UPDATE 2-EU's top court orders Poland to halt lignite mining at Turow

(Adds details on Poland’s power system)

BRUSSELS, May 21 (Reuters) - Poland must immediately stop mining lignite coal at the Turow mine operated by state-run PGE , the European Union’s top court said on Friday, handing a win to the Czech government which had sought an order to stop the mining activities.

The Court of Justice of the European Union said it had not yet made a final decision on the case, but ordered Poland to cease mining at Turow until the final judgement is delivered.

“It appears sufficiently likely that the continuation of lignite mining activities at the Turow mine before the final judgment is delivered is likely to have negative effects on the level of groundwater in Czech territory,” the court said in a statement.

Shares in PGE were 5.78% lower at 1303 GMT.

The Czech Republic filed a lawsuit in February calling for a halt to activities at the mine, located near the Czech and German borders, saying Warsaw had violated the bloc’s law by extending mining at Turow until 2026.

Nonetheless, the Polish government last month extended a concession to allow mining at Turow to continue until 2044 - prompting the European Commission to say the region will not receive money from the EU’s flagship green transition fund.

“The (court’s) decision is a path to a wild energy transformation. The EU green deal is failing before our eyes,” PGE said on Twitter, referring to the bloc’s plan to reach net zero greenhouse gas emissions by 2050.

Lignite and hard coal still dominate Poland’s power mix, although the government is planning a large expansion of renewable energy to meet EU climate targets.

Turow supplies lignite to a nearby electricity plant, which provides around 5% of Poland’s power. PGE had previously warned that Turow’s sudden closure would shake the stability of Poland’s power system.

Another Polish lignite-fuelled power plant, PGE-owned Belchatow, which is the biggest in Europe, experienced a temporary outage this week due to a technical failure. Poland avoided power supply problems thanks to reserves and imports, but the incident pushed power prices sharply higher.

“The system managed without Belchatow, it will manage also without Turow,” said Pawel Czyzak from Instrat, a think tank.

The power grid operator PSE and Polish government were not immediately available to comment.

Czech Environment Minister Richard Brabec said he expected the court to hear the Turow case soon.

“(Mining) activity not only has a negative effect on the rights of the citizens at the Czech-Polish border to water as mining affects the groundwater level, but also on the quality of the environment and property of the citizens,” Brabec said. (Reporting by Kate Abnett; Editing by Kirsten Donovan)