(Bloomberg) -- Poland’s power grid operator is considering turning to the debt market for the first time to help finance a 64 billion zloty ($16 billion) investment plan over the next 10 years.
The coal-reliant country faces a significant spending to adjust its grid to quickly expanding renewable sources, changing demand patterns and external threats in light of the war in neighboring Ukraine.
“With debt and European Union funding, we could finance more than two-thirds of the investment plan, which assumes spending 64 billion zloty by 2034, including significant amounts for security,” Grzegorz Onichimowski, the head of PSE, told Bloomberg in an interview.
PSE may issue bonds or take a loan worth “a few hundred million zloty rather than billions” at the end of 2025. The plan has been moved forward as a recent surge in prices on the nation’s balancing market — used to secure additional supplies during peak periods — potentially poses a risk to the operator’s financial standing.
Poland recently introduced measures on the market aimed at encouraging power suppliers to boost flexibility, as well as to adjust production and consumption to the grid’s needs.
Ultimately, the balancing market is where Polish electricity producers can profit from being available at short notice. But for now, few of them are ready and interested in participating, which sends the prices up.
If this lasts too long, the operator will have to take “some steps to limit the price increase,” according to Onichimowski.
Ukraine Aid
The state-run operator invests heavily in cyber security, while physical security of the energy infrastructure has not involved increased spending for now, Onichimowski said. However, PSE is already in touch with its Ukrainian counterpart to benefit from their experience, including defending infrastructure against drones.
Polish Prime Minister Donald Tusk said earlier this month that he’s discussing a plan that would help Ukraine bolster its electricity security after a barrage of Russian attacks by sending coal-based power using existing connections.
PSE will be involved in these efforts, according to Onichimowski, who also called on Europe to address the issue of costs and ways of providing war-ravaged Ukraine with energy and heat.
“But this cannot be a regular market solution - we are outside the realm of standard methods,” he said.
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