Case 4.1: Przedsiębiorstwo Energetyki Cieplnej - energy efficient district heating system - Poland

Detailed Information

Name of the company: Przedsiębiorstwo Energetyki Cieplnej Sp. z o.o.

Country: Poland

Size of the business: 266 employees



Miejskie Przedsiębiorstwo Energetyki Cieplnej (MPEC) is a heating plant and networks operator owned by Olsztyn Municipality. The company has a long history starting with the establishment of Olsztyńskie Przedsiębiorstwo Energetyki Cieplnej SP. z o.o. (OPEC) in 1968. Its statutory task was the coordination of all heating activities in the city of Olsztyn. At first, OPEC’s main task was the development of technical documentation for the heating network supplied back then by a tyre factory. In 1973, the company was transformed into Wojewódzkie Przedsiębiorstwo Energetyki Cieplnej (WPEC) and started operating regionally as its operating range extended to the entire Olsztyn Voiovodship. The company took over heating plants in eight major cities, thus becoming part of the nationwide centralization trend. The first major investment of the new organisation was the transport and fuel base.

In 1975, a unit of Zakład Energetyki Cieplnej in Olsztyn was separated from the overall structure of WPEC. Due to the dynamic development of the city, the decision was made to establish new coal-based heating plants and transition to a more centralised heating system with three central heating plants in place of 200 local boiler houses. A new heating plant and heat transmission networks were commissioned and finished by 1979 to cover the thermal needs of city of Olsztyn.

In 1987, regional authorities of the Olsztyn Voivode decided to put the WPEC into liquidation and power plants operating outside Olsztyn became independent entities. A year later in 1988, Miejskie Przedsiębiorstwo Energetyki Cieplnej (MPEC) was established. One of the company’s tasks at the time was to take over about 200 local boiler houses from the military administration, health care and education, in order to cover the city of Olsztyn with one heating network.

In 1991, MPEC – the former property of the Treasury – became the municipal property of Olsztyn. The year 1997 brought the long-awaited transformation of the company into a sole proprietorship of the municipality with the city of Olsztyn holding 100% shares.

Recently, MPEC has completed the construction of the Kortowo BIO biomass heating plant. The newly built biomass boiler is part of the strategy for reconstructing the entire heat generation system in Olsztyn and shift from coal-based system to more environmentally friendly systems. Before the decision was made to build a “BIO” heating plant based on renewable fuel (wood chips), a multi-variant concept was developed to specify the legal and technical possibilities of building such a facility. One of the main elements of the concept was to examine the availability of fuel. Determining the anticipated investment outlays and meeting the environmental conditions allowed MPEC to make the decision to start the investment.

The challenge for the next few years was taken on to obtain the status of an energy-efficient heating system referred to in the energy law. The qualifying requirement is the provision of non-conventional sources working for the needs of the municipal heating network. The lack of energy-efficient heating system status makes it virtually impossible to obtain financing for investments from EU funds.

Another reason for making this effort is the desire to improve the condition of the natural environment by reducing CO2 emissions by over 60,000 Mg / year. The scope of the investment planned was mainly influenced by two factors, i.e. the need to diversify the streams of fuels used in heat generation and minimizing the impact on the natural environment. The construction of renewable energy installations is aimed at creating an environmentally friendly energy infrastructure, increasing the energy efficiency of the heating system and the energy security of heat supply to consumers. It is also a way to avoid the rising costs of CO2 emission allowances, which have an increasingly drastic impact on the price of heat.

Main activities

The main source of revenue is the sale of heat in the form of hot water, which is used in heat exchangers to heat utility water, water in central heating installations, and air in air conditioning centres. MPEC produces about 50% of the heat sold to its customers and owns the whole heating network that transports the heat. The company annually sells 1.9 million GJ of which its own production is 1.1 million GJ and its ordered thermal power capacity is 308 MW. Company operates 170 km of heating networks of which >120 km is a pre-insulated network, and has 1,573 heat distribution nodes (including five gas nodes).

Compared to the early years of the company, the following additional activities have been added to the company:

• Maintenance and repairs of water, sewer, gas, electric and central heating installations in residential buildings;

• Heat exchanger cleaning;

• Network emergency services and repairs;

• Diagnostics and assessment of heating networks technical condition;

• Technical consultancy in the field of energy optimization, including energy audits.

The purpose of additional activities is primarily to use the knowledge, skills and potential of our employees as well as the available hardware base. Thus, without incurring additional costs, there were opportunities to diversify the revenue portfolio and increase the value of the company’s goodwill.


