02 April 2020
15 villages saved as PGE abandons Gubin mega mine due to bleak coal financials
WARSAW, 2 April 2020 – Polish state-owned energy company PGE has omitted the Gubin coal mine project from its latest financial report, confirming in this way that it has been shelved. This means that at least a billion tonnes of coal will be left in the ground.
Today, PGE is scheduled to present to the media its 2019 financials [1], showing a 17 percent drop in lignite and 11 percent decline in hard coal power plant generation. Its coal assets have been chronically underperforming, as shown by the Institute for Energy Economics and Financial Analysis (IEEFA) earlier this year [2]. PGE bungled the Gubin project from early on by also failing to secure an Environmental Impact Assessment for the mine in time. As a result, 3,000 people in 15 villages will no longer be unjustly displaced, and a 2,700-3,000 MW coal plant will not be built, for which the mine was meant to produce coal.
“The absence of the Gubin coal mine project in PGE’s financials is proof that the company has abandoned the project. Its own financial reporting also shows that the future is similarly bleak for its other controversial Zloczew and Turow lignite mining projects,” said Kathrin Gutmann, Europe Beyond Coal campaign director. “The only way to break the cycle of decline for European coal businesses like PGE is to get moving on a rapid and just transition to renewable energy.”
“PGE’s financial report and the quiet end of Gubin demonstrate that the political fiction of a viable coal industry in Poland is over,” said Kuba Gogolewski, senior finance campaigner with Fundacja “Rozwój TAK – Odkrywki NIE”. “The declining economics of coal doomed Gubin, and should be ringing alarm bells for a company obstinately clinging to fever dreams of further mining expansion at Złoczew and Turów. Last year PGE generated over 50 TWh of electricity burning uneconomic coal, and only 2.29 TWh from renewable sources that expose it to fewer risks, while securing higher profitability. If PGE doesn’t wake up, it will be workers and Polish taxpayers that pay the price of its failures.”
Contacts:
Alastair Clewer, Communications Officer, Europe Beyond Coal
alastair@beyond-coal.eu, +49 176 433 07 185
Kuba Gogolewski, Senior Finance Campaigner with Polish Foundation “Rozwój TAK – Odkrywki NIE” (English, Polish)
k.gogolewski@fundacja.rt-on.pl, +48 661 862 611
Notes:
- PGE management board report for 2019: https://www.gkpge.pl/Investor-Relations/content/download/51567/plik/Mngmnt_Board_consolidated_report_PGE_CG_2019.pdf
The report shows that PGE faces other financial headwinds, as EUA costs almost doubled in 2019 (EUR 704 million) compared to 2018 (EUR 368 million). In 2019 PGE’s debt amounted to EUR 2.65 billion, in comparison, Złoczew would cost EUR 2.6 – 3.7 billion to build. PGE generated over 50 TWh from coal in 2019, a 14 percent drop from the previous year, and only 2,29 TWh from renewable sources. - Underperformance of PGE coal assets analysed by IEEFA: https://ieefa.org/ieefa-report-polands-pge-must-invest-today-in-renewables-to-replace-declining-coal-generation-profits/
From IEEFA: “[PGE’s 2015-2025] strategy was to invest in coal and lignite by building new coal power plants, modernising existing ones (to extend their operating life) and buying the Polish coal fleet of the French utility EDF. In the process, PGE has made record investments in conventional generation. But the company has seen profits from this business fall dramatically.” - One billion tonnes of coal was expected to be extracted from Gubin, andit had a total geological reserve of an estimated 3.6 billion tonnes.
About:
Europe Beyond Coal is an alliance of civil society groups working to catalyse the closures of coal mines and power plants, prevent the building of any new coal projects and hasten the just transition to clean, renewable energy and energy efficiency. Our groups are devoting their time, energy and resources to this independent campaign to make Europe coal free by 2030 or sooner. www.beyond-coal.eu