Dear Sirs and Madams,
the Polish energy industry is subject to transformations and energy companies need to adjust its business models to the volatile reality. To secure Enea Group’s further development and prepare it to new market challenges, a corporate development strategy until 2030 was adopted in September 2016. New Enea is a flexibly operating process-based organisation which takes an active part in positive changes occurring in the Polish economy. It is not only a reliable electricity supplier, but also a leading supplier of integrated commodity and energy related products and other innovative services for a wide range of Customers, recognised for the quality, comprehensiveness and reliability.
We invest in modern sources of generation and modernise the existing ones
Commissioning of a modern supercritical 1,075 MWe unit in Kozienice Power Plant is our priority. The whole investment, comprising ca. 30 thou. detailed tasks, is already over 94% advanced. What is of a high importance for the implementation of the objectives foreseen in Enea Group’s strategy, is investments which we commenced at the end of 2016, i.e. closing, in March 2017, the acquisition of Połaniec Power Plant and announcement of a tender for the construction project, jointly with Energa, of Ostrołęka C Power Plant. The new unit of ca. 1,000 MWe capacity and efficiency of at least 45% in Ostrołęka Power Plant will be another, stable, high-performance and low-emission source of energy based on its own raw material in the Public Power System. On the other hand, the new technologies applied in it will allow to fulfil the current Community requirements related to the environmental protection. Realising Ostrołęka C Power Plant project we will use our knowledge and experience gained on the construction of the new unit in Kozienice Power Plant. Concurrently, we are implementing the modernisation programme for the existing generation assets in Kozienice Power Plant and Białystok Heat and Power Plant, increasing their operating efficiency and considerably limiting their impact on the environment.
We develop and strengthen our market position in the mining and generation area
In mid-March 2017 Połaniec Power Plant as one of the youngest and most modern system power plants in Poland with one of the biggest and most modern biomass-fired units in the world joined Enea Group.
During the recent years it has been thoroughly and consistently modernised. It implemented a ca. PLN 1.5 bln worth of an intensive modernisation programme, extending its operation by 20 years, increasing the efficiency of energy generation and adjusting generating equipment to the environmental standards in force, including to the requirements of IED directive. Therefore, it constitutes valuable assets for Enea obtained at an optimum price. Połaniec Power Plant is a very efficient unit, generating good financial results.
It has much in common with Kozienice Power Plant owned by Enea. Both power plants are very important to the Polish power system security and generate energy using 200 MW units. With an almost 24 TWh potential we will become the second electricity producer in Poland.
We are building optimum synergies and increasing the Group’s effectiveness
An efficient model of integrating the mining and generation areas is one of the key tasks of a vertically integrated commodity and energy groups which include Enea. The added value of Połaniec Power Plant acquisition is cost and operating synergies which we will be able to effect thanks to the cooperation between the area of generation, i.e. Kozienice and Połaniec power plants, and the area of mining, i.e. LW Bogdanka. Due to the finalisation of the acquisition two major customers of the Lublin mine are now included in Enea Group’s structures, which is an extremely important element for the realisation of the development strategy presented in February 2017 by Bogdanka relating to Enea Group’s Area of Mining until 2025 (with the perspective until 2030). LW Bogdanka’s strategy will be implemented in a flexible development scenario. It assumes an annual average volume of production in 2017-2025 on the level of ca. 9.2 mln tonnes. Kozienice-Bogdanka-Połaniec mining and generation area located in south-east Poland will also guarantee a further improvement in the energy generation efficiency in Enea Group and will strengthen the position on the market.
