Operating results

Production of electricity

PGE Group's key operating indicator is the volume and structure of electricity production. From the viewpoint of margins, production using the Group's own fuel, i.e. lignite, is of particular importance. The production structure is mainly dependent on asset availability, i.e. the repair schedule for generation units. 

In 2017, we produced 39.05 TWh of electricity from lignite, which is 5% more y/y, thanks to a lighter repair schedule at Elektrownia Bełchatów. Total repair time was shorter by 8,600 hours y/y. PGE Group's second most-important fuel is hard coal, with which we produced 12.35 TWh, denoting 9% growth y/y. The increase in volume results from the recognition of PGE Energia Ciepła assets acquired. The asset acquisition enabled us to increase gas-based production volumes but this was also supported by a gas-and-steam unit at our CHP plant in Gorzów being put into service.

Production volume by fuel and technology[1]:

Total renewables production at PGE Group reached 2.08 TWh and was 7% lower than in the previous year. The volume of production from renewable sources is counted as the sum of production of electricity from wind, water and biomass (taking into account co-combustion at conventional plants). The lower renewables production volume is related to a decline in the profitability of biomass-based production. Electricity produced at pumped storage plants is not classified as renewables. Higher wind- and water-based production volumes in y/y terms were related to favourable weather and hydrological conditions.

Electricity distribution

PGE Group's second most important business activity after electricity generation is its distribution. In the past year, our grids delivered 35.34 TWh of electricity to 5.35 million points of power off-take. The distribution volume is characterised by stable systematic growth in response to growth in economic activity and GDP.  In 2017, the distribution volume increased by 3% y/y. Growing demand necessitates consistent investment in the distribution network so as to meet the needs of customers and a growing national economy.

6-Y CAGR – Compound Annual Growth Rate in 2011-2017 was 2.2%

Lignite mining

In 2017, 49.51 million tonnes of lignite was extracted (up by 4% y/y). The coal mines KWB Bełchatów and KWB Turów are some of PGE Group's largest organisational units, thus the extraction volume quantifies one of PGE Group's key activities. However it should be emphasised that fuel production is strictly related to and correlated with the volume of electricity production at power plants for which the mines are a natural source of fuel.

Lignite resources and mining levels

Retail sale of electricity

Electricity sales to end customers are an activity that is characterised by fierce competition.
Electricity sales volumes depend on the adopted sales strategy. In 2017, sales volume declined by 6% y/y to 40.43 TWh - the decline resulting from a withdrawal from a volume-maximisation policy in favour of a margin-maximisation policy (this applies to corporate clients).

Sale of heat

In 2017, PGE Group's heat sales totalled 24.85 million GJ and were 6.79 million GJ higher than in 2016. The growth was driven by the acquisition of PGE Energia Ciepła district heating assets, i.e. CHP plants in Kraków, Gdańsk, Gdynia, Wrocław, Zielona Góra, Czechnica, Toruń and Zawidawie. It should be noted that the acquired assets are recognised proportionately for the period from 14 November, meaning that the heat sales volume reported for 2017 does not fully reflect this transaction's potential.

[1] We traditionally measure production volumes in two ways. By fuel and by generation units. Some of our generation units are multi-fuel (e.g. small amounts of biomass are combusted in our coal plants as supplementary fuel, therefore not all of the energy coming from a coal plant is produced using lignite).