Current reports

Current reports

Current reports

Current report no. 32/2016

Construction of CCGT in Konin Power Plant

Legal basis:

Article 17 paragraph 1 MAR – inside information

Contents of the report:

Zespół Elektrowni Pątnów-Adamów-Konin SA (“the Company") in hereby report informs that the decision on the investment project on the construction of CCGT with a capacity of 120 MWe and 90 MWt and an additional peak boiler with a capacity of 40 MWt in Konin Power Plant ("the Project") will not be taken this year.

Due to the current external conditions affecting the economic efficiency of the Project and, above all, uncertainty about the shape of the support system for gas cogeneration after 2018, and also because of the relationship between gas prices, prices of CO2 allowances and electricity prices, the Management Board decided that the decision to implement the Project in the current circumstances would involve too many risks, which could adversely affect achieved financial results in the future, the value of the Company and thus the interests of the shareholders.

Construction of CCGT in Konin Power Plant is an investment reported to the National Investment Plan ("KPI"). The implementation of the Project in the specified range and time was associated with the allocation of free CO2 allowances in the amount of about 6.3 million tons. In the current situation of the absence of a decision to launch the Project by the end of the year, the Company assumes that it will not be able to get free CO2 allowances arising from the implementation of the Project in the context of the current KPI.

Regardless of shifting the decision regarding the construction of CCGT in Konin power plant, the company intends to remain a supplier of heat for the town of Konin after 2020. To this end, the various concepts are being considered to achieve that purpose. Among other things, there are ongoing study works on the production of energy and heat in cogeneration using currently functioning biomass unit in Konin Power Plant, what was reported by the company in the last half-year interim report. Decisions in this area will be taken based on the results of the economic evaluation of the considered concept and in cooperation with the recipient of heat.

Construction of CCGT in Konin Power Plant is still part of the investment plan of the Company, however, if it could be implemented, certain conditions are necessary which lend credence a positive impact of the Project on the value of the Company.

Signatures of persons representing the company:

Adam Kłapszta – Vice President of the Management Board acting President of the Management Board

Adrian Kaźmierczak – Vice President of the Management Board