Goal 1

We undertake to provide access to electricity and heat for our customers using diversified generation capacity, including RES

TAURON Group’s task is to provide Poland’s population with access to electricity and heat using diversified methods of the generation thereof. Looking after ecology and climate in the production process we are also using renewable energy sources.

In 2013 we accomplished the assumed goal 
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  • We commissioned two wind farms with the total capacity of 122 MW in 2013;
  • Net electricity production reached 19.39 TWh, including 1.38 TWh (7.1 percent of our total electricity output) from renewable sources;
  • We are seeking new ways to diversify the generation portfolio – we expressed the wish to participate in the construction and operation of Poland’s first nuclear power plant.

TAURON Group is Poland’s second largest electricity producer, with its generation assets located in attractive south-western region of the country. Its attractiveness is related to the company’s assets’ location in close vicinity of hard coal mines, and also to access to Poland’s most advanced part of the transmission system. Both these factors have an impact on reliability and ensuring energy supply security, and thus maintaining competitive advantage versus other players on the energy market.

A natural step towards ensuring energy supply security are investments in current and future generation capacity. Since the dispute between Thomas Edison and Nikola Tesla – direct current (DC) versus alternate current (AC) – and the triumph of greater usefulness and ability to use the direct current the power industry began to advance in earnest. The way electricity and heat are generated has not changed over the years, however improvements and technological modification have substantially increased the efficiency of this process. Taking into account economic factors (cost effectiveness), generation efficiency and also the age of our generation assets, we continue to invest in upgrades and construction of new units.

Installed capacity broken down by primary energy source and by regulatory systemTAURON WytwarzanieTAURON CiepłoTAURON EkoenergiaTOTAL
Installed capacity in MW by fuel type: 4 865 1 775 316 6 956
Hard coal 4 644 980 0 5 624
Natural gas 0 7 0 7
Metallurgical (steel production) gases 165 418 0 583
Biomass 0 370 0 370
Wind 56 0 183 239
Hydro 0 0 133 133
Installed capacity by generation unit type: 4 865 1 775 316 6 956
Power plants (MWe) 4 731 0 316 5 047
Combined Heat and Power Plants (MWe) 134* 300 0  
Combined Heat and Power Plants (MWt) 1255 0  
Heat plants (MWt) 0 220 0 220

* aggregated data

We produce electricity using, among others, our own hard coal resources. As one of two electric utilities TAURON has hard coal mines in its value chain, therefore it is working on ensuring energy supply security from the very beginning of the process. 2 coal mines owned by the group – ZW Janina in Libiąż and ZW Sobieski in Jaworzno – jointly provide access to 20 percent of Poland’s hard coal resources.

csrTAURON Group is one of Poland’s largest hard coal buyers. Approximately 90 percent of the company’s electricity generation is based on this fuel, therefore new investments in the mining segment and long term supply contracts provide a guarantee of coal availability. Approx. 37 percent of TAURON Group’s yearly demand for hard coal was satisfied from its own coal mines in 2013. The balance is covered by supplies from external sources. On March 1, 2013 TAURON Polska Energia signed an agreement with Kompania Węglowa for the supply of hard coal for the Group’s subsidiaries valid until the end of 2015. This agreement can cover approx. 48 percent of the Group’s demand for this commodity. Hard coal suppliers are also Katowicki Holding Węglowy and Jastrzębska Spółka Węglowa. TAURON Polska Energia is also bound by long term contracts with these companies.

The latest International Energy Agency’s report indicates that already in 2017 hard coal can become the most important commodity satisfying mankind’s demand for energy. We are observing global trends move to the European and domestic markets, this is why TAURON Group continued its construction of Grzegorz shaft at Sobieski Coal Mine. This project is of strategic importance for the operations of TAURON Wydobycie – it will ensure continuity and security of hard coal supplies in the future. The second investment project is the construction of the 800 m extraction level at ZG Janina coal mine. This project, apart from improving the mining process efficiency, extending the coal mine’s lifecycle and increasing the company’s generation capacity, will enable extracting hard coal deposits that currently are not available due to their depth.

