Market consultations regarding the construction of the Żarnowiec battery energy storage

In February, it came to light that PGE had initiated market consultations aimed at deliberating their intentions to establish a battery energy storage facility. The proposed location for this project is Elektrownia Szczytowo-Pompowa Żarnowiec. This endeavor is regarded as one of the most extensive undertakings of its nature across Europe.

Polska Grupa Energetyczna (PGE) has officially conveyed its engagement in preliminary market consultations through the PAP press agency. The discussions revolve around the prospective establishment of a Battery Energy Storage (BMEE) facility at the Żarnowiec Pumped Storage Power Plant.

The size and capabilities of the new facility

The forthcoming storage facility is projected to possess a minimum capacity of 200 MW. However, indications suggest that its capacity could very well surpass 820 MWh, aligning with the proposed plans.

Investment time frame

As shared by the PAP press agency, this undertaking stands as one of the most substantial projects of its kind within Europe. We previously covered the intentions for its construction in our July 2022 article titled “The largest battery energy storage in Europe will be built in Poland.” Presently, PGE envisions that this investment will reach completion over a span of four years, spanning from 2024 to 2027.

This timeline encompasses various phases, including the preparation of design documentation, securing the necessary building permits for distinct components of the project, and ultimately the completion and commencement of the investment by the conclusion of this period. The strategy involves contractor selection and procuring a long-term contract within the capacity market. If PGE secures a capacity contract in 2023, the initiation of capacity commitment fulfillment is slated for 2028.

PGE

Objectives of the construction of the Żarnowiec energy storage

As outlined by PGE, the establishment of the substantial battery energy storage facility, BMEE Żarnowiec, is anticipated to facilitate the following:

• Provision of Regulatory Services: The facility is poised to offer essential regulatory services to the Transmission Network Operator, contributing to the stability and efficient operation of the grid.
• Balancing Wind Farms: The storage facility will play a pivotal role in balancing local wind farms, as well as forthcoming PGE wind farms in the Baltic Sea. This capability ensures a consistent and reliable power supply.
• Income Generation: The project is expected to yield income through trading on the capacity market and capitalizing on price arbitrage. These avenues for revenue further enhance the project’s economic viability and sustainability.

The projected installation also anticipates potential revenue streams sourced from the capacity market and through price arbitrage.

PGE

Indeed, the company’s strategy entails capitalizing on the variance between the energy procurement cost from the grid and the rate at which the energy is subsequently fed back. This approach hinges on the premise of consuming energy during periods of lowest prices and supplying energy back to the grid during peak demand times. This strategy aims to secure profitability by aligning with market dynamics.

Purchasing procedure

Simultaneously, it’s important to note that the consultation phase precedes the actual procurement process. The objective of this consultation is to pinpoint the most optimal approaches for executing the investment and to formulate the requisite procurement documentation. Undertaking these steps is geared towards fostering a highly competitive nature for the subsequent tender process.

At the culmination of the procurement process, bids will be submitted as part of the selection of the contractor, following the guidelines of the Public Procurement Law (PPL). The projected timeframe for bid submission is anticipated to be during the fourth quarter of this year.

PGE

It’s accurate that the company has indicated that a specific date for commencing the procurement process has not been determined yet. However:

However, the outlined draft’s framework is designed in a manner that facilitates bid evaluation prior to the upcoming capacity market auction within the ongoing year. The contractor selection process is tentatively projected for the initial quarter of 2024.

PGE

We do not know the value of the investment yet

The company has affirmed that the precise value of the investment remains undetermined at this point. This value will be established subsequent to the reception and evaluation of the bids.

Energy storage as a source of stable income

Furthermore, Polska Grupa Energetyczna underscored its belief in energy storage as a prospective avenue for securing stable revenues and emphasized its role as a pivotal solution within the broader context of the energy transformation process:

Within the PGE Group, energy storage is acknowledged as an upcoming means of ensuring consistent earnings and a central component of the energy transformation journey. As the proportion of renewable energy sources in electricity generation grows, there arises a greater necessity within the power system for energy storage.

PGE

Sources:

PGE conducts market consultations on the construction of a battery energy storage in Żarnowiec, www.pap.pl

The largest electricity producer is investigating the possibility of building a large energy storage facility,energy.rp.pl

PGE speeds up activities regarding the Battery Electricity Storage in Żarnowiec, Politykabezpieczenstwa.pl

PGE conducts market consultations on the construction of a battery energy storage facility in Żarnowiec, ZieloneGospodarka.pl

A gigantic energy storage facility will be built in Żarnowiec. PGE starts market consultations,

Market consultations for the delivery of a large-scale energy storage facility in Żarnowiec, ecieplo.pl

polskiradio24.pl

PGE invites contractors to participate in preliminary market consultations for the delivery of large-scale energy storage Żarnowiec, www.cire.pl