The TAURON Group is a vertically integrated company, operating in all key segments of the power sector. The Group's financial result depends to a large extent on the effects of the assets' production activities, as well as their efficiency. Thus, the production (technical) capital, as a tool for generating revenue, is an important element of the TAURON Group’s business operations. The Group’s Strategy places a strong emphasis on developing a stable base of regulated assets and improving the efficiency of conventional assets. The carrying amount of all of the TAURON Group’s assets is more than PLN 35 billion. The TAURON Group’s assets are very diverse, which is due to both the characteristics of individual segments, as well as the significant differences in the age of individual devices.

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The production capital will be shored up by putting into operation in 2020 of the 910 MW unit in Jaworzno and the 450 MW CCGT unit in Stalowa Wola.

Due to the tightening of environmental requirements (BAT conclusions), some generating units are currently undergoing refurbishment. Nevertheless, due to the significant wear of the TAURON Group’s production fleet, the coming years will be a period of the transformation of the generation segment by way of decommissioning the inefficient units and developing new, low and zero emission facilities. The update of the Strategic Directions assumes that by 2025 their share in the Group will be close to 30%, and in 2030 more than 65%. Such measures will allow for reducing emissions of all pollutants by 2030, including cutting the CO2 emissions by more than half.

The largest contribution to the TAURON Group’s financial result is made by the Distribution Line of Business, in which the largest capital expenditures are incurred. Only in this line of business TAURON invests approx. PLN 2 billion per annum. The changing environment, in particular the development of renewable energy sources, also of the prosumer type, has a large impact on the need to upgrade and expand, as well as adapt the existing grid infrastructure. In addition, the growing expectations of customers and the approach of the Energy Regulatory Office have an impact on the need to improve the quality and reliability of electricity supply. In view of the above, TAURON Dystrybucja in implementing a cable grid construction program, increasing the share of cable lines in the distribution grid and thus improving quality indicators, security of electricity supply and resistance against weather conditions, including the ever more frequently occurring sudden weather conditions associated with climate change. Among the four integrated energy groups in Poland (the others are ENERGA, ENEA and PGE), the TAURON Group boasts the largest share of cable lines in the structure of network grids and very good quality indicators.

Market challenges imply the need to make changes to the mining assets, which in the short and medium term will be the fuel base for the TAURON Group’s changing production mix. The investment projects currently underway, involving the construction of the Grzegorz shaft at ZG Sobieski, the construction of the 800 m level at ZG Janina and the implementation of the capex program at ZG Brzeszcze will allow for a more efficient fuel supply for the conventional generating units remaining in operation.
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    power plants
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    Combined heat
    and power plants

In order to ensure adequate asset productivity and efficiency of electricity supply, the Group is implementing a capex program that is tailored to its needs. A significant part of investment outlays is allocated to the distribution segment, where investment projects are primarily focused on connecting new customers and producers as well as upgrading the infrastructure in order to improve the reliability of electricity supply. Another investment direction is the generation segment, in which the largest outlays were incurred for the finalization of the implementation of the 910 MW power unit in Jaworzno and the modernization of air protection installations. In the future, we can expect that the level of capital expenditures in the distribution segment will be maintained, while with respect to electricity generation the expenditures on conventional energy will be reduced. Obsolete, inefficient conventional units will be gradually shut down, while a significant increase in capital expenditures on renewable energy sources should be expected.

The above mentioned activities and many others, of a smaller scale, will ensure that the production capital will, in the long run, continue to be the strong basis for building the TAURON Group’s value.

Key data on the capital

Key data on the TAURON Group’s production capital in 2018 and 2019
Key data on the capital 2019* 2018
Hard coal extracting coal mines 3 3
Hard coal-fired power plants (quantity) 5 5
Hard coal-fired power plants (installed capacity) 4.3 GWe; 1.35 GWt 4.3 GWe; 1.2 GWt
Combined heat and power plants (quantity) 3 3
Combined heat and power plants (installed capacity) 0.3 GWe; 1.2 GWt 0.3 GWe; 1.2 GWt
Proprietary district heating networks – TAURON Ciepło (length) 857 km 844 km
Heat supply PJ PJ
Hydroelectric power plants (quantity) 34 34
Hydroelectric power plants (installed capacity) 133 MW 133 MW
Wind power plants (quantity) 9 4
Wind power plants (installed capacity) 382 MW 201 MW
Electricity distribution lines (length) 237 thousand km 235 thousand km
Transformers (distribution) 58.9 thousand 58.8 thousand
Stations MV/LV 60.9 thousand 59.8 thousand
Stations HV/MV 491 490
Capital expenditures 3.7 billion
Depreciation 1.7 billion
* As of 31.12.2019.

Management of the return on capital

TAURON’s management of return on the capital is performed, first and foremost, through investments, including:

  • connecting new consumers (and producers) to the distribution grid, expanding and upgrading the distribution grid;
  • improving extraction efficiency and providing fuel for the TAURON Group’s generating units through:
    • construction of the Grzegorz shaft including the infrastructure and accompanying headings at ZG Sobieski,
    • construction of the 800 m level at ZG Janina,
    • implementation of the ZG Brzeszcze capex program.
  • finalizing the construction of modern generation capacity, key for energy security, including:
    • 910 MWe hard coal-fired generating unit at Jaworzno Power Plant,
    • 450 MWe CCGT unit at Stalowa Wola;
  • expanding the district heating network;
  • adding the heating function at Łagisza Power Plant by refurbishing the 460 MW turbine to enable the heating function (150 MWt);
  • adapting the generating units to the operational conditions in force beyond 2021, resulting from the introduction of the BAT conclusions;
  • obtaining revenue from the capacity market and as part of the RES auctions;
  • increasing the installed capacity of RES and improving the productivity of the existing assets;
  • improving the quality and reliability of the power supply for electricity consumers.

Results achieved

Results achieved by the TAURON Group in 2018 and 2019 as part of management of return on production capital
Results achieved 2019 2018
Commercial coal production by segment groups: coal dust, medium size lump coal, large size lump coal, eco-pea coal 3.78 million Mg 5.01 million Mg
Net electricity production 12.7 TWh 14.9 TWh
including electricity production from RES 1.4 TWh 0.98 TWh
Heat distribution 8.51 PJ 8.78 PJ
Heat generated 9.03 PJ 9.63 PJ
Distribution of electricity 51.73 TWh 51.97 TWh

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