Core products, goods and services

The core products, goods and services of TAURON
Polska Energia S.A.

As the parent entity of TAURON Capital Group, TAURON performs the consolidating and management function at TAURON Capital Group. As a result of implementing the Business Model and centralizing of the functions, TAURON concentrated a number of competences related to the functioning of TAURON Capital Group’s subsidiaries and it was carrying out operations, among others, in the following areas in 2022:

  • wholesale trading in electricity, gas and the related products, in particular, with respect to providing trading (commercial) services for the subsidiaries, securing the requirements with respect to fuel, CO2 emission allowances and the Guarantees of Origin (GOs) of energy (energy certificates),
  • management of the portfolio of electricity, CO2 emission allowances and Property Rights,
  • purchasing management,
  • finance management
  • asset management,
  • corporate risk management,
  • managing the IT model in place,
  • coordinating the research and development (R&D) activities carried out within TAURON Capital Group,
  • advisory services with respect to accounting and taxes,
  • legal support services,
  • audit.

Transfer of assets to NABE

As a result of the transfer of ownership of 100% of the shares of TAURON Mining to the State Treasury as of December 31, 2022, and the participation of TAURON Group’s subsidiaries in the process of spinning off the coal fired generation assets to NABE in the fourth quarter of 2022, some of the functions related to electricity trading and coordination of fuel supply were transferred to the TAURON Wytwarzanie subsidiary.

The core operations of the Company, apart from managing TAURON Capital Group, include the wholesale electricity trading on the territory of the Republic of Poland, based on the license for trading in electricity issued by the President of the ERO (Energy Regulatory Office) for the period from June 1, 2008, until December 31, 2030.

The Company is focusing on purchasing and selling electricity for the purpose of securing (hedging) the buy and sell positions of TAURON Capital Group’s entities as well as on the wholesale electricity trading. The Company purchased and sold 45.6 TWh of electricity in 2022. Electricity sales carried out by TAURON during that period were mainly addressed to the following subsidiaries: TAURON Sprzedaż and TAURON Sprzedaż GZE sp. z o.o. (TAURON Sprzedaż GZE), with 72.2% of the electricity volume purchased sold thereto. The above mentioned subsidiaries are carrying out the retail electricity supply to the final consumers, and therefore TAURON is not dependent on any single electricity consumer. The next largest electricity purchasers, in terms of electricity volume purchased, are the Exchange Clearing House (Izba Rozliczeniowa Giełd) (14.4%), TAURON Wytwarzanie (6.5%, including 5.6% for Nowe Jaworzno Grupa TAURON during the time frame from January 1, 2022, to September 30, 2022, as of October 1, 2022, the subsidiary became a part of TAURON Wytwarzanie), TAURON Capital Group’s others subsidiaries (4%), including TAURON Ciepło, TAURON Ekoenergia, TAURON Czech Energy s.r.o. (TAURON Czech Energy) and EC Stalowa Wola, as well as Polskie Sieci Elektroenergetyczne S.A. (PSE) (2%) and TAMEH POLSKA (0,8%).  

Pursuant to the concluded SLA contracts with respect to the trading operations, TAURON is providing, among other things, the electricity and property rights portfolio management service as well as the market access service, as part of which it is operating on the Polish Power Exchange (Towarowa Giełda Energii S.A. – TGE) on its own behalf for the benefit of TAURON Wytwarzanie, TAURON Ciepło and, until September 30, 2022, Nowe Jaworzno Grupa TAURON (currently TAURON Wytwarzanie), fulfilling the power exchange electricity trading obligation for those subsidiaries.

However, having in mind the process related to TAURON Capital Group’s transition and the planned spin-off of the hard coal fired generation assets out of TAURON Capital Group, as part of the Government NABE Concept’s implementation, under way, in July 2022 the relevant annexes to the existing SLA contracts were concluded to ensure the continuity of the services provided and a decision was made to terminate the provision of the market access service for the benefit of TAURON Wytwarzanie.

The Company’s additional operations include the wholesale trading in natural gas on the territory of the Republic of Poland based on the license for trading in the gas fuels issued by the President of the ERO on April 27, 2012. The original effective term of the license had commenced on May 4, 2012, and had expired on May 4, 2022. On March 11, 2021, the President of the ERO made a decision to change the effective term of the license and extend it until June 30, 2035. In 2022 the Company purchased and sold 4.3 TWh of the gas fuel. The Company is focusing on the sales of the natural gas for the supply needs of TAURON Sprzedaż, with 57.9% of the purchased gas fuel volume sold thereto.

