Integrated report 2020
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- Sustainable transformation
- PGE in 2020
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Integrated report 2020
We are the second largest energy distributor in terms of the number of customers, with approx. 25 percent. share in the Polish energy distribution market. Our distribution area covers almost 40 percent. area of Poland. With the use of over 290 thousand. km of the power grid, we supply electricity to over 5.5 million customers.
The business of the segment is the provision of electricity supply services to final off-takers via high, medium and low voltage power grids and devices.
* managerial perspective
Segment revenue is based on a tariff for electricity distribution services, which is approved by the ERO President every year at company request and is regulated.
As a rule thumb, the tariff should allow costs related to the distribution system operator’s on-going activities to be transferred. These are both justified operating costs, depreciation as well as costs related to the necessity to cover grid losses on electricity distribution or the purchase of transmission services from the TSO. At the same time, the tariff reflects the transferred costs in fees such as the RES fee, transition fee or – starting from 2019 – co-generation fee.
The key element shaping the Distribution segment’s result is return on PGE’s invested capital. This is based on the Regulatory Asset Base (“RAB”), which is established on the basis of completed investments and taking into account asset depreciation. The Regulatory Asset Base serves as the basis for calculating return on capital, using weighted average cost of capital, which is published by the ERO President in accordance with a set formula and using as the risk free rate the average yield on 10-year State Treasury bonds with the longest maturity during the 18-month period preceding the tariff application submission, quoted on the Treasury BondSpot market. As part of the tariff process for 2021, the ERO President extended the observation period for the profitability of the 10-year State treasury bonds to 36 months. In addition, return on capital depends on the achievement of individual quality targets set by the ERO President for performance indicators including: interruption time, interruption frequency, connection time and (not yet included) time to provide metering and settlement data.
PGE Dystrybucja S.A. operates in the area of 129 829 sq. km and delivers electricity to approximately 5.5 million customers.
Volume of distributed energy and number of customers in 2020 and 2019
| Tariff | Volume (TWh)* | Number of customers according to power take-off points |
||
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| A tariff group | 5.16 | 5.56 | 111 | 109 |
| B tariff group | 13.99 | 14.28 | 12,504 | 12,120 |
| C+R tariff groups | 6.5 | 6.92 | 486,272 | 483,668 |
| G tariff group | 10.02 | 9.62 | 5,030,101 | 4,966,098 |
| TOTAL | 35.67 | 36.38 | 5,528,988 | 5,461,995 |
| Operational data | Unit | 2020 | 2019 | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|---|
| Number of stations, including: | pieces | 95,603 | 95,014 | 94,203 | 93,488 | 92,770 |
| number of transformer stations | pieces | 94,955 | 94,326 | 93,684 | 93,031 | 92,405 |
| MVA power | MVA | 32,663 | 32,347 | 31,696 | 31,096 | 30,323 |
| Total length of power lines | km | 295,613 | 293,825 | 291,002 | 287,992 | 285,584 |
| HV lines | km | 10,336 | 10,317 | 10,284 | 10,281 | 10,197 |
| MV lines | km | 114,539 | 113,856 | 112,418 | 111,568 | 110,801 |
| LV lines | km | 170,738 | 169,652 | 168,300 | 166,143 | 164,586 |
| Grid loss ratio | % | 5.2 | 4.8 | 5.1 | 5.4 | 5.8 |
| SAIDI ratio, including: | minutes | 251 | 261 | 299 | 557 | 401 |
| Planned | minutes | 40 | 58 | 87 | 95 | 119 |
| Unplanned with catastrophic | minutes | 211 | 203 | 212 | 462 | 282 |
| SAIFI ratio, including: | per customer | 3.67 | 3.88 | 3.92 | 5.48 | 4.49 |
| Planned | per customer | 0.24 | 0.31 | 0.47 | 0.48 | 0.61 |
| Unplanned with catastrophic | per customer | 3.43 | 3.57 | 3.45 | 5 | 3.88 |
| Connection time | days | 206 | 199 | 211 | 215 | 248 |
The Distribution segment is characterised by a relative stability of financial results. Results depend on the volume of energy distributed and the level of distribution tariff set by the regulator. Moreover, results depend on the cost to cover balancing differences.
Capital expenditures incurred in Distribution segment in 2020 and 2019
| PLN million | 2020 | 2019 | % change |
|---|---|---|---|
| Development investments | 791 | 881 | -10% |
| Modernisation and replacement | 781 | 1,245 | -37% |
| Other | 108 | 99 | 9% |
| TOTAL | 1,680 | 2,225 | -24% |
In 2020 the largest expenditures in amount of PLN 694 million were incurred for connection of new off-takers.