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Polish watchdog sets conditions for PGE to buy EDF power assets
September 28, 2017 / 7:52 AM / 24 days ago

Polish watchdog sets conditions for PGE to buy EDF power assets

WARSAW, Sept 28 (Reuters) - Poland’s PGE may have to sell a coal-fuelled power station or pledge to trade more electricity via the power exchange to get anti-trust approval to buy the local assets of France’s EDF.

State-run PGE agreed to buy EDF’s local power and heating plants for 4.51 billion zlotys ($1.23 billion) in May in a move to increase its market share and give the state more control over the country’s utilities.

After buying EDF assets PGE’s share of the country’s power generation capacity would rise to 45 from 36 percent.

“In our concerns released to PGE we pointed to things we don’t like, mainly the strengthening of its already strong market position,” Marek Niechcial, who is president of the anti-monopoly office UOKiK, told Reuters in an interview.

EDF’s plants include eight combined heat and power plants and a 1.8 gigawatt (GW) coal-fired power plant in Rybnik, in the south of Poland.

The deal, which is supported by Poland’s energy ministry, was unexpectedly questioned in September by UOKiK, which said that the transaction could undermine competition in the energy market. It had been expected to be completed by 2018.

“PGE may propose various solutions. ... Someone else may manage Rybnik, they may sell it, they may increase the sale of energy they produce through the exchange,” Niechcial said.

Selling a plant or the meeting the exchange trade obligation would be challenging for PGE as coal-fuelled power stations are burdened with the costs of carbon emissions, while trading power could hit PGE’s margins.

A spokesman for PGE declined to comment on Thursday. (Reporting by Pawel Sobczak and Marcin Goclowski; editing by Alexander Smith)

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