The competences of the Company also include the management, for the needs of TAURON Capital Group, of the property rights related to the Guarantees of Origin (GOs) of energy (energy certificates), constituting the confirmation of electricity generation from the renewable sources (including the sources that utilize the agricultural biogas), as well as the property rights related to the electricity efficiency certificates. The principles of the cooperation are defined in the agreements for the management of the property rights’ balance (TAURON Sprzedaż, TAURON Sprzedaż GZE, TAURON Wytwarzanie, TAURON Ciepło) as well as in the agreements for the provision of the trading services with respect to the management of the portfolio of the property rights and the Guarantees of Origin (GOs) of energy (energy certificates) (TAURON Ekoenergia, EW Dobrzyń, EW Śniatowo, EW Inowrocław, EW Gołdap, EW Mogilno).

TAURON is a competence center with respect to the management and trading in the CO2 emission allowances for TAURON Capital Group’s subsidiaries. As a result of centralizing the trading in the emissions, a synergy effect was achieved, involving optimizing of the costs of utilizing the resources of TAURON Capital Group’s entities. In the pursuit of the above mentioned objectives with respect to the CO2 emission allowances trading, the Company is actively taking part in the trading on the ICE ENDEX exchange, the EEX exchange as well as on the OTC market. In connection with the centralizing of this function, TAURON is responsible for the settlements (clearing) of the subsidiaries’ CO2 emission allowances, securing (hedging) the subsidiaries’ emission needs while taking into account the emission allowances allocated thereto.

TAURON is also performing the function of the Market Operator and the entity responsible for the trade balancing for TAURON Capital Group’s subsidiaries as well as for the external customers. These functions are carried out under the transmission agreement concluded with the Transmission System Operator (TSO) and other regulations in this respect (Terms and Conditions for the Balancing and the Transmission Grid Code).

Until November 30, 2022, the Company had been holding exclusive control over the generation capacity with respect to the trading and technical capabilities related thereto, it had been responsible for optimizing the generation, i.e. the selection of the generation units to be utilized for the electricity production, as well as the adequate distribution of the loads in order to perform the contracts concluded, taking into consideration the technical conditions of the generation units, as well as the grid constraints (gird congestion) and other factors, over the various time frames. As part of the services provided for the Generation Segment the Company was taking part in preparing the overhaul plans, plans of the available (dispatchable) capacity, as well as the production plans for the generation units, over the various time frames, as well as in agreeing them with the relevant grid (network, system) operator. As of December 1, 2022, TAURON Wytwarzanie has been performing these functions on its own for its assets as part of the implementation of the Government’s NABE Concept. TAURON is also developing its competences with respect to the Market Operator function for the gas under the transmission agreement with GAZ-SYSTEM S.A. Since July 2015, TAURON, as one of the first entities in Poland, has been providing services for a balancing group for the entities carrying out the trading transactions on the gas market and is currently conducting the balancing of the trading for two of TAURON Capital Group’s entities, as well as for the external entities.

In 2022, TAURON was actively taking part in the secondary capacity market, securing the capacity obligation within TAURON Capital Group as well as concluding the transactions with the external counterparties on the OTC market.

As part of the works related to asset management, TAURON is conducting the activities aimed at ensuring consistent and efficient management of the production assets. Priority is given to the activities aimed at ensuring the required level of availability, business continuity and efficiency of the assets. Over the next few years, it is necessary to adjust the production assets to the changes stemming from the energy transition process. It is also important to coordinate the management of the research and development activities as well as to create a framework for the development of innovations and adequate technical and organizational standards.

The core products, goods and services of TAURON Capital Group

TAURON Capital Group was conducting its operations and generating its revenue, first and foremost, from the electricity and heat supply and distribution, electricity and heat production in 2022.

In connection with the Company’s divestment of ownership rights to 100% of the shares in TAURON Wydobycie and the loss of control by TAURON Group over TAURON Wydobycie related thereto, as of 2023, TAURON Group has not been conducting operations with respect to the commercial coal mining and production.

TAURON Capital Group’s core products included electricity and heat, as well as hard coal in 2022. In addition, TAURON Capital Group’s subjects of operations, in 2022, included trading in the commodities: electricity, energy market products, gas, as well as the provision of the electricity distribution and supply services, including to the final consumers, heat distribution and transmission and other services related to the operations conducted thereby. 

The below table presents TAURON Capital Group’s 2021-2022 production and sales volumes.

Production and sales volumes unit 2021 2022 Change in % (2021/2020)
1. Commercial coal production Mg m 5.15 5.01 97%
2. Coal sales by the Mining Segment Mg m 5.47 4.90 90%
3. Electricity generation (gross production), including: TWh 15.59 15.55 100%
Electricity generation from renewable energy sources, including: TWh 1.71 1.57 91%
1) Production from biomass TWh 0.43 0.34 79%
2) Production of hydro, wind and photovoltaic power plants TWh 1.28 1.23 95%
4. Heat production PJ 12.00 10.58 88%
5. Heat supply PJ 15.08 13.80 91%
6. Electricity distribution TWh 53.97 53.68 99%
7. Electricity supply TWh 47.11 46.03 98%
1) Retail TWh 33.41 31.14 93%
2) wholesale TWh 13.70 14.89 109%
8. Number of customers – Distribution ‘000 5 777 5 836 101%

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