The other materials used to generate electricity are biomass, natural gas and metallurgical  (steel production) gases. In order to ensure fuel supply for its production needs TAURON Group acquires biomass under long term and one year contracts from domestic producers and suppliers. High methane content natural gas is used to generate electricity by two units – Elektrownia Stalowa Wola and Zespół Elektrociepłowni Bielsko-Biała EC1. Meanwhile metallurgical (steel production) gases are used by TAURON Ciepło combined heat and power plants, located next to ArcelorMittal Poland’s steel works.

Commodities and materials used by TAURON Group’s subsidiaries are presented in the below table:

Materials used by weight or volumeTOTALTAURON WydobycieKW CzatkowiceTAURON Wytwarzanie TAURON Ciepło
Non-renewable materials used by weight or volume, including:          
Gross hard coal (t) 7 879 449 7 879 449  0 0 0
Net hard coal (t) 10 074 593 0 1 664 9 253 531 819 398
Gas (m3) 8 781 660 0 2 036 100 5 369 910 1 375 650
Heating oil (t) 34 521 0 0 33 938 583
Blast furnace gas (m3) 2 544 999 620 0 0 0 2 544 999 620
Convertor gas (m3) 94 759 857 0 0 0 94 759 857
Coke gas (m3) 521 942 846 0 0 412 446 000 109 496 846
Diesel oil (m3) 2 363 1 187 1 176 0 0
Limestone (t) 1 889 316 0 1 862 202 0 27 114
Renewable materials used by weight or volume, including:          
Biomass (t) 734 564  0 0 449 314 285 250
Agro (t) 303 539  0 0 238 659 64 880
Forest (t) 431 025  0 0 210 655 220 370
Wood (t) 4 293  4 293 0 0 0

csrWe are investing in new generation capacity, opting for their diversity. At TAURON Group electricity is generated by three subsidiaries – TAURON Wytwarzanie, TAURON Ciepło and TAURON Ekoenergia. Taking into account the goals with respect to sustainability, national and EU policy, worldwide trends and first of all customers’ expectations, we are producing electricity using diversified generation assets. Apart from generating electricity in a conventional manner TAURON Ekoenergia is responsible for generating electricity from renewable energy sources, i.e. wind farms and hydroelectric power plants.

Kopalnia Wapienia Czatkowice uses electricity for its own needs and to produce limestone meal and sand for the needs of our power plants, as well as crushed rock gravel and aggregates for a number of industries

Total consumption of energy within the organization TAURON WytwarzanieTAURON CiepłoTAURON EkoenergiaKW CzatkowiceRAZEM
Total consumption of energy from non-renewable sources in GJ, including:          
Hard coal 181 776 611 16 027 061 0 30 808 197 834 480
Natural gas 7 349 123 45 400 0 80 426 7 474 949
Heating oil 1 400 000 24 131 0 0 1 424 131
Metallurgical (steel production) gases 0 11 286 686 0 0 11 286 686
Total consumption of energy from renewable sources in GJ, including:          
Biomass 6 160 942 2 928 222 0 0 9 089 164
Wind 0 0 40 975 0 40 975
Hydro 0 0 26 276 0 26 276
Total consumption including:          
Total electricity consumption [MWh] 2 018 187 329 354 18 681 20 810 2 387 032
Total heat consumption [GJ] 785 486 2 183 371 0 17 901 2 986 758
Total sales, including:          
Total electricity sales [MWh] 0 1 184 949 613 516 0 1 798 465
Total heat sales [GJ] 0 6 864 663 0 0 6 864 663
Total steam sales 0 634 857 0 0 634 857

The company’s generation potential allowed for 2013 net electricity and heat production to reach:

