OPERATIONS IN 2019

GRI 102-10, 103-3

PGNiG TERMIKA EP’s core business is in the generation and distribution of electricity, compressed air and cooling, as well as heat generation, distribution and trading. PGNiG TERMIKA EP is the PGNiG TERMIKA Group’s competence centre for commercial power generation and extraction of coal mine methane. The company operates generation assets with a total capacity of ca. 769 MWt and 183 MWe, and approximately 310 km of heat networks. It is present in the municipalities of Jastrzębie-Zdrój, Czerwionka-Leszczyny, Knurów, Racibórz, Kuźnia Raciborska, Pawłowice, Rybnik, Wodzisław-Śląski, Żory and Częstochowa, and sells its products mainly to housing cooperatives and mines.

The PGNiG TERMIKA Group takes steps to modernise its old and environmentally inefficient generation assets to meet environmental regulations, stricter industrial emissions standards and BAT (best available technology) criteria. The key investment projects underway in 2019 included the performance of the contract to construct a CCGT unit and a peak-load boiler house at the Żerań CHP plant and an investment programme to upgrade the Pruszków CHP plant. In August 2019, an environmental permit was issued for the construction a multi-fuel unit at the 75 MW Siekierki CHP plant.

In 2019, another main capacity auction was held for 2024 supplies. As a result of three main auctions held by Polskie Sieci Energetyczne in 2018 and one held in 2019, PGNiG TERMIKA and PGNiG TERMIKA EP executed the following contracts:

• CCGT unit at the Żerań 2 CHP plant: a 17-year supply contract for 2021–2037 (net capacity of 433.3 MW);
• Units No. 7 and No. 8 at the Siekierki CHP plant: annual supply contracts for 2021–2024 (total net capacity of 140 MW);
• Moszczenica CHP plant unit: annual supply contracts for 2021–2022 (net capacity of 7 MW), and for 2023 (6.4 MW);
• Wodzisław – Częstochowa CHP plant unit: annual supply contracts for 2021–2023 (net capacity of 1.2 MW);
• Moszczenica – Wodzisław CHP plant unit: annual supply contract for 2024 (net capacity of 8 MW);
• CFB unit at the Zofiówka CHP plant: an annual supply contract for 2024 (net capacity of 65.1 MW).

Furthermore, in 2018 the Stalowa Wola CHP plant (CCGT unit construction project implemented by PGNiG TERMIKA and Tauron Polska Energia S.A.) signed a seven-year supply contract for 2021–2027 (net capacity of 386 MW).

In 2019, PGNiG TERMIKA supplied heat to two municipal networks: the Warsaw heating network, owned by Veolia Energia Warszawa S.A., and its own heating network, covering Pruszków, Piastów, and Michałowice. The heat output in 2019 corresponded to the requirements set out in the annual agreement with Veolia Energia Warszawa S.A. under the multi-year contract for the sale of heat from PGNiG TERMIKA S.A. generating facilities, effective until August 31st 2028. The company also used Veolia’s network to supply heat to its own end customers, based on a transmission contract (those customers are billed on different terms as they are classified in PGNiG TERMIKA’s separate tariff group – ‘OKW’).

PGNiG TERMIKA holds licences for electricity generation, heat generation, and heat transmission. In 2019, the company applied the following tariffs for heat generated at the Żerań CHP plant, Siekierki CHP plant, Pruszków CHP plant, Wola heating plant and Kawęczyn heating plant, and for transmission and distribution of heat via the heating networks in the Pruszków area (supplied from the company’s own heat generating source: Pruszków CHP plant), as well as in the Annopol, Chełmżyńska, Jana Kazimierza, Marsa Park and Marynarska areas. The following tariffs applied in 2019:

• Tariff effective from September 1st 2018 to August 31st 2019, resulting in a 0.58% increase in average prices charged by PGNiG TERMIKA S.A.;
• Tariff effective from September 1st 2019 to August 31st 2020, resulting in a 7.29% increase in average prices charged by PGNiG TERMIKA S.A.;

PGNiG TERMIKA EP holds licences for electricity generation, heat generation, heat transmission, heat trading and electricity distribution. The tariffs applicable in 2019 included:

• Tariff effective from January 1st to June 30th 2019 for heat generated at PGNiG TERMIKA EP’s heat generating sources;
• Tariff effective from July 1st to December 31st 2019 for heat heat generating sources, resulting in a 3.51% increase in average prices charged by PGNiG TERMIKA EP’s, and for distribution services, resulting in a 2.29% increase in average prices charged by PGNiG TERMIKA EP’s. The tariff will apply until June 30th 2020;
• Tariff effective from January 1st to April 30th 2019 for electricity distribution services by PGNiG TERMIKA EP’s;
• Tariff effective from May 1st 2019 to December 31st 2019 for electricity distribution services by PGNiG TERMIKA EP’s. The tariff will apply until April 30th 2020.