Poland’s most profitable coal producer, Lubelski Węgiel Bogdanka SA, announced a significant write-off of $305 million from the value of its assets due to the increasing influence of wind and solar power in the energy market. The company, which is under the control of state-run utility Enea SA, attributed the 1.17 billion zloty ($305 million) provision to “dynamic changes” in the domestic coal market, highlighting a “clear trend” toward growing renewable energy capacity.
Last year, Bogdanka’s profit surged to a record 687 million zloty due to high coal prices. However, analysts predict a significant decrease in profit for 2024, even before considering the recent write-off. Despite Poland’s new government promoting clean energy, an official energy policy with specific targets for the upcoming decades has yet to be published. Nevertheless, coal’s share in the country’s electricity mix has already dropped to 66% last year, down from over 70% the previous year, as investments in photovoltaic and wind energy increase.
The pressure on coal is expected to intensify with the introduction of the first offshore wind turbines and the completion of gas-fired power units in the coming years. Additionally, Poland plans to inaugurate its first nuclear power plant next decade, aligning with the European Union’s climate neutrality goal by mid-century. Bogdanka, listed on the Warsaw Stock Exchange, plans to revise its strategy by the end of 2024 in response to these changes. The company’s shares have dropped 27% this year, resulting in a market valuation of 846 million zloty, while the WIG20 Index has risen by 1.4%during the same period.
