Poland: PGE cancels 500 MW pumped storage upgrade, Tauron lands financing for 1.5 GWh of battery storage projects

The planned modernization of Poland’s second largest pumped hydro storage facility, the 500 MW Porąbka‑Żar plant, has been put on hold after utility PGE Energia Odnawialna canceled the contract with the consortium led by GE Hydro France and its partner Mostostal Warszawa.

PGE’s withdrawal relates to the Agreement dated 22 July 2022 under which the consortium was to execute the modernization of the technological part of the Porąbka‑Żar plant. On 19 December 2025, PGE notified the contractor of its decision, citing project delays, inability to complete the work on time, and improper technological implementation, including design-execution errors in the technological layer.

The utility imposed contractual penalties of PLN 4.72 million ($1.3 million) for a 28-day delay in commissioning hydro unit No. 3 and PLN 105.33 million for withdrawal from the agreement due to contractor fault, with GE Hydro France indicated as the payer. PGE also requested the return of the unsettled advance payment of PLN 151.59 million.

The Porąbka‑Żar plant is a vital grid-balancing asset in southern Poland, second in size only to the 716 MW Żarnowiec Pumped Storage Power Plant in northern Poland. The facility helps stabilize the electrical grid by providing essential ancillary services. It operates with Międzybrodzkie Lake as the lower reservoir and an artificial upper reservoir built atop Żar Mountain.

Meanwhile, utility Tauron Group has advanced its energy storage ambitions by signing agreements with the National Fund for Environmental Protection and Water Management (NFOŚiGW) for PLN 538 million ($150 million) in funding for 11 battery energy storage facilities scheduled for construction between 2026 and 2028.

The projects are backed under the program “Electricity storage facilities and related infrastructure to improve the stability of the Polish power grid,” which will support 172 energy storage facilities across Poland by 2028. Collectively, these projects are expected to deliver approximately 3,900 MW of power and 14,500 MWh of storage capacity.

TAURON Zielona Energia and its special purpose vehicles will receive co-financing ranging from 35% to 45% for 11 investments, totaling over 346 MW of capacity and 1.5 GWh of storage. Key sites include:

• Laryszów (Silesian Voivodeship): 84 MW / 358 MWh
• Ogrodzieniec (Silesian Voivodeship): 55 MW / 237 MWh
• Bałków (Świętokrzyskie Voivodeship): 54 MW / 242 MWh
• Twardogóra (Lower Silesian Voivodeship): 42 MW / 179 MWh
• Dąbrowa Środkowa (Lower Silesian Voivodeship): 45 MW / 192 MWh
• Stare Bogaczowice (Lower Silesian Voivodeship): 30 MW / 134 MWh
• Bytom (Silesian Voivodeship): 18 MW / 77 MWh
• Kuźnia Raciborska (Silesian Voivodeship): 6.9 MW / 30 MWh

The construction of these battery energy storage facilities is a key component of TAURON’s 2025–2035 strategy, aiming to achieve 700 MW of installed battery storage by 2030 and 1.4 GW by 2035.