Poland’s largest utility PGE may be interested in buying assets in Germany from Swedish energy group Vattenfall, Polish media reported last week. According to Gazeta Wyborcza, the Swedish firm plans to divide its business into two segments – in the Nordic countries and in continental Europe plus the UK, welcoming investors to the latter.
PGE is interested in lignite-fueled power plants
Vattenfall has been looking to jettison some of its European assets for some time. Its investments in the Netherlands have been losing money for years now, hampering its foreign expansion and eventually nudging the Swedish giant into offloading some of its assets.
Back in 2011 it sold its Polish electricity grid in Silesia, which was purchased by Tauron, while PGE acquired its heat and power plants in Warsaw.
Not so fast
According to sources quoted by the daily, PGE could be interested in Vattenfall’s lignite power plants close to the Polish border, in Jänschwalde (3,000 MW), Schwarze Pumpe (1,600 MW) and in Boxberg (1,900 MW). Poland has its own lignite resources close to the German power plants which would be useful and make such transactions profitable.
That scenario is questionable however, since the local community is vehemently against building any lignite mines there.
PGE’s management would also have a tough time explaining such investments. It resisted building a power plant in Opole, claiming it was unprofitable. This decision was later overturned by Prime Minister Donald Tusk. If PGE decides to acquire some of Vattenfall’s German assets, its critics will certainly question such a move, accusing the company of spending money abroad rather investing in the domestic market.
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