LONDON, August 02 — Carbon Tracker are pleased to announce a legal victory by Enea shareholders in the Polish courts yesterday, over planned investment in the uneconomic Ostroleka C coal fired power unit – said to be the last coal unit ever to be built in Poland.
The Polish court ruled in Client Earth’s favour and declared the general meeting resolution authorising construction of Ostroleka C legally invalid. According to the press statement from law firm Client Earth – the future of the coal development now ‘hangs in the balance’ – pending possible legal appeal.
Peter Barnett, a ClientEarth lawyer, welcomed the ruling and urged Enea and Energa to drop the project: “This is an excellent result for Enea’s shareholders and for the climate. The plant is a stranded asset in the making, facing clear and well-documented financial risks. Companies and their directors are legally responsible for managing climate-related risks and face potential liability if they fail to do so. Enea and Energa should lay this project to rest before it incurs any further costs to the companies and their shareholders.”
In April 2018, Carbon Tracker published a report, Burning More Money Than Coal, for Client Earth’s forthcoming shareholder challenge of Ostroleka C.
Carbon Tracker’s financial model found Ostrołęka C would be permanently unprofitable without out-of-market revenues in the form of capacity market payments. Assuming no capacity market payments, if Ostrołęka C were built and not closed prematurely it could generate a negative net-present-value (NPV) of €1.7b over its lifetime.
Matthew Gray, senior utilities & power analyst and author of the report said:
“This is a huge win for Enea’s shareholders. Ostrołęka C was a financial disaster in the making, which would have destroyed shareholder value unnecessarily. Governments and policymakers who are using listed companies to promote unviable coal projects should take note.”
Enea shareholders received the decision of the court positively. Enea’s shares were more than 4% higher on the morning of the announcement. Such a reaction is most likely due to fears around the profitability of the project. Per Burning More Money Than Coal, even with subsidies, the project will be highly unprofitable.
To arrange interviews with Matthew Gray and the Power and Utilities team, please contact:
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About Carbon Tracker
The Carbon Tracker Initiative is a not-for-profit financial think tank that seeks to promote a climate-secure global energy market by aligning capital markets with climate reality. Our research to date on the carbon bubble unburnable carbon and stranded assets has begun a new debate on how to align the financial system with the energy transition to a low carbon future. carbontransfer.wpengine.com