Renewables

*Managerial perspective.

The Renewables segment generates revenues mainly from the sale of electricity, however contrary to production at system power plants within the Conventional Generation segment, this revenue is subject to a larger degree to changes in weather conditions and prices on the spot market due to the renewables sales model in place. Electricity output volume translates into property rights (green certificates) and revenue from the sale of energy origin certificates obtained by the segment’s assets, excluding hydropower plants over 5 MWe.

A stable part of the segment’s results is related to the provision of ancillary services using pumped-storage plants, which is performed on the basis of an agreement with the TSO.

On the cost side, the most important items include: depreciation of segment assets, use of energy to pump water at pumped-storage plants and third-party services, mainly in the form of repair services. Property tax and employee wages also constitute a significant cost item in this segment.

The PGE Capital Group’s operations in renewable energy are managed by the PGE Energia Odnawialna S.A. Due to the profile of operations. The segment includes also  PGE Baltica responsible for all activities related to off-shore wind farms.

In the second quarter of 2020, newly built wind farms: Starza/Rybice oraz Karnice II were commissioned. These farms include 43 turbines with a total installed capacity of 98 MW. The investment was carried out in the West Pomeranian Voivodeship, in the area of Kamień Pomorski and Gryfice counties. At the end of July 2020, PGE acquired wind farm Skoczykłody, located near to Rawa Mazowiecka, with a total capacity of 36 MW. The wind farm was constructed in 2015 and consists of 12 turbines. Currently, installed capacity of the PGE’s wind farms amounts to 683 MW. Between September and November 2020, four new photovoltaic power plants were commissioned: PV Lesko; PV Bliskowice; PV Lutol 1; PV Lutol 2, with a total installed capacity of 4 MW.

Assets in the segment include:

• 17 wind farms,
• 5 photovoltaic power plants,
• 29 run-of-river hydro power plants,
• 4 pumped-storage power plants, including 2 with natural flow.

Main assets of the Renewables segment with their installed capacity

Installed capacity and production in power plants of Renewables segment

The segment’s results depend on weather and hydrological conditions as well as on electricity prices, green certificate prices and revenue from regulatory system services.

Capital expenditures (excluding acquisitions) incurred in Renewables segment in 2020 and 2019