Fortum Oyj (FUM1V) may almost triple its investment in Poland by building new power plants, and spending could rise further if the Nordic region’s second-largest utility buys heat and electricity assets in Warsaw.
Fortum will decide by the end of the year whether to build a 400-megawatt gas-fired heat and power plant in the southwestern city of Wroclaw, Mikael Lemstrom, head of the company’s Polish unit, said in an interview yesterday. The Wroclaw facility and one of as much as 200 megawatts in Zabrze would cost Fortum more than 700 million euros ($970 million).
Fortum has spent more than 1 billion zloty ($349 million) in Poland so far, and is joining utilities including PGE SA, Tauron Polska Energia SA (TPE) and PKN Orlen SA, which are planning gas-fired power units of at least 3,000 megawatts, or about 10 percent of Poland’s total capacity, as the country that relies on coal for about 90 percent of electricity generation seeks to cut carbon-dioxide emissions.
Fortum is in talks with four potential gas suppliers for the Wroclaw plant, including Polskie Gornictwo Naftowe i Gazownictwo SA (PGN), Poland’s dominant supplier of the fuel. The Helsinki-based utility could import the plant’s 600 million cubic meters of the fuel a year from Germany.
Fortum may also bid for SPEC SA, the biggest municipal heat distribution network in the European Union, which the city of Warsaw is selling, while Vattenfall AB, Fortum’s bigger rival in the Nordic region, will probably start selling the heat and power plants that are SPEC’s main suppliers.
“The sales of SPEC and Vattenfall’s Warsaw asset go more or less together, but I still wouldn’t take it for granted that the same investor will buy both,” Lemstrom said. “I also can’t rule out us bidding only for SPEC, but investing solely in distribution is not really our field,” he added.
Initial bids for SPEC are due by March 28. Vattenfall, which has started evaluating its Polish assets, hasn’t begun the official sale process yet.
Fortum, which is looking at SPEC with “great interest,” has yet to decide whether to place a bid, Lemstrom said.
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