The ORLEN Group is a significant producer of electricity and heat, used in large part to satisfy the Group’s own production needs, as well as one of main distributors of electricity in Poland. It is also one of the largest consumers of gas in Poland and an active participant in the process of gas market liberalisation.
Main production assetsof the ORLEN Group
The ORLEN Group’s power generation assets and their technical parameters
Wind power plants
Hydroelectric power plants
Commercial power plants
Offshore wind power generation
Offshore wind power generation
Through its special purpose vehicle Baltic Power, PKN ORLEN holds a licence (i.e. a permit to construct and use artificial islands, structures and equipment within Polish sea areas) to build offshore wind farms in the Baltic Sea with a capacity up to 1,200 MW, complete with technical equipment, measurement instrumentation and maintenance infrastructure. The licence area, of approximately 131 sq. km., is located about 23 km north of the Baltic coastline, roughly at the latitude of Choczewo and Łeba. The offshore wind power project is consistent with PKN ORLEN’s strategy and is in line with long-term plans for development of Poland’s energy sector. It will support generation of zero-emission energy which can be used for the Company’s own consumption, processed, stored, or sold.
In line with the planned schedule and budget for 2020, an environmental survey in the wind farm area, preliminary seabed survey and wind survey were completed, negotiations and grid connection agreements were finalised (the agreement was signed in January 2021) and two offshore cable laying permits were secured. An application for an environmental decision was also submitted within the planned time frame and is now being processed. As a result of these activities, preparations for the main geotechnical seabed surveys could be started and design work was launched for the offshore wind farm equipment and connection.
Work was carried out within the individual workstreams to secure port and logistics infrastructure and a preliminary supply chain plan was developed for the project. The PKN ORLEN team engaged in an active dialogue with market participants, which included one of the first market meetings: the Offshore Wind Supply Chain Meeting, and they cooperated actively with internal and external project stakeholders.
The preliminary engineering and building permit design will be prepared by Offshore Design Engineering Ltd, a UK-based company with more than 20 years of experience with such assignments. This work stage was preceded by months of wind surveys and examinations of the geological structure of the seabed. The completion of design work will enable the project implementation schedule to be planned in detail. Offshore Design Engineering Ltd designs offshore wind farms for the world’s largest companies and project owners. Its track record includes almost 8 GW designed in UK waters, and 3.2 GW in North European seas and in other parts of the world, where another 2.6 GW of generation capacity designed by ODE is being developed. The contract signed with the contractor includes preparation of detailed technical designs for the main offshore wind farm equipment.
In January 2021, Canada-based Northland Power Inc. became PKN ORLEN’s strategic partner for its offshore wind farm project in the Baltic Sea. The parties’ cooperation is to involve the preparation, development and operation of a wind farm with a target capacity of up to 1.2 GW. The Canadian company will ultimately acquire a 49% interest in the project. The purpose of the partnership with Northland Power Inc. is joint implementation of the Baltic Power wind farm project. NP Baltic Wind B.V. of the Netherlands, which is a wholly-owned indirect subsidiary of Northland Power Inc. (NPI), listed on the Toronto Stock Exchange, will be a direct shareholder of Baltic Power after the joint venture agreement is executed. NP Baltic Wind B.V. is a special purpose vehicle established by NPI for the purposes of the project to be executed jointly with PKN ORLEN.
Electricity distribution is part of the ORLEN Group’s core business. This activity is regulated in Poland and it is based on tariffs approved by the President of the Energy Regulatory Office (URE). Energa Operator S.A. is the leading entity within this business line. The Group’s distribution assets are located in northern and central Poland. The Group uses them to supply electricity to 3.2 million customers, of which approximately 3.0 million have signed comprehensive agreements and 178,000 are TPA (third party access) customers.
As at the end of 2020, the total length of the Group’s power lines exceeded 191 thousand km and covered almost 75 thousand sq. km, i.e. about one-fourth of the area of Poland. Since 2020, the ORLEN Group’s distribution business has been promoting and pursuing a strategy adopted by the European Union that involves energy decarbonisation and reduction of emissions from transport, especially in urban areas. The key activity undertaken by Energa Operator S.A. with this aim in mind is the construction of 283 EV charging stations across 8 cities: Gdańsk, Gdynia, Koszalin, Elbląg, Olsztyn, Płock, Toruń and Włocławek, by the end of March 2021. Charging stations and electric vehicles using the stations will not only increase the demand for electricity in the Polish Power System (replacing hydrocarbon fuels), but also, due to their built-in energy storage, are likely to become a participant of the balancing market in the future relying on the V2G technology, i.e. two-way electricity flow at charging stations.