August 1, 2019 / 10:53 AM / 20 days ago

Polish court ruling undermines Poland's last coal power plant plan

WARSAW (Reuters) - A Polish district court has ruled as invalid last year’s decision by state-run utility Enea (ENAE.WA) to join a project to build a 1 gigawatt (GW) coal-fueled power plant in cooperation with peer Energa (ENGP.WA), Enea said on Thursday.

The planned power plant at Ostroleka in north-east Poland was supposed to be the last coal-based project in the coal-dependent country, the energy minister had said.

The project, which is expected to be completed in 2023 at a cost of 6 billion zlotys ($1.5 billion), has been opposed by environmentalists who say it only strengthens Poland’s reliance on coal and is not economically justifiable.

The plan to build the plant was initially revived by Energa, another state-run energy group, in 2016 in response to a government policy to keep using coal as the basic source of energy over the long term.

Enea’s shareholders voted in September last year in favor of the company joining the project. But the vote was questioned by environmental lawyers ClientEarth, who asked the court to rule Enea shareholders’ decision invalid.

Enea didn’t give any details on the reasoning for the court’s ruling on Wednesday, which is appealable, and was not immediately available to comment.

Shares in Enea and Energa were more than 2% higher by 1032 GMT.

“This is a clear signal and major opportunity for the companies and for the industry at large,” said Marcin Stoczkiewicz, the head of ClientEarth Poland.

“Enea and Energa need to look at what the future of energy is in Poland. There is vast employment potential in cheaper, domestic renewables.”

Poland’s ruling Law and Justice (PiS) party won the 2015 general election partly on promises to sustain the coal industry. But recently it has signaled a change in direction toward green energy as the issue of air quality has become more prominent.

Another state-run utility Tauron (TPE.WA) said in May it 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.

($1 = 3.8868 zlotys)

Reporting by Agnieszka Barteczko; Editing by David Holmes and Kirsten Donovan

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