- Poland | 8 September 2019
ENGIE Zielona Energia supplies energy from both conventional and renewable sources. How do they compare in terms of volumes?
The predominant part of our energy comes from renewable energy sources (RES), but because we also operate on the wholesale market, we source and balance our positions on the Polish Power Exchange, OTC, and Balancing Market, so we have to assume that part of it comes from traditional energy sources. Based on the analysis we do year by year, the share of RES in our overall mix has increased to nearly 80%.
Is this something you are doing from a proactive angle or because the customers are demanding it?
The answer is both. We are proactive and determined to implement the strategy set forth by the Group, and orient the business towards zero or low emission solutions. In fact, ENGIE used to operate in Poland with a much bigger energy portfolio, including coal and biomass-fired power plants in Połaniec. Pursuing this new strategy, the Group divested the power plant in 2017, which was combined with the carve-out of all activities oriented on renewables, sales, and trading (these were onboarded in ENGIE Zielona Energia). The outcome is that big energy consumers, especially international ones, are in the front row looking for ways to demonstrate their care for the climate. This approach step by step influences local businesses as well, a transformation that we at ENGIE see and are happy to facilitate.
Consumer attitude is key, but prices still carry significant weight in their choices. How does renewable energy fare from this point of view?
There are two perspectives we can consider. From a short-term angle, it is true that customers are looking at final costs, and only some clients are willing to pay more for green electricity. Surely we did not reach a critical mass yet, but we do receive more and more inquiries about this option. Just last year, ENGIE has developed a Virtual Power Plant in Australia. Can you briefly introduce the concept and explain whether similar plans are in sight for Poland?
The concept of the classical Virtual Power Plant is a set of numerous, decentralized renewable units and controllable consumers which are interconnected through smart solutions. Combined with appropriate market mechanisms, these enable the operator to proactively manage the system.
The portfolio that we are building here has many elements which are similar to a Virtual Power Plant, however, given the market design in Poland, we are not yet able to put it in place in a full-fledged manner. The Polish TSOs has already initiated the discussion with market stakeholders about serious changes in the model of the market, whereby not only big centralized dispatchers actively participate in the balancing market but also smaller, decentralized renewable producers. This is certainly the right direction in its substance.
When could this become a reality in Poland?
According to the agenda shared by PSE, the new model may be implemented at the end of 2020. The scope of the changes is so deep and broad, though, that I’m afraid one year is a bit too short. Realistically, changes of such importance require more time. Technology trends like storage will also make a contribution on this front.
Looking at the coming two or three years, what objectives are you pursuing with priority?
For wind, we want to protect the value of existing assets and be ready to absorb interesting projects and opportunities to develop them further. We also want to expand the PV business, both utility-scale and rooftop PVs. Here, we are open to cooperation with external stakeholders, like developers, banks, or financial institutions who want to invest in this type of business with big potential.