Abandoned coal plant cost Poland 1.3bn zloty amid “serious irregularities”, finds state auditor

A government project to build what was meant to be Poland’s last new coal power station, but which was abandoned last year, cost a total of 1.5 billion zloty (€327 million). The vast majority, 1.3 billion zloty, was irretrievably lost, according to the state auditor, which says it will report “serious irregularities” in the spending to prosecutors.

The money was spent on the design, preparatory work, almost two years of construction and finally demolition of the coal-fired plant, known as Ostrolęka C, as well as on salaries for managers of the project, found the Supreme Audit Office (NIK).

The main reason for the project’s failure, according to NIK, was the lack of assured sources of financing, with almost 4.2 billion zloty lacking. Before the investment started, independent experts had warned that it would be unprofitable

Witness testimonies show that the then energy minister, Krzysztof Tchórzewski, was aware that there were insufficient funds to complete construction, found NIK. However, the energy firms behind the power plant, Energa and Enea, indicated they were pressured by the state treasury – their largest shareholder – to finish the project.

In testimony published by NIK, one board member of Energa said that Ostrołęka C “was needed from the point of view of calming public sentiment in Silesia”, referring to Poland’s southern coal heartlands, there the influential mining industry is opposed to a rapid transition away from coal.

“We found serious irregularities,” NIK president Marian Banaś told TVN24, adding that the authority will notify prosecutors regarding its findings. Banaś, previously a member of the current government, has as head of NIK become one of its most powerful opponents.

One opposition MP, Adam Szłapka of Modern (Nowoczesna), has already notified prosecutors of what he suspects are crimes relating to the project by Tchórzewski, Prime Minister Mateusz Morawiecki and state assets minister Jacek Sasin, reports financial news service Money.pl

“Ostrołęka is a monument to [the ruling] PiS [party’s] incompetence, greed and cronyism,” said another opposition MP, Kamila Gasiuk-Pihowicz of Civic Platform (PO), which is also intending to notify prosecutors.

Tchórzewski, however, has pushed back against the accusations, saying that all his decisions were made in accordance with the law. “I tried to do everything to ensure Poland’s energy security,” he told TVN24. “If I was still the [energy] minister, I am convinced that this power plant would be built.”

After abandoning the coal plant, Energa instead began construction of a gas-fired power station at the same site. The firm announced on Thursday that its analysis shows the new investment will still be profitable, even after taking into account the costs of the coal project.

“The continuation of the project in gas technology is carried out with full investment financing,” the company said in the statement. The plant is expected to start supplying power in 2026.

Poland continues to generate around 70% of its electricity from coal, by far the highest proportion in the European Union. While the current national-conservative Law and Justice (PiS) government was initially supportive of coal, it has in recent years adopted more ambitious targets to move away from the fossil fuel.

Main photo credit: Max Zieliński / Greenpeace (under CC BY-ND 2.0)

Alicja Ptak

Alicja Ptak is senior editor at Notes from Poland and a multimedia journalist. She previously worked for Reuters.