Poland is on a path to high construction costs and unreliable operations as it contemplates a new gasified coal power plant in the town of Łęczna, according to an analysis by the Institute for Energy Economics and Financial Analysis that looked at the performance of similar technology in the United States.
“The report questions ENEA SA’s construction and operational cost estimates for Łęczna, as well as the day-to-day viability of the project if it were built, and its impact on consumers,” IEEFA writes in a release. “It concludes that the proposed project would be unable to compete with increasingly inexpensive forms of renewable energy.”
Experience in the U.S. “has shown that it is extremely expensive to build and operate new IGCC (integrated gasification combined cycle) power plants, and that, once completed, these plants do not operate reliably,” wrote lead author David Schlissel, IEEFA’s director of resource planning analysis. “This is especially true for systems involved in the gasification of coal.”
IEEFA compared the new plant proposed by Polish utility ENEA SA and two massive failures in the U.S.—Southern Company’s Kemper County Energy Facility in Mississippi and Duke Energy’s Edwardsport Power Station in Indiana.
Construction at Edwardsport went over budget by more than US$1 billion, while the price tag for Kemper ballooned from $2.4 to more than $7.5 billion, and both facilities were delayed. After the plants were commissioned, “Kemper operators gave up on coal gasification entirely, and the plant runs now on natural gas,” IEEFA states. “Edwardsport has been hobbled by ‘parasitic’ power loads that sap much of the electricity it produces to run its own equipment. As a result, the plant has operated at barely half its peak capacity, including both the time that it runs on gasified coal and on natural gas.”
And now, Schlissel warned, the Łęczna plant may run afoul of “unrealistic assumptions” about construction costs, net installed capacity, operating costs, and the plant’s heat rate. “The report concludes that the Łęczna project may emit more carbon dioxide than ENEA has acknowledged, and that its electricity would be prohibitively expensive,” IEEFA writes. On that latter point, Schlissel noted that the Edwardsport facility cost Duke Energy customers $143.19 per megawatt-hour—or $175.53 after factoring in financing costs.
Meanwhile, former deputy prime minister Janusz Steinhoff, now an energy specialist with the Polish Chamber of Commerce, is urging the government to hasten the transition from coal to low-carbon technologies and scale back its ownership of power utilities, reports Montel, a European energy market news outlet. The feedback follows last year’s acquisition of five gigawatts of coal-fired capacity from French energy companies Engie and EDF, giving state-owned Enea and PGE a majority stake in the industry.
“The state should not create energy policy through utilities which it owns—this is a solution from the Soviet era,” Steinhoff told a conference in Katowice, where this year’s United Nations climate conference will convene in December. “The government’s role as owner and regulator casts doubt as to an even field for players.”