We are enhancing the potential and reliability of electricity supply
Enea Group’s development strategy foresees increasing electricity sales to end Customers to the level of 20.1 TWh in 2025 (growth by 24.4% in relation to 2015). Building appropriate synergies of mining and generation assets based on LW Bogdanka and modern generation capacity of Enea Group, will enable us to appropriately balance and secure energy supplies to our Customers and develop further. In 2016 we also carried out the intensive programme of modernisation and development of the distribution network. We allocated over PLN 900 mln for that objective. These activities substantially contributed to the improvement of the energy security in the whole region serviced by Enea Group. We improved the indices which qualitatively define the duration and number of interruptions in energy supply: SAIDI - by 44% yoy and SAIFI - by 30% yoy. It is also worth underlining that last year we realised as much as 15% more contracts relating to connecting new customers to the grid than in 2015. Enea Operator applies for support in the implementation of its investments from the Community funds. Last year, the subsidy granted to the Company amounted to over PLN 250 mln.
Multi-service Enea of the future – Customer in the centre of attention
The importance of the civil power engineering and the Customer’s position is growing, thus, apart from a competitive price of energy and constant improvement of the quality of provided services, we are extending our portfolio with additional packages. Already now, we offer many additional services, such as electrician assistance or medical care which are being sold together with electricity. In November 2016, we launched a new offer - Energy+ Photovoltaics. It includes a comprehensive Customer service with audit and selection of an optimum photovoltaic installation. We intend to develop in this direction. We want Enea to become a multi-service company with a diversified portfolio of services adjusted to the needs of its Customers. We intend to actively participate in the development and operation of energy clusters, firstly in the area of Enea Operator’s operations. Clusters constitute a chance for the development of new services provided by Enea Group and a possibility of preparing it for future market needs.
Human potential and innovation are our priorities and we are building a flexible process-based organisation
We are increasing our activity in the field of innovation, and see the power and future in further development of the human potential. The Generation Change Programme was launched with the objective to build a systemic process securing the appropriate level of inflow and maintenance of the competence during the next years. Through functional changes we are pursuing the development of an organisational culture which will not only support the corporate development but will also meet Employees’ expectations as regards raising the competence and satisfaction of work in Enea Group.
We want to develop stable and attractive work places for the existing and prospective Employees within the consolidated Group. We are creating an innovative ecosystem being part of the national economy development programme. Over 50% of 60 initiatives defined in the strategy focus on innovations. It demonstrates how Enea is particular about the development of innovative approach in all the aspects of its operations. The Group wants to be the co-author of the innovation ecosystem in Poland. An example of such an approach may be a potential investment in a modern unit in the technology of clean coal, the so-called IGCC (Integrated Gasification Combined Cycle) with the capacity of 300 - 500 MW, which could be located near Bogdanka. Poland holds rich resources of bituminous coal, its gasification is one of the most far-reaching energy technologies based on this fuel. The Company takes also an active part in the works for the development and building of the e-mobility infrastructure in Poland. Electromobility is one of the areas which will have impact on the future shape of the electricity market, thus the decision on the establishment, jointly with PGE, Energa and Tauron, a dedicated company - ElectroMobility Poland. We also join the works related to the pursuit of increasing the number of electric buses in Polish cities and communes within the existing systems of mass communication.
The Group’s financial security - key task
The optimisation of all the business processes occurring in the organisation, so that to take benefit of its potential, is a priority for us. The implementation of the scheduled investments on the other hand guarantees its continuous growth. Each project is analysed and individually assessed. It must have an economic justification and enhance the Group’s value for its stakeholders. Consistently, we take care for the level of costs, carrying out saving programmes. The Group’s financial security is the most important for us. Due to the stable financial situation and generated solid results, the financing of our further development is guaranteed under favourable conditions.
We take care for a balanced development and dialogue with the Society
We foresee a strong support of the local growth and building lasting local social relations, which are an important element of the responsible business policy for us. We will take care for the development of individual regions in Poland, acting as an attractive employer, but also as an entity strengthening the social development, supporting local vocational education. One of our priorities is also continuation of the open and constructive dialogue with the Society which enables building a wide social consensus around values and issues fundamental for our Group’s development.
President of the Management Board of Enea SA