The transition of the Polish power sector is speeding up despite the difficult regulatory and business environment, writes Filip Grzegorczyk, CEO of TAURON Polska Energia.
Openness to innovations that improve the operating activities’ activeness in new business areas, investments that modernize and diversify the energy mix, and the focus on customer relations are the measures that substantially change the functioning of the Polish power sector.
The innovation ecosystem
For the TAURON Group, the last two years were the time of development of the innovation ecosystem that today encompasses 40 R&D projects and extensive collaboration with the business environment in an “open innovation” model.
The basic assumption for our innovation ecosystem is to search for the solutions to growth problems that we have defined in our Strategic Research Agenda – the TAURON innovation roadmap. The open issue, however, is how we shall get to a specific solution. We consider internal R&D projects and collaboration with start-ups, engaging in a global research programme of a renowned scientific institution. To us, it is important whether the developed technology increases the effectiveness of our operation, and if it can be integrated with our business with profit.
Today we are running over 40 R&D projects – from hard coal mining, through energy production and distribution, up to sales and customer related services. The projects are at various stages of progress; some of them are already in a pilot phase as we assess their business potential and technological efficiency with the use of our infrastructure.
In September we commissioned an installation designed to convert carbon dioxide captured from the generating units into synthetic natural gas (SNG) for running vehicles. Methane is produced in a reaction between CO2 and hydrogen coming from water electrolysis. This process may be powered with the surplus of cheap energy produced, for example, from renewable sources at demand off-peak (of lower electricity demand, e.g. at night). So this technology is not only a prospective solution for CO2 utilisation, but also a means for storing electricity coming from uncontrollable energy sources, such as wind farms or photovoltaic panels.
Recently, we have enhanced our innovation ecosystem with a financial instrument by establishing the CVC fund. So we may offer the start-ups with good ideas a comprehensive collaboration – from participation in accelerator programmes, through competency support and providing infrastructure for technology scaling and testing, up to financial seed support of up to PLN 3 million, and broader support at the growth stage of up to PLN 32 million.
Energy storage – the game changer of the power sector
We also invite the technology companies and renowned scientific institutes to collaborate. A good example of the synergy of our initiatives is the development of storage technologies. Thanks to the collaboration with the American Electric Power Research Institute, we are participating in the global research programme on the energy storage, while at the same time we are collaborating with a start-up that is developing promising solutions in this area. We are also building an energy battery that is located in the vicinity of our wind farm so as to gain practical proof of the benefits of storing electricity in innovative energy batteries using electrochemical cells. Moreover, these technologies are also a major focus of the CVC fund mentioned above.
IoT in Smart Cities
We also get involved in business areas that are new to us, and open up for collaboration with the biggest technology giants. In Wrocław, together with Ericsson, we will be developing services for the city using the Internet of Things. The implementation will involve the development of new services based on the urban, municipal, power and telecommunication infrastructures. It will be based on the use of a network of sensors providing the information facilitating the management of various agglomeration functions.
Carefully selected technical solutions will facilitate safe and effective management of street lighting or parking spaces, and improve the comfort of city life. An important part of the project will also be the use of state-of-the-art communications technologies, and collecting, processing and analysing the stocks of big data coming from the installed sensors and the smart infrastructure.
Diversifying the energy mix
TAURON Group is not planning to build large scale coal fired power plants anymore, and the 910 MW unit in Jaworzno is the last investment of the type. Please bear in mind that the new generating unit that we will commission in Q4 2019 will be operating with the highest efficiency in its class in Europe and will reduce the emissions by 91%, i.e. emissions of nitrogen oxides and sulphur by 82% and 95% respectively. Moreover, as it follows the idea of a circular economy, it will not require any storage of post–combustion waste – ash gypsum or coke – as these will be used by, among others, cement and construction industries.
At present, TAURON is working on new investments in new generating capacities, including renewables, with a total capacity of around 700 MW. The condition for their execution is ensuring appropriate profitability and a favourable and stable regulatory support system.
At the beginning of October, we have commenced the negotiations to purchase five wind farms with a total capacity of around 200 MW. We would like to finalise this transaction at the turn of the year already. Besides the wind generators, we are currently considering five potential locations for photovoltaic farms in areas not used by the industry.
Already today, we are producing electricity in 34 hydroplants and four wind farms. In Q2 2018 we also connected nearly 2000 micro installations to the grid. This is a record number in Poland.
The contemporary market is very demanding and at the same time is getting less stable. Companies that, in a difficult market environment, are able to quickly identify and benefit from the market opportunities, and respond to ever-increasing customer requirements, will succeed. All the while, we must bear in mind that the power sector is a universal service that needs to be available to all, and must respond to the diversified needs of different customer groups.