Outlook

PGE does not publish financial forecasts but - looking to meet the expectations of capital market participants - every quarter we discuss the EBITDA outlook for the next quarter and the present financial year. This commentary pertains to the identified key drivers of our financial results. As of the date on which this report was published, the EBITDA outlook for each segment in 2018, compared to the results recorded in 2017, was as follows:

Furthermore, as the largest energy-sector company in the country, we also report on planned changes in capacities reachable within the next 3 years.

Prospects for growth of achievable capacities in years 2018-2020 (MW gross)

* including 10,868 MW gross achievable capacities in conventional units of PGE GiEK S.A. and 3,212 MW in Acquired assets (Rybnik power plant, EC Gdańsk, EC Gdynia, EC Kraków, EC Wrocław, EC Czechnica, EC Zawidawie, EC Zielona Góra, EC Toruń)
** including 12 382 MW gross achievable capacities in conventional units of PGE GiEK S.A. and 3,222 MW in Acquired assets

The chart showing new capacity additions illustrates PGE Group's commissioning and decommissioning of capacity. Schedules are subject to change. Data does not include potential capacity growth related to investments in renewables that are dependent on the results of future RES auctions.

Explanation:

ELB – Bełchatów power plant                                          EDO – Dolna Odra power plant                                      

ECR – Rzeszów CHP

ELO – Opole power plant                                                 ELR – Rybnik power plant                                                

MEW – Small hydro power plants

ELT – Turów power plant                                                  ECG – Gorzów CHP                            

2020 is the last year in PGE Group's current strategy. However, we are conducting analyses that go beyond this timeframe, which show that the low-emission scenario is the most likely from amongst the strategic options available after 2020 (nuclear power plant, offshore wind farms, modern coal energy). The changing surroundings, both regulatory and technological, justify implementation of an approx. 1000 MW offshore wind farm project about half way through the next decade. We are also considering a gas-based generation capacities project at Elektrownia Dolna Odra. Preliminary results of a feasibility study show significant chances for a project to build two new 500 MW gas-fired units. If this project is selected, a realistic deadline for the investment would be 2023. Moreover, we are analysing the construction of another 500 MW gas-fired unit at one of our existing locations. A preliminary preparations phase for the nuclear project is also in progress. We are focusing on conducting site characterisation and environmental surveys until an environmental impact assessment report and a site characterisation report are prepared.

The energy industry's future is likely to look differently than it had been perceived before. Innovations, electromobility, low-emission technologies, capacity market, social expectations being reflected in regulations, changes in the use of fossil fuel resources, growing importance of renewable sources and many other factors point to the thesis that successful companies will be those that are modern, innovative and quickly responding to changing surroundings, while respecting the natural environment. PGE is already entering this change process and intends to shape a responsible energy industry of tomorrow in our country.