300 million from the Energy Plus priority program implemented by the National Fund for Environmental Protection and Water Management (NFOŚiGW)
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A subsidy of PLN 50 million from the NFOŚiGW
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A grant of more than PLN 30 million provided under the Environment, Energy and Climate Change Program co-financed by the European Economic Area Financial Mechanism 2014-2021
In March 2021, the individual co-generation bonus for the New EC Czechnica unit was granted in a decision of the President of the Energy Regulatory Office.
Ecological effects - expected emission reduction
CO₂
from 450 kg/MWh to 220 kg/MWh
SO₂
by 90%
NOx
by 53%
Particulate matter
by 17%
Proceeds from PGE Polska Grupa Energetyczna share issue for decarbonisation of district heating
Some of the expenditures on the decarbonisation of district heating will come from funds raised through the series E share issue that took place in the first half of 2022. The total capital expenditure on the construction of the three gas units (EC Kielce, EC Zgierz, EC Bydgoszcz) is estimated at around PLN 460 million, of which PLN 230 million will be financed with proceeds from the share issue.
PROGRAM ASSUMPTIONS
| Electric capacity | Thermal capacity | Entry into service | Total CAPEX | Funding from new share issue | |
|---|---|---|---|---|---|
| EC Zgierz | 15 MWe | 13 MWt | 2023 | PLN 90 million | PLN 45 million |
| EC Kielce | 8 MWe | 14 MWt | 2024 | PLN 70 million | PLN 35 million |
| EC Bydgoszcz | 54 MWe | 41 MWt | 2025 | PLN 300 million | PLN 150 million |
Strategic rationale:
- Filling capacity deficit after shutting down of the WP120 coal fired boiler and two WR-25 boilers
- Construction of a new low-emission cogeneration system with a gas turbine
- Investment execution will cover heat demand in Kielce
Strategic rationale:
- Investment execution will allow to cover heat demand in Zgierz after the old coal-fired boiler OF-100 is decommissioned
- Reducing the carbon intensity of the generating units within the city of Zgierz
EC Bydgoszcz decarbonisation project under the New Issue
Strategic rationale:
- Covering capacity deficit after decommissioning of older coal-fired boilers K1 and K2 in Bydgoszcz
- Reducing the carbon intensity of the generating units within the city of Bydgoszcz
2nd waste-to-energy incinerator line in Rzeszów
On May 26, 2022, the CHP Rzeszów branch of PGE Energia Ciepła signed a contract with a contractor to build the second technological line for a waste-to-energy incinerator.
The second line of the incinerator will be housed in an existing building and will make maximum use of the existing infrastructure that was built during the construction of the 1st technological line, put into operation at the end of 2018. From the outset, the realisation of the incinerator in Rzeszów envisaged the construction of two technological lines with a total processing capacity of 180,000 tonnes of waste per year. Under to these assumptions, the main building was designed together with communication solutions and auxiliary installations. The current capacity of the first line is approximately 100,000 tonnes of waste per year. The capacity of the second process line will be approximately 80,000 tonnes of waste per year.
Under the contract, works related to the installation of the second process line at the incinerator are expected to be completed in the fourth quarter of 2024.
On September 21, 2022, the construction site was handed over to the Contractor by protocol. On November 21, 2022, the Construction Permit was obtained. In the first quarter of 2023, design work and equipment contracting were carried out. Equipment deliveries are planned for the second half of 2023.
The expanded incinerator system will continue to process municipal waste and recover electricity and heat from it for the residents of Rzeszów connected to the city’s district heating system. The functioning installation contributes to a significant improvement in environmental conditions by reducing landfilling of municipal waste in favour of its on-going processing for energy purposes, and also because of the reduction of fossil fuel combustion in the heat generation process.
We are the largest producer of household heat in Poland, so this is a huge responsibility. PGE's district heating segment is growing very fast and transforming towards low-carbon. We are diversifying our generation sources and investing in RES to provide as much energy as possible from clean sources, while at the same time ensuring the safety and comfort of heat consumers. We already have, for example, electrode or biomass boilers in operation in our resources, we are obtaining heat from waste, and we are also planning to build photovoltaic farms in our heating plants. I can also already assure you that as of 2024, we will stop producing heat from coal in the PGE Energia Ciepła branches in Lublin, Rzeszów, Zgierz and Gorzów Wielkopolski, and we will also commission the Czechnica CHP plant, which is being built from scratch, to work for the residents of Wrocław. In total, PGE Energia Ciepła has around thirty investments in the pipeline and plans to permanently change the face of the Polish district heating industry over the next few years.
Summary of activities in 2022
| Objectives | Objectives Actions and results in 2022 |
|---|---|
| District-heating transition: Share of zero- and low-carbon sources in heating production at approx. 70% by 2030 |
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