Net production of energy in GWh (GJ, in case heat is the second product), broken down by primary energy source and by regulatory regimeTAURON Ekoenergia [GWh]TAURON Wytwarzanie (GWh)TAURON Ciepło [GWh]TAURON Ciepło [GJ]
Net production of energy in GWh (or GJ), by type of fuel used: 614 17 804 7 499 520 1 185
Hard coal 0 17 054 5 702 888 5 199 741
Coal sludge 0 0 301 367 459 315
Lignite 0 0 0 0
Natural gas 0 559 40 815 0
Metallurgical (steel production) gases 0 0 2 014 227 2 076 988
Biomass 0 190 1 058 170 1 522 370
Wind 243 0 0 0
Hydro 371 0 0 0
Liquid fuels 0 0 17 610 4 273

Planned capacity against projected electricity demand over the long term, broken down by energy Source and regulatory regime TAURON WytwarzanieTAURON CiepłoSUMA
Capacity (MW) of planned generation units, including purchases of electricity from external sources and reserve capacities, including units under construction and investment plans, by energy source: 4 707 155 4 862
Hard coal 4 474 65 4 539
Lignite 0 0
Natural gas 165 90 255
Biomass 68 0 68

Due to electricity demand forecasts and capabilities of the National Power System a key challenge for the sector are capital expenditures in new generation capacity. With our overall objective to ensure energy supply security in mind we commenced the construction of new units and upgrades of the existing facilities. Our sustainability strategy covers the outlook until 2020. This means that the implementation of TAURON Group’s plans coincides with the participation in the implementation of Europe 2020 strategy , with one of its goals being the prevention of climate changes and sustainable energy consumption.

Stakeholders’ expectation

Present what impact the company’s new investment projects have on increasing energy supply security and reducing CO2 emission.

Prove that investments in generation infrastructure made by TAURON Capital Group are in line with the concept of generating clean energy from hard coal that should be promoted by the company.

Europe 2020 strategy recommendation
GREENHOUSE GAS EMISSIONS SHOULD BE REDUCED BY 20 PERCENT VERSUS 1990 LEVELS.  

TAURON Group’s activities

In line with regulatory changes and market trends TAURON Group is carrying out a number of investment projects that will have a positive impact on the stability of the National Power System, and the company will also be actively involved in implementing the above mentioned Europe 2020 strategy recommendation. TAURON Group’s corporate strategy assumes developing a balanced generation portfolio with units based on hard coal and gas technologies as well as renewable energy sources. The below investment projects  are in line with the assumed goals.

TAURON Wytwarzanie:

  • Construction of a 910 MW unit at Jaworzno is a project that will strengthen the Group’s position as Poland’s second largest electricity generator and it will also allow for substantially renewing and upgrading its generation potential. The use of modern technologies will lead to the reduction of the emission of pollutants – assumed CO2 emission reduction level is 2 million tons per annum;
  • Construction of a 413 MWe and 266 MWt unit at Łagisza Power Plant will allow for ensuring security of heat supply for Będzin, Czeladź and Dąbrowa Górnicza. The unit will be characterized by high efficiency (approx. 58 percent), no dust emission, low emissions of sulfur dioxide, nitrogen oxides and carbon dioxide;
  • Construction of a power generation unit (50 MW) at ZEC Bielsko-Biała is a key investment project for the local community because it covers almost 100 percent of the demand for electricity and heat of the residents of the city and its surrounding area. Additionally, it is Poland’s second unit to be equipped with a heat accumulator;
  • Construction of a CCGT unit at Stalowa Wola – as a result of the investment project underway Poland’s largest combined heat and power CCGT plant is built. The use of gas as a fuel, being more ecological than hard coal, also contributes to the accomplishment of the assumed goals.

TAURON Ciepło:

  • Construction of new co-generation capacity (50 MWe and 86 MWt) in Tychy is an investment project that enables adapting the generation unit to comply with more stringent emission standards that will come into force staring from 2016. As a result of actions taken Zakład Wytwarzania Tychy will continue to be the main heat producer for the customers from the Tychy metropolitan area.

