PSEG Global to Build Environmentally "Clean" Coal-Fired CHP Plant in Poland

November 15, 1999

PSEG Global announced that through its majority shareholding in Elektrocieplownia Chorzow ELCHO Sp z o.o. (ELCHO) it plans to build a combined heat and power (CHP) plant of 220 MWe and 500MWt capacity utilizing circulating fluidized bed (CFB) technology in Poland. The new facility will replace one of the country’s longest established combined heat and power generating facilities which is owned and operated by Elektrownia Chorzow S.A., a state-owned company, (E.C. Chorzow) and located in the town of Chorzow in Upper Silesia.

PSEG Global will hold a 90% interest at financial closure in ELCHO with E.C. Chorzow and other local Polish companies holding the remaining interest. Total project cost is estimated at $320 million with financial closure expected by year-end 1999. The plant has a targeted commercial operation date of late 2002.

Polskie Sieci Elekroenergetyczne S.A. (PSE), the Polish Power Grid Company, has signed a long-term power purchase agreement with ELCHO and it is planned for all of the power to be delivered to Gornoslaski Zaklad Energetyczny (GZE), the local distribution system. Przedsiebiorstwo Energetyki Cieplnej (PEC), the district heating company serving the city of Katowice and its surrounding communities, has committed to purchase ELCHO’s overall 500 MW thermal capacity under a long-term agreement.

Nadwislanska Spolka Weglowa S.A. (NSW) executed a letter of intent with ELCHO to supply 1 million tons of local coal per year under a long-term supply agreement. With the use of the latest CFB technology, ELCHO can insure the utilization of this coal to an environmentally acceptable standard.

"Projects of this nature utilizing indigenous fuel, while meeting stringent environmental standards produce a positive effect on the community which reaches far beyond the simple boundaries of the power plant. The flow on effect of this development in terms of employment in the region of Silesia is exactly the type of benefit PSEG Global aims to achieve as a corporate member of the community in Chorzow," said Gareth Mann, Managing Director at PSEG Global in London.

"PSEG Global has several projects currently operating with circulating fluidized bed technology," said John Protasiewicz, Director, Project Development at PSEG Global in London. " CFB technology enables us to purchase locally available coal and meet stringent controls for SOx and Nox emissions. It is the most environmentally friendly technology for its capital cost."

"The project is of great importance to the city. It brings welcome changes, by introducing state-of-the-art ecology-friendly technology and by increasing competition among producers of electricity and heat. The city will also gain very needed new employment opportunities", said the Mayor of Chorzow Marek Kopel. Silesian Voivode, Marek Kempski, stated that "Modern ecological friendly technology, competitiveness, and new jobs is what our region needs most at a time of painful processes of industrial restructuring. I hope that this new investment project will bring benefits both to ELCHO and to Chorzow’s citizens, thus adding another welcomed dimension to the emerging new economic reality of the Silesian Voivodeship."

"The new project will replace power units which have been completely worn out. It offers the optimal solution, because the emission standards for sulfur and nitrogen compounds as set in the Environmental Protection Act, will be observed", said Irena Chrzanowska of the Ministry of Economy.

PSEG Global develops, owns and operates electric generation and distribution facilities in selected domestic and international markets. Global has ownership interests in 26 generation facilities in operation, construction or advanced development in Argentina, China, India, the U.S., Tunisia and Venezuela. In addition, PSEG Global owns interests in six distribution companies providing electricity to 2.7 million customers in Argentina, Brazil, Chile and Peru. The company has assets valued at $1.7 billion. The EAMS region (covering Europe, Africa, Middle East & India) is headquartered in London supported by offices in India, Italy, Tunisia and Oman. PSEG Global is a direct subsidiary of PSEG Energy Holdings and an indirect subsidiary of Public Service Enterprise Group.

Public Service Enterprise Group