Pawel Urbanski
CEO
Inven Group

04 May 2020

INVEN Group invests in and develops medium size CHPs and RES projects. The company was co-founded by Pawel Urbanski who formerly sat as President of PGE SA, the largest energy group in Poland. He is also presently Director of the Business School at Warsaw University of Technology.

You led the biggest company in the energy sector but decided to open your own business, focused on clean energy. What was the motivation behind this course of action?

The move had quite a simple motivation: technologies are changing and so is the attitude of consumers, who much prefer to be supplied by clean energy and in a more efficient way. This demand will probably not be fulfilled by big corporations, this is what global trends show us. Our motivation thus was to do something new, based on understanding of the trends, something clean. 

You remark that demand will not be fulfilled by big corporations, but local, traditional giants are all investing in renewable energy assets…

Obviously, there is room for many players, but I think there is a difference in reaction time with big state-owned corporations, how fast they can adapt to perform into these new technologies. They have traditional business to take care of and lack of incentives of taking risk, of being creative. Generally, politicians do not reward such behaviour as they have other priorities.

If you move outside big energy organizations things tend to go faster. It is riskier and less insured, as in normal business. You must see where the niches in the market and trust in fair regulations.

Would you say there is a genuine willingness in Poland (whether we refer to people, companies or the government) to go in a green direction?

I think that it changes now, we are somehow at a crossroad. In a matter of quarters, the government should propose what they believe that Poland’s energy sector should be like. 

 

All who are following the case know that coal is not the future, including coal miners themselves. If you look at the stock valuations of our largest companies you will notice they dropped dramatically, they are worth one fifth of the value they had when they were listed, 8-10 years ago. It is not related to COVID-19.

We are at a point when the government should propose some direction, restructuring, offer new incentives to protect value. Business as usual is not the strategy for now.

 

If we refer to the Polish citizens here, they are like everywhere else: changing, becoming more environmentally aware. At the same time the energy prices are going up and this gets noticed. So these two trends now coincide and could create a demand from consumers to politicians to change the way in which the industry is managed and regulated.

How far can renewable energy take us though? What do you see as a realistic energy mix for Poland’s future?

I do believe renewables are the future. Gas is a transition fuel and necessary in an economy like Poland which is still growing. But new technologies are coming. There is a huge drop in storage price and hydrogen is also a good bet for the future.

 

There is a scenario where we can move from where we are now to a completely new point, like a leapfrog, and focus on RES, storage, e-mobility and integrating everything into one smooth ecosystem. It is a bold vision but attainable.

A part of the industry can remain under government control for security of supply, but the rest should be left to market forces, to people who want to offer their talents and efforts to fulfil this scenario.

 

These days Poland want to be energy independent, but we import coal. New power plants are not using Polish technologies, so we import technology as well. And we build them using quite a lot of workforce from the outside. It is a bit of a myth that thanks to coal we are independent.

We are meeting you at the Business School at Warsaw University of Technology. Do you want to lend a piece of advice to businesses that are just starting out?

One will have to maximize profit and deliver products that people want to buy, there will not be much departure from this principle. But it is no longer enough to just to this, rather businesses have to be responsible even though sustainability does not always mean you will make money off it. This latter aspect I expect will play an even bigger role as we move forward.

Do you already have a sense of how the COVID-19 outbreak will be impact your business/the energy sector in the short term, as well as the academic sphere?

 

We see that demand and prices are falling in the short run. This is not good news for companies with high fixed costs, especially generators. Everything will be a little harder now. In the long run however, I believe in a digital sustainable future, and that means technologies that will need more clean electricity.

 

In the academic sphere - I generally like the respect to knowledge and observe increasing interest in rational explanation of this phenomena. On the other hand, I hope the COVID-19 story will be a good lesson of humility. 

Other thoughts you would like to share regarding this topic?

We can see quite interesting “competition” between different countries during the pandemic. How they approach COVID-19 in terms of introducing lockdowns, virus testing, industry regulations etc. In a one-year time we may have some really deep insights and various lessons. Let’s just hope that each country chooses its own path in a fair way.

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