Total net revenues from the sale of heat and electricity for the company was PLN 114.5 million. MPEC has two centralized sources of heat production and sells heat to approximately 1,500 customers in the city of Olsztyn and the area of the commune of Stawiguda. The main group of customers are residents of Olsztyn and SMEs, schools, administration, etc.

Acquiring customers is carried out by informing the public about the company and its development plans in traditional and electronic media as well as during direct meetings. The company uses the following information activities and catching customers:

• Publications in traditional press and on websites: advertisement and introduction of operations and ongoing investments in local media outlets, in online media, incl. industry portals, economic and local government portals;

• Distribution of informational and promotional materials as MPEC annually posts printed promotional materials to its customers to provide information on new heat tariffs, promotional content and other relevant information related to the operations of the company (e.g., advertisement of non-licensed services such as exchanger cleaning). MPEC’s key customers additionally receive printed company bulletins;

• Informational campaign on cable television Telewizja Olsztyn and its web portal introduce the activities of MPEC, provide environmental education, offer of services. E.g., the effectiveness and positive reception of these materials was reflected in the increased interest in chemical exchanger cleaning services, the annual orders of which tripled after TV and paper media campaign;

• Electronic media – websites, Facebook, Youtube, Google business card. MPEC runs two websites: and (dedicated strictly to the project of a waste-to-energy plant), both with an ‘ask a question’ tab and analyses the visitor data. Internet engagement included such as collecting data on users’ and local residents’ comments and attitudes towards the company’s activities;

• Organization of meetings, open days, eco-lectures and visits to MPEC facilities for the residents of Olsztyn that are annual popular events;

• The meetings with key clients, local authorities, etc. are usually established by direct contacts and by individual meetings.

Challenges and solutions

Today, MPEC as a company managing heat sources and municipal heating network is facing many new challenges, while consistently aiming at the previously set goals. A few years ago, preparations began to transform the system, which until then had been based solely on coal, towards a wide diversification of fuels, with particular emphasis on renewable energy. Ultimately, the share of heat generated from coal is expected to fall below 40%, and it is planned to be completely eliminated after 2050. As a result of projects implemented currently and in the coming years, the majority of heat will be generated from biomass and waste.

The above-mentioned activities are related not only to the modernization of existing infrastructure but also to increasing the company’s importance in the city economy.

In the coming years, works will be continued on further development of the automation of production processes, in particular the boiler’s fuel supply system as well as the telemetry system. MPEC also plans to introduce new products – energy in the form of cold as well as the service of purchasing heat accumulated in buildings during the summer and released outside by air conditioning systems. Another great challenge is finding and testing a technology that captures CO2 in flue gases from coal combustion.

Their biggest challenge currently is the construction of a waste-to-energy plant with a gas/oil peak boiler. The facility will be built in two stages: the peak boiler – in the fourth quarter of 2021 and the CHP plant – by the end of 2022. The facility will fill the space in the production capacity after the tyre manufacturer Michelin ceases to deliver heat to the city network. The new plant will have a municipal waste-fuelled steam boiler and a turbine. It will generate about 30 MW of thermal power and 7.5 MW of electric power. Additionally, the peak gas/oil boiler will supply 70 MW.

The biggest problems in planning business development are the lack of legislative stability, not only on the national level but also, when it comes to environment protection legislation, also on the EU level. We take up further costly investment challenges, not being sure how long they will serve us. Every new idea appearing in directives and legal acts creates new challenges and additional costs.


The BIO heat plant project was financed from an EU subsidy and a preferential bank loan, in equal shares. The total gross value of the investment was 12 mil. EUR. The natural support for the project was the support of the Mayor of Olsztyn, as Olsztyn Municipality is the owner of the company.

What makes this case innovative?

The company is in the process of actively innovating its Business Model, particularly heat production inputs to shift from coal-based production towards more sustainable biomass-based production taking into account the local resource availability. The company is in the process of building new facilities and improving the efficiency of its production processes to better utilize the heating and cooling processes. The company has been active in engaging with local residents (internet, TV and print communication, open days).

Other related Business Cases

Case 1.1: Ecopellet – environmentally friendly biofuels and pet products from sustainable raw materials – Estonia

Case 1.2: Quercus – production of solid biofuels for energy – Poland

Case 3.1: Kurana – production of bioethanol, electricity and heat from renewable resources in a closed technological loop – Lithuania

Case 3.2: 3B Bioenergie – energy production and special processing of digestate – Germany

Case 5.1: SunPine – an entrepreneurial bio-refinery – Sweden 

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