Energy transition

In May 2022, the Zoning Plan of the Głogów Municipality for the Huta precinct came into force, admitting photovoltaic installations. In the third quarter of 2022, KGHM, as a DSO, issued the Technical Connection Conditions for all three locations of the HMG I-III PV power plant. In the fourth quarter of 2022, a legally-binding environmental decision was received and work began on developing project documentation (maps for design documentation and for approvals from owners of utilities). The provisions of the connection agreement are currently negotiated.

With regard to offshore wind farms, in 2022 Q1 a Memorandum of Understanding (“MoU”) was concluded with Total Energies Renewables SAS (“Total Energies”).

On the basis of the concluded MoU, joint participation in the procedure for obtaining location decisions for the construction of Offshore Wind Farms (PSzW) was agreed. If a PSzW is obtained at the site, KGHM together with Total Energies will implement offshore projects within the so-called joint venture. By the end of Q2, 7 applications for PSzW had been submitted. By the end of 2022, all adjudication proceedings for the sites covered by KGHM and Total Energies’ applications had been initiated. A set of documentation was submitted for the needs of the proceedings conducted by the Ministry of Infrastructure. Issuing of the decision concerning PSzW for the sites covered by the KGHM and Partner applications is expected in Q1 and Q2 of 2023. In terms of onshore wind farms, analyses were initiated concerning a possibility of building wind farms on own real estate and discussions continued with entities with interesting projects for sale.

In 2022, three new projects were set up for the preparatory phase of the construction of the “Tarnówek” and “Kalinówka” photovoltaic power plants for the Tailings Plant and the “Polkowice” photovoltaic power plant on the premises of the Tailings Plant. By the end of the year, proceedings were initiated to select a designer for these three projects. Moreover, a multi-variant expert report was received with the aim to indicate a possibility of connecting new generation sources to KGHM’s power grids in the area of the Lubin Mine Division. Preparations are therefore in progress in order to establish another photovoltaic power plant project on the site of the decommissioned shafts of the Lubin mine. Another project was also set up to launch the preparatory phase for the construction of a photovoltaic power plant on the premises of the Cedynia Copper Wire Rod Plant Division. In addition, analytical work continues concerning the use of other KGHM sites for the development of renewable energy sources. In parallel, analyses of the market environment are carried out with a view to acquiring companies with projects to build photovoltaic farms or with operating installations.

In January 2022, KGHM Polska Miedź S.A. became a signatory to the “Sectoral agreement for the development of the hydrogen economy in Poland” carried out under the auspices of the Minister of Climate and the Environment of the Republic of Poland. At the end of February, KGHM became one of the initiators of the newly founded Lower Silesian Hydrogen Valley Association. In the third quarter of 2022, the formation of the Transformation Projects Department was completed, which carries out projects related to the generation and use of hydrogen in the Company’s core production business. The Głogów Copper Smelter and Refinery has attempted to carry out fire refining process with the use a hydrogen mixture. It is currently at a development stage.

In 2022, internal analyses were carried out on the feasibility of applying the technology of carbon capture and sequestration (CCS) from exhaust gases emitted at the smelters/refineries of KGHM Polska Miedź S.A. The company has established numerous contacts with the world’s leading technology suppliers and CCS installation contractors as well as with Research Institutes and Scientific Entities. The Głogów Copper Smelter and Refinery has also attempted to test the feasibility of carbon sequestration in metallurgical plants.

On 14 February 2022, KGHM signed the Early Works Agreement with NuScale Power, LLC (the nuclear technology provider), representing the first step in the implementation of SMR technology within the KGHM Group’s business operations. On 20 April 2022, KGHM and TAURON Polska Energia S.A. signed a letter of intent on cooperation in the scope of construction of low-emission energy sources, including using small modular nuclear reactors (SMRs). On 8 July 2022, the Company submitted the first application in Poland regarding the safety assessment of the small modular reactor technology considered by the Company to the National Atomic Energy Agency. On 6 September 2022, KGHM Polska Miedź S.A. and SN Nuclearelectrica SA signed a memorandum on cooperation on the development of SMR. A preliminary site assessment report for the SMR reactor is currently being developed.

On 30 November 2021, KGHM announced an open tender for the purchase of electricity generated from Renewable Energy Sources (RES). In the first quarter of 2022, bids were received for the sale of RES energy under a PPA. The Standing Committee on Energy Purchasing decided to select one of the bids. The Agreement with Solartechnik (Invest PV 7 Spółka z o.o.) was bilaterally signed in the third quarter of 2022. The sale of electricity to KGHM, generated by the Żuki Solar Power Farm in the Municipality of Turek, commences from 1 April 2023. The planned volume of sales is 5,300 MWh/year.

The share of energy from own sources including RES in 2022 in KGHM amounted to 9.46%.