Europe 2020 strategy recommendation
20 PERCENT OF ELECTRICITY SHOULD COME FROM RENEWABLE ENERGY SOURCES  

TAURON Group’s activities

Apart from biomass burning and co-burning TAURON Group is also investing in hydroelectric power plants and wind farms. Two wind farms were commissioned in 2013 – Marszewo (82 MW) and Wicko (40 MW). Both investment projects constitute another step in the implementation of the strategy to diversify the company’s asset portfolio by adding renewable energy sources – the percentage of green energy reached 7.1 percent in 2013, i.e. an increase by as much as 12 percent year-on-year.

TAURON Ekoenergia CAPEX plans assume:

  • Increasing wind farms’ installed capacity up to 800 MW in 2023 as a result of constructing or purchasing projects and ready-made installations;
  • Increasing hydroelectric power plants’ installed capacity up to 141.4 MW by 2023 as a result of upgrading the existing generation sources.

The identified risk of all investment projects underway is a potential problem related to connecting new generation capacity to the national power grid due to the constraints and lack of the grid infrastructure’s expansion (upgrades). This threat is particularly relevant in case of investments in renewable energy sources.

Europe 2020 strategy recommendation
ENERGY EFFICIENCY SHOULD RISE BY 20 PERCENT 

TAURON Group’s activities

In increasing the generation process efficiency we see not only the path towards achieving compliance with the recommendation, but first of all opportunities to achieve real savings. The primary efficiency measure is the energy intensity of the process. This is the area we constantly focus our efforts upon.

Energy intensityTAURON WytwarzanieTAURON EkoenergiaTAURON Ciepło
Energy intensity ratio 10.29% 2.99% 14.50%
Information on types of energy used to calculate energy intensity ratios: fuels, electricity, heat, cooling, steam, other Electricity Electricity Electricity and heat

As a consequence of completing numerous upgrades and repairs in the first tender of the Energy Regulatory Office for the selection of projects aimed at improving energy efficiency in 2013 TAURON Wydobycie and TAURON Ciepło acquired energy efficiency certificates commonly called white certificates. In the second tender activities aimed at reducing energy consumption were submitted by TAURON Wydobycie, TAURON Ciepło, TAURON Dystrybucja and TAURON Sprzedaż.

More than 80 percent of TAURON Group’s generation assets use hard coal in the production process. Current trends do not indicate that hard coal based electricity generation technology should cease to play a major part not only in the Polish energy sector but also worldwide. Additionally, taking into account the outlook until 2016 which, according to forecasts, is the first year of expected capacity deficit, hard coal fired units provide energy supply stability and security. It is particularly important also in the context of further growth of renewable energy sources and development of the prosumers’ power generation model, trends that have an impact on the operation of the power system. However it is not possible to ensure energy supply security unilaterally. Being a part of a large power system requires cooperation with various entities. In order to prevent difficulties in satisfying the demand for capacity by domestic generation units TAURON Group, apart from many investment projects conducted, concluded with Polske Sieci Elektroenergetyczne (TSO) an agreement for the purchase of the cold intervention reserve service. Providing such service involves the transmission system operator dispatching TAURON Group’s generation capacity and using it to balance the load (power) in the system in case such intervention is required, which is to help maintain the security and stability of the National Power System past 2015.

In 2013 TAURON Polska Energia also agreed on the rules of cooperation with: PGE, KGHM Polska Miedź and ENEA, with respect to potential ownership structure and principles of operations of PGE EJ 1, special purpose vehicle set up to build and operate Poland’s first nuclear power plant. Ultimately TAURON is to own a 10 percent stake in the company’s share capital.

Additionally, TAURON Polska Energia and TAURON Wytwarzanie are making sure that they raise their competences with respect to nuclear power generation. Our personnel participated in two editions of post graduate studies in this field. Employees of TAURON Polska Energia are active on the European Nuclear Energy Forum (ENEF) created by the European Commission.

We believe that all efforts undertaken by TAURON Group have a positive impact on increasing Poland’s energy supply security and diversification of generation sources.