Signing of the agreement for construction of an energy storage facility in Żarnowiec

The Management Board of PGE Polska Grupa Energetyczna S.A. (“PGE”) discloses that on March 7, 2025 PGE Inwest 14 Sp. z o.o., a company from the PGE Capital Group, signed an agreement (the “Agreement”) with LG Energy Solution Wrocław Sp. z o.o. (the “Contractor") which subject matter is the construction of the Energy Storage Facility in Żarnowiec (“ESF”) along with the electricity grid connection.

The available discharging power of the ESF will be 262.2 MW and the available charging power 269.4 MW. Nominal capacity will amount to approx. 981 MWh and efficiency of the storage facility – 85.2%. An electricity connection linking the ESF with the Żarnowiec substation (owned by the Transmission Grid Operator) will be built as part of the investment (aside from construction of the energy storage units).

The Contractor commits to design and realise the ESF in "turnkey” formula (EPC - Engineering, Procurement, Construction). According to the clauses of the Agreement, the commissioning date is set at April 30, 2027.

The value of the Agreement amounts to PLN 1 264 227 642.28 net (PLN 1 555 000 000.00 gross).

The Agreement provides for contractual penalties for the Contractor related to, among others, failure to meet the deadline for commissioning of the ESF, failure to comply with the guaranteed nominal capacity, failure to meet the guaranteed power or to meet guaranteed efficiency of the storage facility. The total sum of contractual penalties resulting from all failures as provided for in the Agreement cannot exceed 25% of the net value of the Agreement.

The Agreement also includes an indexation clause which takes into account potential increase of the Contractor’s remuneration in certain cases and the maximum indexation of the remuneration due to the above cannot exceed 10% of the Agreement’s value.

The Management Board of PGE additionally informs that the ESF was awarded a 17-year capacity market contract for delivery year 2029 with the capacity obligation at the level of 137.925 MW.