Is Poland’s €1.8bn grid financing win a lighthouse for the EU?

In this week’s Power Playbook: Poland’s Energa has announced a whopping €1.8 billion ($1.9 billion) in financing for the distribution grid. As Europe readies its Clean Industrial Deal and multiannual financial framework, is the country an example to keep an eye on?

A substantial announcement this Wednesday came from Poland.

Energa Operator, a member of the ORLEN Group, secured over PLN7,5 billion (€1.8 billion) from the country’s National Recovery Plan to fund the largest power grid modernisation and digitalisation initiative in the company’s history, covering northern and central Poland.

The funding is huge, for two reasons.

Firstly, its scope. The project, which will extend through to 2035, will see upgrades to and construction of a total of 21,000km of power lines. A key component of this initiative is the planned integration of 9GW of renewable energy sources, characterised by low variable production costs, along with energy storage facilities.

Secondly, the financing comes a week prior to the EU’s release of its Clean Industrial Deal and months ahead of the next multiannual financial framework.

President Ursula von der Leyen gave some insights on the Industrial Deal while speaking at the World Economic Forum in January:

“Not only must we continue to diversify our energy supplies, and expand clean sources of generation from renewables and, in some countries, also from nuclear. We will have to invest in next-generation clean energy technologies…We must also mobilise more private capital to modernise our electricity grids and storage infrastructure.

“We must remove any remaining barriers to our Energy Union. And we must better connect our clean and low-carbon energy systems. All of this will be part of a new plan that we will present in February.”

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The Polish deal

Energa’s financing, which comes courtesy Polish development bank BGK and willl be disbursed under the EU’s recovery facility, will see the construction of over 11,000 kilometres of new overhead power lines, 7,000 kilometres of cable lines, and the modernisation of nearly 10,000 kilometres of existing lines.

Approximately 350,000 new electricity consumers and 1,600 public electric vehicle charging stations are also set to be connected to the grid.

Additionally, the project includes the installation of approximately 1,000 advanced transformers and voltage control components to enhance the network’s capacity for distributing energy from renewable sources. The smart distribution networks will also facilitate the expansion of electrified district heating systems.

The network expansion and modernisation will increase the investment appeal of economic zones in Pruszcz Gdański, Słupsk and Koszalin, preparing these areas to accommodate energy-intensive industries. It will also support the growth of seaports, including gas and fuel terminals, while advancing e-mobility and the comprehensive electrification of public transport.

At this stage there is no arguing the criticality of grid investments, both transmission and distribution, for delivering net zero. Energa’s financing in this regard is no small feat, especially when we consider the significantly complex challenge that arises as companies look to tackle the grid conundrum.

Besides Energa, the EIB is also funnelling money into developing the Polish grid.

The EIB in early February announced €791 million ($830.1 million), with a partial focus on strengthening electricity distribution, alongside hydrogen production for transport and improved flood protection.

The Bank’s financing follows a November 2024 loan of €206.9 million ($219. 5 million at the time), also to Energa, to bolster the country’s power grid and bring more renewables online, strengthening and expanding the distribution grid.

And just yesterday, we covered a story from Polish DSO Enea Operator, who has selected four partners to supply a total of almost 3 million smart meters by 2030.

Marek Szymankiewicz, president of Enea Operator, said in a statement that the purchase of the meters is not only aimed at meeting its legal obligation under the Energy Law but also that the data obtained from the meters will contribute to the optimal use of funds from the investment plan for the expansion and modernisation of the network.

The Polish financing is immensely promising and comes at a time where grids are not only key for the energy transition but also for Europe’s energy competitiveness, as was highlighted in the Draghi report.

And as we wait on European policy announcements this year, perhaps we can look to Poland as an example, a country that is able to tap into existing policy and funding frameworks to direct the flow of billions of euros into distribution alone.

But what do you think?

Will the Clean Industrial Deal and multiannual financial framework have an impact on invesments into grids, spurring other European countries to follow Poland’s lead?

Reach out and let me know.

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

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