Outlook – strategy

As a result of the implementation of the Strategy, the PGE Group wants to build a stable level of EBITDA with an evolution in the “green” and regulated direction and limit its exposure to market changes. The expected EBITDA value is to increase from over PLN 5 billion in 2025 to over PLN 6 billion in 2030.

The ambitious investment program will be implemented while maintaining a stable level of debt and an investment grade rating. The PGE Group’s objective is to take full advantage of the financing options dedicated to “green” investments and off-balance sheet financing. The share of aid funds in the financial needs of the PGE Group by 2030 should amount to at least 25%.

EBITDA outlook

Horizon of the financial year, resulting from periodic reporting and from budgeting. Horizon proper for the specifics of financial markets. Visibility: renovation plan, contracting of energy, fuels and CO2, knowledge of tariffs, WACC URE, WRA. Estimated impact of regulatory decisions.

EBITDA 2020 in PLN bn Outlook 2021 vs 2020 Main factors
Conventional Generation


  • Pressure of falling margins and volumes triggered by market factors
  • Negative effect is not offset by capacity market revenues and generation of new unit 7 in Turów PP
District Heating


  • Additional revenues from capacity market
  • Rise of tariff for heat sale triggered by pressure from CO2 cost


  • Positive effect of wind farms commissioned during 2020 and the acquired Skoczykłody farm


  • WACC maintained at level of year 2020
  • Regulatory Asset Base (RAB) higher by ~PLN 1.4bn: ~PLN 18.9bn


  • Increase in demand and restoration of retail market margins
  •  Presja pokrywania kosztu usługi dystrybucji energii dla prosumentów

Macroeconomics. A economic cycle. The economic situation in Poland and in the region.

