This year, the amount will rise to as much as PLN 36 billion. These substantial funds are largely allocated towards an effective energy transition, including the development of renewable energy and zero-emission nuclear technology. This will enable us to build long-term energy security for Poland.
We made further progress on our Baltic Power project. The offshore wind farms that will be developed as part of this undertaking have the potential to ultimately power millions of Polish households. Although the project is scheduled for completion in 2026, it is already driving further investments. A strategic decision was made to build an offshore installation terminal for offshore wind farms in Poland, the first such installation on Poland’s territorial sea. The terminal will be located in the Port of Świnoujście and will be one of the most advanced facilities of this kind in Europe. The joint venture between the ORLEN Group and Northland Power will use 76 state-of-the-art 15 MW turbines from Vestas, whose components will be manufactured at the supplier’s new plant in Szczecin. The turbine manufacturing plant, to be manned by a staff of 700, is scheduled for completion in 2024, while the ORLEN Group’s installation terminal at the Port of Świnoujście will commence operations in 2025.
At the end of 2022, we also completed a project to construct one of Poland’s largest solar PV farms, located near Wielbark, in the Warmian-Masurian voivodeship. This 62 MW facility will generate clean energy sufficient to power more than 30 thousand households. After the expansion by another 8 MW, which is planned by the end of this year, the number will increase to 35 thousand households. At the same time, work is under way to build another solar farm, with a capacity of 65 MW, in Przykona in the Greater Poland voivodeship. with the construction scheduled to start in the middle of this year.
In line with our Hydrogen Strategy announced in 2022, we launched in Trzebinia the first of the planned hydrogen hubs, based on which we will be rolling out a distribution network for this green fuel, and we also built our first hydrogen refuelling stations. We can see the potential of hydrogen especially in public transport, so we engaged with many local governments and municipal transport companies that will be able to receive our hydrogen supplies. In addition, we launched the Mazovian Hydrogen Valley as a place where new hydrogen technologies will be developed and implemented and where the sector’s future personnel will be trained.
We are also investing in biofuels. Besides biogas and biomethane, we are developing the production of second generation bio additives, which will not compete with food production. A project will be carried out at the ORLEN Group to build a facility for producing bioethanol from cereal straw. The green project, located at ORLEN Południe’s Jedlicze plant, will be the first such facility in Poland and the second one in Europe, and its annual capacity will reach 25 thousand tonnes of bioethanol. In parallel, a pilot plant is being built in Głąbowo to enable production of over 7 mcm of biomethane annually, which will then be converted into fuel, bioLNG. Such amount of green gas fuel will translate into a tangible reduction of carbon dioxide emissions from heavy goods transport.
As Central Europe’s largest company, we are well placed to face up to major business challenges. The energy transition requires bold and swift action, but moving down that path we must also keep in mind the need to ensure continuous energy security. The merger with LOTOS strengthened our ties with Saudi Aramco, the world’s largest oil producer and global leader of the petrochemical industry. One effect of this cooperation is an oil supply contract we have signed, covering as much as 45% of the ORLEN Group’s overall demand. We also successfully completed the process of diversifying our gas supply sources, which had been under way for over seven years. We focused on attracting reliable trade partners to reshape the mix of energy supply sources for Poland, while ensuring the highest possible level of energy and fuel security for the entire region. These measures, consistently pursued amid the energy crisis, have delivered the desired outcome, as – for the first time ever – the entire volume of oil and gas consumed in Poland comes from non-Russian sources. LNG and pipeline supplies from new directions (Norway and Lithuania) launched last year already account for more than a half of our gas imports. In 2022, a quarter of the imported volume arrived in liquefied form from the United States.
Last year, we also invested in the expansion and enhancement of our Płock facility. This involved constructing a visbreaking unit, a vegetable oil hydrogenation (HVO) unit, and increasing the capacity of the olefins plant. At the same time, we are expanding fertilizer production capacity at ANWIL in Włocławek and building a hydrocracking unit in Lithuania. We are simultaneously upgrading existing assets and expanding our customer base within the Energa Group, while also constructing gas-fired combined heat and power plants in Ostrołęka and Grudziądz. Our investment efforts also extend to expanding our retail segment, building the ORLEN brand in international markets, and increasing the availability of alternative refuelling options.
The crisis that has swept through the European energy market, exacerbated by the war in Ukraine, has underscored the need to further diversify not only the supply directions of energy feedstocks and fuels, but also the energy mix itself. Making Poland independent of fossil fuels has become a priority. Therefore, in addition to our investments in offshore and onshore wind power and solar photovoltaic projects, we will develop generation capacities based on the innovative technology of small modular reactors (SMR). At the beginning of last year, having secured clearance from the Polish anti-trust authority, we established ORLEN Synthos Green Energy, The company that will be responsible for developing and commercialising in Poland one of the most efficient, cost effective and safe power generation technologies. We intend to build at least one small nuclear unit in Poland by the end of this decade. We are on the right track. We have already reviewed dozens of potential locations, from which, at the current stage, we have selected seven optimal ones nearby: Ostrołęka, Włocławek, Stawy Monowskie, Dąbrowa Górnicza, Nowa Huta, SEZ Tarnobrzeg - Stalowa Wola and Warsaw. It is at these sites that further geological studies will be conducted. Once their potential is confirmed, the priority will be to open a dialogue with the communities in each of the locations. Only then will decisions be made about the implementation of a safe and environmentally friendly project.
Ahead of us is another year, bringing with it new challenges and plans, of which we will keep you informed. I am positive that the hard work and commitment of all our employees, for which I am very grateful, will help us achieve new important goals. And this will translate into further development of the ORLEN Group for the benefit of our shareholders, partners, customers and the entire staff of the combined company.
Daniel Obajtek
President of the Management Board, Chief Executive Officer
