Polish miner gets renewable reality check in record write-off

Poland’s most profitable coal producer Lubelski Wegiel Bogdanka SA said it was forced to write off $305 million from the value of its assets as wind and solar power are pushing the dirty fuel out of the market.

Bogdanka, controlled by state-run utility Enea SA, said the 1.17 billion zloty ($305 million) provision comes amid “dynamic changes” on the domestic coal market with a “clear trend” of rising renewable capacity, according to a statement released on Tuesday. The miner’s profit, which last year almost tripled to a record of 687 million zloty on high coal prices, is set to shrink considerably in 2024, even before the write-off, according to analyst estimates.

Poland’s new government has been touting clean power, but is yet to publish an official energy policy setting exact targets for this and next decade. Still, the share of coal-based electricity output in the country’s mix has already declined to about 66% last year from more than 70% a year earlier as electricity producers invest heavily in photovoltaic and wind farms.

The squeeze for coal is set to increase in coming years as first offshore wind turbines come online, while utilities complete building gas-fired units. Next decade, the country also plans to start its first nuclear power plant as it’s aiming to meet the European Union’s climate neutrality goal by mid-century.

Warsaw-listed Bogdanka said it plans to adjust its strategy to new conditions by the end of 2024. The shares have plummeted 27% so far this year, giving it a market valuation of 846 million zloty. The WIG20 Index rose 1.4% in the same period.

(By Maciej Martewicz)