Energy security
Providing energy security has multiple dimensions: relates to both on-going operations and long-term investment plans.
Generation units from the Conventional Generation, District Heating and the Renewables segments are deployed in ensuring energy security. The Distribution segment also plays an important role.
Energy system foundation
The deployment of generation units in the National Power System depends on energy demand, which fluctuates around the clock and changes seasonally. The Transmission System Operator issues work or stand-by orders to generation units in accordance with the rule that units with the lowest variable cost are deployed first. As demand grows, the operator engages further (increasingly expensive) generating units, thereby increasing the wholesale price of energy.
PGE Group has in its portfolio generating units operating on lignite that, owing to their cost advantage and access to their own fuel, are engaged by the operator also during off-peak hours, in practice 24 hours a day, all week long, which accordingly translates into production volumes and economies of scale in the operation of power generating complexes.
Hence, the availability of PGE’s generating assets directly affects energy security and a competitive price of energy for the Polish economy.
Ancillary system services
PGE Group’s generating fleet is distributed throughout the country, which is why we are an important partner for the Transmission System Operator. The operator’s role is to balance the system, i.e. to match demand for electricity with electricity supply.
The most important services provided by PGE Group to the Transmission System Operator in 2023
Reallocation of capacity, i.e. ensuring efficient operation of generating units in the National Power System.
Use of pumped-storage plants to ensure equilibrium of capacity balance and the quality parameters of energy. Pumped-storage power plants are activated at the operator’s request and depending on the needs they can either generate or receive energy.
Demand side response (DSR) – if a shortage or lack of reserves takes place in the system, the Operator may try to reduce demand, which consists of voluntary limiting energy intake by energy-intensive customers (e.g. lignite mines).
PLN 1 715 Million
PGE Group’s revenue from ancillary system services in 2023
These revenues constitute stable part of the Group’s revenues, and with the launch of the capacity market, their role increases even more. Thus, PGE’s exposure to the electricity market becomes relatively lower.
Capacity market
The Capacity Market was entered into operation from 2021. In November and December 2018, three auctions were held – for the periods starting in 2021, 2022, 2023. The main auction for 2024 took place in December 2019, the main auction for 2025 took place in December 2020, the main auction for 2026 took place in December 2021, the main auction for 2027 took place in December 2022 and the main auction for 2028 took place in December 2023. The additional auctions took place in March 2020, 2021, 2022 and 2023 – concerning deliveries for the particular quarters of 2021, 2022, 2023 and 2024.
As a result of the above auctions, the PGE Group concluded agreements, securing a revenue of more than PLN 2.5 billion per annum during the 8-year period (2021-2028). Multiyear auctions concern new units (at Opole, Turów, Dolna Odra and Rybnik power plants) or modernized ones. New coal-fired units (Opole, Turów) benefit from 15-year contracts. Low-emission units (like Dolna Odra or Rybnik) benefit from the extension of the contracted capacity supply period by 2 years i.e. 17-year contracts.
Significance of the capacity market for our investments
PGE Group is engaged in long-term projects. The construction of new generation capacities and their diversification are some of the key objectives in the Group’s strategy.
The profitability of investments in generation assets cannot be based solely on the volume of energy produced, but requires an additional support system.
The solution is the capacity market in which generating units are remunerated not only for the volume of energy produced but also for their willingness to supply it. Obtaining 17 years of support for the construction of new gas-fired capacity at the Dolna Odra plant and at Rybnik power plant will provide a solid rate of return on investment, while guaranteeing stable revenues.
Electricity distribution
Delivering electricity to customers is no less important than producing it. As Distribution System Operator, we are responsible for the reliability of energy supplies in the eastern and central parts of the country. We deliver energy to end customers over high-, medium- and low-voltage grids.
Ensuring energy security means, above all, continuously maintaining the distribution network in proper shape, conducting essential modernisations and immediately removing failures caused by forces of nature.
We want interruptions in energy supply to be as short and infrequent as possible.
The quality of distribution services is measured using generally accepted indicators – SAIDI and SAIFI.
- System Average Interruption Duration Index (SAIDI)
- System Average Interruption Frequency Index (SAIFI)
The President of the Energy Regulatory Office requires distribution system operators to systematically improve quality indicators, tying this to the level of regulated revenue. The process includes the option to adjust network operators’ remuneration due to objective difficulties caused by weather conditions.
In years 2019-2023, the does not include outages on LV networks">SAIDI and does not include outages on LV networks">SAIFI indicators and the time to connect new customers to the grid were as follows.
SAIDI (minutes/customer)
SAIFI (unit/off-taker)
Connection time (days)
PGE Dystrybucja is committed to improving the reliability of supply and lowering the does not include outages on LV networks">SAIDI and does not include outages on LV networks">SAIFI indexes, and takes a number of measures that result in faster and more effective troubleshooting of power failures. In 2023, the does not include outages on LV networks">SAIDI index is lower compared to 2022 by 182 minutes per customer and the does not include outages on LV networks">SAIFI index has decreased by 0.91 interruptions per customer. The increase in the number and scope of investment projects had the effect of increasing the average duration of scheduled outages for energy supply by approximately 6 minutes/customer compared with the previous year. The reduction in the does not include outages on LV networks">SAIDI and does not include outages on LV networks">SAIFI indexes in 2023 was due, among other things, to the effects of the execution of investment tasks under the MV Grid Cabling Programme (PK30), as well as a number of other tasks improving the reliability of the grid and increasing power supply reliability for both households and businesses.
Additionally, an important aspect is that 2023 was a milder year in terms of weather conditions in Poland compared to previous years. The negative impact of the weather was mainly noticeable in January, February, August, October, November and December, where failure rates increased significantly as a result of extreme adverse weather conditions, such as rime, icing, heavy snowfall and gusty winds.
Impact of war in Ukraine on PGE Group’s activities
PGE CG is the largest energy group in Poland.
>40 %
of the country’s electricity demand supplied by PGE Group’s units
>5,5 million
customers in Supply segment
<40 %
of Poland’s territory – PGE Group’s distribution area
The Group’s activities are therefore of exceptional importance for the country’s energy security. It is crucial for PGE Group to secure the continuity of operation of power plants and CHPs and distribution infrastructure so as to ensure uninterrupted supplies of electricity and heat to residents, institutions and businesses.
In connection with the situation in Ukraine, a Crisis Team has been established at the central level of PGE Group to continuously monitor threats and identify potential risks. The Crisis Team’s work includes monitoring the security of electricity and heat generation and supply and the protection of critical and IT infrastructure. Its tasks also include undertaking actions minimising the risk of a crisis situation, preparing the Company in the event of a crisis situation and planning, organising and coordinating works ensuring continuity of the Company’s and PGE Group’s operations.
Cybersecurity has grown significantly in importance in the current geopolitical situation. PGE Group has implemented special procedures for monitoring Information and communication technologies (ICT) networks due to increased activity of criminal groups aiming to attack ICT and Operational Technology (OT) systems. Incidents are regularly identified: phishing, attempts to install malware and DDoS attacks (Distributed Denial of Service). Safeguards adequate to the changing risks are being implemented.
The physical security of the Group’s facilities also has been strengthened.
