Polish state-owned oil and gas major Polskie Górnictwo Naftowe i Gazownictwo SA (PGNiG) announced on June 9, 2020, that it plans to present an updated strategy for the entire PGNiG Group. One new strategic initiative will be to set up a dedicated renewable energy source (RES) business segment on which the Group may invest up to PLN 4 billion (≈ EUR 892.6 million) on its creation and development to become a leading renewable energy producer in Poland.
PGNiG is the leader in the Polish natural gas market operating in exploration for and production of natural gas and crude oil. Through its key companies, PGNiG is also active in the area of import, storage, sale, and distribution of gas and liquid fuels, as well as heat and electricity generation.
Over the recent weeks, we have been indicating how we intend to implement the announced shift towards green energy, presenting our plans related to the production and use of hydrogen and biomethane. Today, we are revealing our plans even more by showing how important a place will be assigned to renewable energy sources in the Group’s updated strategy. Entering a new business line, namely RES, will allow us not only to build the value of the company, to increase and stabilise its revenue but also to engage more intensively in the transformation towards a low-carbon and zero-emission economy, said Jerzy Kwieciński, President of the PGNiG Management Board.
Over the next few years, beyond 2022, PGNiG intends to spend even as much as PLN 4 billion (≈ EUR 892.6 million) bn on building the RES segment. Ultimately, this will help the Group achieve a generating capacity of up to 900 MW, making PGNiG one of the leading producers of energy from renewable sources in Poland.
In building and developing the RES segment, we are most interested in wind power and photovoltaic projects. These technologies offer the greatest investment potential. Considering our investment capabilities, the most attractive projects for us are those already existing or at a very advanced stage of development. There are enough of such projects on the market. At the same time we also intend to build our own development competencies in this area by developing, for instance, photovoltaic projects on the sites and areas owned by the PGNiG Group, emphasized Arkadiusz Sekściński, Vice President of the PGNiG Management Board, Development.
PGNiG believes that RES will help stabilise its financial performance. Renewable energy sources are not sensitive to movements in hydrocarbon prices, which have a strong effect on such segments of the PGNiG Group’s business as Exploration and Production, and Trade and Storage.
Today we are sending a signal to investors to show what we want to do to make our business model even more balanced and resilient to market headwinds. We will probe the RES market and look for investments that will provide us with an adequate rate of return as well as stable cash flow. To this end, we plan to spend even as much as PLN 4 billion on the best projects. Within this cap, we will launch new initiatives, but also buy existing projects from the market, commented Przemysław Wacławski, Vice President of the PGNiG Management Board, Finance.
PGNiG is already performing investment simulations and will seek to establish cooperation with potential partners. First decisions regarding investment in RES may be made even before the strategy is updated.