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The Warsaw Voice » Other » March 12, 2008
The Wrocław Voice
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Investing in Power
March 12, 2008   
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Remigiusz Nowakowski, chairman and general manager of EnergiaPro Koncern Energetyczny, a power distribution company based in Wrocław, talks to Barbara Deręgowska.

EnergiaPro is a part of Tauron Polska Energia, a major heat and power group established a year ago. How does EnergiaPro plan to develop its operations in the Lower Silesia and Opole regions?
Tauron Polska Energia is the second biggest producer of power in Poland and a leader in terms of power sales to both corporate and individual clients, with an annual sales revenue of more than zl.9 billion. The group's strategy for the coming years calls for concentrating on the power sector, primarily by increasing production capacity and developing the distribution network. The group will also expand its activities to enlist more corporate and retail clients. As a distribution company that is a member of Tauron Polska Energia, EnergiaPro pursues the economic goals of the entire group while strengthening its own market position.

With this goal in mind, we keep increasing our investment in the power infrastructure. Network extension and modernization are particularly important now that good economic trends in the country encourage the development of companies and stimulate demand for power. As new customers appear, ensuring energy security to all our clients is a priority for us. The development of our infrastructure has a major influence on the development of the whole region.

How does your business strategy benefit Lower Silesia?
The main goal of the vertical consolidation, based on the merger of power producers and distributors as part of Tauron Polska Energia, was to create a business strong enough to effectively compete with other companies on the European energy market, which will help increase the region's energy security in terms of power supply. What's more, such a consolidation will enable more effective management of the entire energy production chain. That will make it possible to cut operating costs and increase the revenues and value of the group's companies. As a result, the member companies, including EnergiaPro, will have more funds for investment.

Many say Lower Silesia needs a new power plant to meet its growing demand for electricity. Is it true that EnergiaPro is interested in building such a facility?
Indeed, when you look at the existing sources of energy in the region, you can see that Lower Silesia really needs a new power plant. In October Tauron Polska Energia, EnergiaPro and KGHM Polska MiedĽ, one of the largest buyers of power in Poland, signed a letter of intent to build a power-generating unit of at least 800 MWe near the city of Legnica. Earlier, KGHM worked on its own plan to build new sources of energy based on natural gas, but the project was never carried out. We think that combining the efforts of such big companies for the construction of a new gas-fired power plant may be beneficial for all the parties involved as well as all power buyers in Lower Silesia.

What fuels will the new power plant use and what other facilities will have to be built as part of the project?
The final decision on the type of fuel that will be used in this new facility has yet to be made. We have to carry out a range of analyses in order to choose the best option. We will certainly not go for projects that would be doomed to failure because of too much competition. In the first place, we plan to build a unit fueled by either coal or natural gas or both. In the long run, the unit might use lignite, which is plentiful around Legnica. However, for the time being, no environment-friendly lignite mining technology is available. We are also considering a range of projects related to the launch of a lignite-fired unit, including the design and construction of a lignite mine, but that would make the whole undertaking much more time-consuming. That is why we want to find a site that would make it possible to expand the project in the future to include lignite-fired units.

There is a lot of competition on the energy market. Does your project stand a chance of winning government support?
Swedish corporation Vattenfall is thinking of building a similar power plant near ¦cinawa [a town near Lubin in the Lower Silesia region]. While it often happens that Western companies are more efficient than local companies here, this is not always the case. I believe that state-owned companies can be as efficient as private companies. Everything depends on the managerial staff and their determination to pursue the company's goals, in addition to good cooperation with the owner in making strategic decisions. When it comes to decision making, the government has a dominant position in KGHM, Tauron Polska Energia and EnergiaPro, and therefore its approach is very important. We are going to talk about that with the economy minister and the Treasury minister soon.

Cross-border power links between Poland and its neighbors, including Germany and the Czech Republic, are still insufficient. How can they be expanded?
By midyear we will know the results of talks that we are holding with a German power distribution system operator whose networks are close to our system. An extension of cross-border links is particularly beneficial if you consider the differences in the prices of energy between Poland and its neighbors and the growing demand for energy in Poland.

What's more, the European Union welcomes such projects as it supports the development of a European power transmission network and a competitive common market. However, of key importance to the success of this project is the position of PSE-Operator SA, the transmission system operator and a company responsible for the national power system. We are talking about this to make sure our project gets off the ground.

Remigiusz Nowakowski, aged 32, holds a master's degree in economics from the Wrocław University of Economics and a master's degree in law from the University of Wrocław. He has completed a postgraduate course in real estate valuation and management at the Wrocław University of Technology. Earlier, he was chairman of the board and co-owner of investment advisory company Inercon. He is a member of the Polish Hunting Association. Married with a four-and-a half-year-old son.
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