MACROECONOMIC ENVIRONMENT – GLOBAL Expected strong rebound of 3.5-4.0% economic growth in Eurozne is expected in the coming years An increase in industrial production in the Eurozone, following the launch of economic recovery programmes, should also entail an increase in industrial production in Poland and in exports of goods, which allows us to expect an increase in demand for energy in the NPS
A much smaller than expected decline in industrial production in 2020 Significant portion of the funds allocated for economic recovery will be earmarked for measures aimed at decarbonising the economy, which, combined with the tightening of the climate policy (rising prices of CO2 emission rights, the rising share of RES), will not improve the outlook for coal-fired power generation and should not cause any significant rise in coal prices. In the case of natural gas, on the other hand, one should expect both a rise in prices and in its share of power generation in the coming years
A significantly higher share of services in the fall in GDP in 2020, expected to rebound only in late 2021, subject to high risks and the degree of restrictions easing. The process of recovery to pre-pandemic levels to be spread over several years Wide availability of financial resources targeted at decarbonisation may facilitate the implementation of investments oriented towards the transformation of the PGE Group
Central bank interest rates in most developed economies were already at very low or negative levels before the outbreak of the pandemic, hence no prospect of rising rates in the nearest future
A positive outlook for the balance of trade and economic activity in the industrial sector (PMI rose to 57.7 points in February), with a negative outlook in the services sector (PMI services has been below 50 points for several months, with a reading of 44.7 points in February
New programmes to support the recovery of the EU economy worth EUR 750 billion, linked to the long-term EU budge
Tightening of the EU climate policy, adoption of a CO2 reduction target of 55% in 2030, expectations of further instruments to accelerate the decarbonisation of the economy
MACROECONOMIC ENVIRONMENT – POLAND Poland’s real GDP growth in 2020 was -2.8% against 4.5% in 2019
EC and NBP forecasts assume a strong GDP growth in the coming years in the range of 3.3%-3.8% in 2021 and 4.0%-5.1% in 2022. The pace of economic recovery will depend on progress made in the fight against the pandemic, including in particular the number of performed vaccinations, which will allow the lifting of restrictions in the field of economic activity Economic growth in the short term may translate into increased demand for electricity. However, a high pressure on rising electricity costs (CO2 costs, distribution charges, support schemes), increasing energy efficiency and a rapid reduction of costs of constructing own RES sources will have a negative long-term impact on the demand for energy in the NPS. In addition, in the course of the energy transition, the scale of activity of certain energy-intensive branches of the economy, e.g. the mining industry, should significantly decrease
Due to intensified cost pressures from various sources, price indices increased strongly in 2020, reaching an average of 3.4% for consumer inflation (CPI). The November 2020 NBP forecast assumes that the CPI will stabilise at 2.6%-2.7% in the years 2021-2022 In the longer term, lower levels of demand and changes to the energy mix may translate into a lower electricity price on the wholesale market and, in particular, a negative impact on the economics of coal-fired power generation
The industrial PMI has remained above 50 points since July 2020 with a gentle upward trend, which indicates a moderately positive outlook for the manufacturing sector No change is expected in Poland’s long-term credit risk rating in PLN and foreign currencies, which, with other factors unchanged, should remain neutral for the costs of financing investment programmes. In connection with the anti-crisis measures taken by central banks, the availability of debt financing should be maintained
A major challenge will be to increase the level of investment, which has long been a factor holding back economic growth. There will be a major opportunity in this element, linked to the use of EU funds for the transformation of the economy An increase in the price indices of construction and assembly works as well as cost pressures in the specialised construction segment may result in higher expenditures for the execution of the planned investment programme and higher costs of external services. The structural shortage of qualified employees, as well as periodic stoppages resulting from pandemic emergencies, may cause delays in the implementation of investment and overhaul tasks
TRENDS IN ELECTRICITY AND FUEL MARKETS Coal production and consumption are expected to increase in 2021, but only due to the low base of 2020, where the peak of the COVID-19 pandemic occurred. In the longer term, continued downward pressure on coal consumption and production is assumed as a result of structural changes in the power generation sector and a shift away from the use of solid fuels in households, which should translate into lower domestic coal prices The new natural gas supply potential enables the development of the Dolna Odra power plant based on the CCGT technology
A systematic increase in demand for natural gas in Poland and the region is expected in view of new investments in natural gas-fired power generation units and high-efficiency cogeneration units as well as a gradual change in the fuel mix in Germany The capacity market is an opportunity for a gradual transformation of the power structure in the NPS towards the construction of highly efficient base-load power generation units, flexible peak sources, and a gradual decommissioning of units which do not meet environmental requirements
Changes in the energy market model:
  • implementing the capacity market mechanism,
  • introducing changes to the balancing market rules in two phases, at the beginning of 2021 and 2022,
  • introducing changes in establishing energy prices for end users,
  • implementing regulatory solutions dedicated to distributed power generation,
  • implementing the Flow Based Market Coupling mechanism for trade on the synchronous link at the end of 2021. This mechanism enables the best economic use of available transmission capacities between countries,
  • Greater commercial availability of electricity in neighboring markets will still significantly affect the level of electricity imports to Poland, limiting the increase in the price level on the wholesale market and the burden on PGE Group units,
  • Development of natural gas supply possibilities to Poland (expansion of the LNG terminal, Baltic Pipe project, infrastructure projects of LNG exporters),
  • Increasing commercial opportunities on transmission connections with Germany along with the completion of grid investments resulted in an increase in net imports of electricity to 13.1 TWh in 2020.
The greater commercial availability of electricity on the neighbouring markets will continue to have a significant impact on the level of electricity imports to Poland, limiting price increases on the wholesale market and the burden on the PGE Group companies
The Development of possibilities to supply natural gas to Poland (the expansion of the LNG terminal, the Baltic Pipe project, infrastructural projects of LNG exporters) The new natural gas supply potential enables the development of the Dolna Odra power plant based on the CCGT technology
The increase of trading possibilities on transmission interconnections with Germany together with the completion of network development projects resulted in an increase of net imports of electricity to 13.1 TWh in 2020 An increase in natural gas import capacities will affect the possibility of executing investment projects based on the CCGT technology and the new support system

Technological and social changes (demographic and cultural). Energy policy – Polish and European.


The growing competitiveness of wind (including offshore) and photovoltaic technologies, which is confirmed by prices achieved in RES auctions and the rising number of micro-installations Increasing the competitiveness of new RES installations affects their development and changes the working conditions of older conventional units
In some countries, the dynamic dissemination of full-scale, new energy storage technologies, providing, among other things, regulatory services to the electricity systems or enhancing local security of energy supply, is clearly visible The falling costs of the offshore technology enable it to be used to maintain the PGE Group’s leading position in generation with a significantly reduced average level of the portfolio’s carbon footprint
The systematic development of prosumer power generation and the dynamic growth in the number of micro-installations The commercialisation of energy storage on an industrial scale will enable better use of RES, complementing conventional capacities in the role of system balancing and improving local energy security
The development of electromobility With the development of prosumer power generation, the variability of network operating conditions at the local level increases, which means the need to invest in infrastructure (connections, modernisations), while limiting the volume of distributed electricity. In the conventional power generation segment, there is a higher demand for highly flexible generation units in order to balance distributed power generation
The development of information and telecommunications technologies for new applications in the energy sector The development of electromobility will increase demand for electricity and change its daily profile, which may slightly alter the operating conditions of some conventional units. However, this development requires investments in the development of grid infrastructure and charging points, as well as a charging management system. It is also possible to use batteries in electric cars as storage facilities for energy produced by RES
The PGE Group’s use of new technologies and the potential of data resources may allow it to develop in new roles and areas of activity, as well as improve its operational efficiency

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