Apart from the TAURON Group, three large, vertically integrated energy groups are currently operating on the Polish market: PGE, ENEA, and ENERGA. Furthermore, Innogy Polska is operating in Warsaw, managing the city’s power grid.

The TAURON Group’s competitive environment (landscape) based on the data available for 2018.

According to the data for the first three quarters of 2019, the consolidated energy groups (PGE, TAURON, ENEA, ENERGA) held a 68% market share in the electricity generation sub-sector.

The TAURON Group is a fully vertically integrated energy enterprise (electric utility) that takes advantage of the synergies stemming from the size and scope of the operations conducted.

The TAURON Group controls the value chain, from hard coal mining to the delivery of electricity to the final customers. The TAURON Group conducts its operations in all the key segments of the energy market (excluding electricity transmission), i.e. in hard coal mining, as well as electricity and heat generation, distribution, supply, and trading.

The figure below presents information about the structure of EBITDA based on the main segments.

Generation

The TAURON Group is Poland’s key electricity producer

The TAURON Group’s share in the domestic electricity generation market, based on the gross electricity production output, reached approx. 9% after the first three quarters of 2019. TAURON is the third largest electricity producer on the Polish market. The Group’s generation assets are concentrated in southern Poland. Also the deposits of the hard coal used to fire the TAURON Group’s power plants and combined heat and power plants are located in this region. The location of the generating assets near the coal deposits allows the optimization of the costs related to the transportation of this raw material.

87% of the Group’s generation assets are, as of the end of 2019, hard coal fired units, 10% of which are modern high efficiency generating units. TAURON’s total installed capacity reached almost 5.2 GW as of 31 December 2019. Wind farms’ installed capacity represents 7.4%, hydroelectric power plants’ installed capacity accounts for 2.6%, biomass-fired generating units’ installed capacity constitutes 2.8% of the TAURON Group’s total installed capacity.

Nationwide, after the first three quarters of 2019, the TAURON Group’s hard coal fired units’ installed capacity accounted for approx. 14% of the total installed capacity of all hard coal and lignite fired generating units in Poland. In terms of the installed capacity of the wind farms, biomass and biogas fired as well as hydro power plants, the share of TAURON was approx. 7%, 13%, and 6%, respectively.

According to the data after three quarters of 2019, the PGE Group is the largest electricity generator in Poland, with its share in the domestic electricity production market in the third quarter of 2019 standing at approx. 39%, and the installed capacity of 16.2 GW. ENEA is the second largest electricity producer in Poland, with a market share of around 18% and the installed capacity of 6.3 GW. ENERGA, on the other hand, has the largest share of electricity produced from the renewable energy sources on the Polish market – more than 1.0 TWh out of the company’s total production of 2.8 TWh (36% RES share). The total installed capacity of the ENERGA Group is 1.4 GW.

The Figures below present information about the installed capacity and electricity generated in the first three quarters of 2019.

Gross electricity production
estimated market shares in the first three quarters of 2019

Installed capacity
estimated market shares in the first three quarters of 2019

Distribution

The TAURON Group is the Polish market leader in terms of the number of distribution customers and volume of electricity distributed.

TAURON is Poland’s largest electricity distributor. TAURON Dystrybucja’s share in electricity distribution to the final customers reached approx. 35% in the first three quarters of 2019. The Group’s distribution grids cover more than 18% of Poland’s territory. In 2019, the volume of electricity delivered to the final consumers reached 51.7 TWh. TAURON is Poland’s largest electricity distributor also in terms of revenue from the distribution operations.

It should be emphasized that the TAURON Group’s distribution operations, due to the natural monopoly in the designated area, are a source of stable and predictable revenue, representing a material part of the consolidated revenue of the entire Group. The electricity distribution geographical area on which the Distribution and Supply Segments subsidiaries are historically operating is characterized by heavy industrialization and dense population, and therefore the grid is very well utilized. The number of the Distribution Segment’s customers reached 5.65 million in 2019.

The figure below presents the estimated market share of the individual energy groups in terms of electricity distribution based on the data for the first three quarters of 2019.

Electricity distribution – estimated market shares in the first three quarters of 2019

Supply

The TAURON Group is Poland’s second largest electricity supplier.

TAURON has a 25% share in the electricity supply market to the final consumers in Poland. The volume of the retail electricity supply of the Group came in at 33.7 TWh in 2019. The number of customers served by the TAURON Group’s Supply Segment is more than 5.5 million.

The PGE Group is the largest retail electricity supplier with a 33% market share. The other two groups, ENEA and ENERGA, each have a 15% market share.

In the segment of electricity supply to the households the individual energy groups are geographically tied, first of all, to the areas in which they are acting as an ex officio supplier. The need to submit household tariffs for approval to the President of the Energy Regulatory Office leads to limited options for positioning prices in the product offerings, and what follows, it impacts their attractiveness for the customers. These restrictions do not apply to business and institutional customers. A broader and more open competition exists in these sectors.

The figure below presents the estimated market share of the individual energy groups in terms of electricity supply to the final consumers based on the data for the first three quarters of 2019.

Electricity supply to final consumers – estimated market shares in the first three quarters of 2019.

The table below presents information about the installed capacity and the volume of electricity generation, distribution, and supply after the first three quarters of 2019, as well as the domestic market shares.

Installed capacity, generation, distribution, and supply of electricity by energy groups after the first three quarters of 2019
# Group Installed capacity Generation1 Distribution Supply
Quantity (GW) Share (%) Volume (TWh) Share (%) Volume (TWh) Share (%) Volume (TWh) Share (%)
1. PGE 16.2 34.5 47.6 39 27.1 25.4 32.8 33.3
2. TAURON 5.2 11 10.4 8.5 37.4 35 25 25.3
3. ENERGA 1.4 2.9 2.8 2.3 16.6 15.5 14.7 14.9
4. ENEA 6.3 13.4 21.8 17.8 14.8 13.8 14.4 14.6
5. Other 17.8 38.2 39.6 32.4 11 10.3 11.7 11.9
Total 46.9 100 122.2 100 106.9 100 98.6 100

 

* Volume of gross electricity generated after the first three quarters of 2019. Source: ARE, information from the companies published on their websites, own estimates in case of the companies publishing the net production.

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