Short term outlook
TAURON Capital Group’s strategy responds to changes in the regulatory and macroeconomic environment as well as market challenges in both short as well as long term. In the time frame covered by the current Strategy, until 2025, TAURON Group is focusing on ensuring financial stability by increasing operational efficiency and optimizing its processes. As part of its development, TAURON is continuously improving its offering in response to the customer needs. We do not want to remain only a market participant, but we see ourselves as the leader in the transition of the energy sector in Poland.
At the stage of developing the Strategy, it was assumed that there would be no significant changes in the market and competitive environment until 2020, however, as a result of acquisitions carried out by PGE and ENEA in 2017, the generators’ market landscape changed. Thanks to the acquisition of EDF assets, PGE is strongly developing its heating business, while ENEA, in connection with the acquisition of ENGIE assets and commissioning of the 1075 MW unit in Kozienice, has climbed to the runner-up spot in terms of installed capacity. At the same time, the share of industrial electricity generation increased, as, among others, ORLEN Group commissioned two gas fired units – in Płock with a capacity of 600 MW, in Włocławek with a capacity of 463 MW.
It is assumed that up to 2025 the highest growth rate will be observed in the renewable energy sources. On one hand, this will be the result of an increase in prices on the wholesale electricity market, associated with the charges related to the costs of CO2 emission allowances, on the other hand, it will also the consequence of the strong support for the development of renewable energy sources and the cost competitiveness of such technology.
Medium term outlook
In the medium term, a slight decrease of the electricity demand growth rate is assumed. The most important factors affecting the level of electricity demand include a further improvement of energy efficiency and, at the same time, still large potential for electricity consumption growth.
Consumers are expected to further increase consumer awareness in connection with the digitization processes, access to prosumer installations and smart grid solutions. An ever broader range of services based on the smart grid infrastructure, in particular smart meters, is assumed. The role of the demand side management services (DSR / DSM) will also increase, which will largely result from the development of smart technologies and market mechanisms.
Due to the avalanche growth of prosumer installations, there will be a need to further develop transmission systems and distribution grids in order to adapt them to greater load variability, as well as to support bi-directional flows.
Long term outlook
It is assumed that the years 2030-2035 will be a period during which a deep review of development scenarios with respect to the climate will be required, depending on the intensity of climate change. If the ultimate temperature increase estimated for that time frame exceeds 20C, then we are forecasting a further tightening of environmental standards towards a substantial reduction of the CO2 emissions and extremely stringent emission standards for nitrogen and sulfur oxides as well as mercury and dust. Tightening climate policy will result in a reduction in the supply of CO2 emission allowances under the ETS, which will lead to a significant increase of the prices of these allowances.
In the event that global temperature forecasts indicate an increase below 20 C, a scenario where high-efficiency profitable coal assets will be maintained is possible, with a simultaneous reduction of emissions through the development of low and zero-emission generation sources and limited development of coal fired assets, conditioned on the demand for coal fuel and the possibility of obtaining it at competitive costs.