Key events

The timeline of the selected highlights associated with the operations of TAURON and TAURON Capital Group that took place in 2022 is presented below.

2022 highlights
  1. Changes to the composition of the Management Board and the Supervisory Board of TAURON
  2. Signing of an Annex to the settlement agreement concluded by EC Stalowa Wola with Abener Energia

 

  1. Fulfillment of the conditions of the settlement agreement concluded by EC Stalowa Wola with Abener Energia
  2. Publishing of the financial results of TAURON and TAURON Capital Group for the full year 2021.
  3. Appointment of the President of the Management Board of TAURON.
  4. Re-synchronization with the grid of the 910 MW unit in Jaworzno and the restart of the unit’s operation in the Polish power system.
  5. Signing of the letter of intent between TAURON and KGHM Polska Miedź with respect to the cooperation in the field of the power generation sources based on the nuclear reactors power generation technology.
  1. Changes to the composition of the Supervisory Board of TAURON.
  2. Ordinary General Meeting of the Shareholders of TAURON.
  3. Publishing of the financial results of TAURON and TAURON Capital Group for the first quarter of 2022.
  4. Transferring by TAURON of the shares in the TAURON Serwis and Bioeko Grupa TAURON subsidiaries to TAURON Wytwarzanie.
  5. Acquiring by TAURON Zielona Energia of the shares in the company „MEGAWATT S.C”, the holder of the rights to develop the project involving the construction of the Mierzyn wind farm with a capacity of 58.5 MW.
  6. Adoption of TAURON Group’s Strategy for the years 2022-2030 with an outlook until 2050.
  1. Extraordinary General Meeting of the Company and passing of the amendment to the Articles of Association of TAURON Polska Energia S.A.
  2. Commencement of the construction of the photovoltaic farm in Mysłowice (stage I – 37 MW) as part of the TAURON PV Program with a total capacity of approx. 100 MW.
  3. Commencement of the construction of the Mierzyn wind farm with a capacity of 58.5 MW.
  4. Signing of the syndicated loan agreement for the amount of PLN 4 billion.
  5. Transferring of TAURON’s shares in the Nowe Jaworzno Grupa TAURON subsidiary to TAURON Wytwarzanie.
  6. Commissioning of the Choszczno II photovoltaic farm with a capacity of 8 MW.
  7. Signing of an agreement on the conducting of the mediation process with respect to the 910 MW power generating unit in Jaworzno involving Nowe Jaworzno Grupa TAURON (currently TAURON Wytwarzanie), RAFAKO, Mostostal Warszawa and E003B7 sp. z o.o.
  8. Changes to the composition of the Management Board of TAURON.
  9. Publishing of the Integrated Annual Report for 2021
  1. Changes to the composition of the Management Board of TAURON.
  2. Publishing of the financial results of TAURON and TAURON Capital Group for the first half of 2022.
  3. Receipt by TAURON of the State Treasury’s offer to acquire the shares of TAURON Wydobycie.
  4. Acquiring by TAURON of the shares in the company PGE Baltica 4.
  5. Commissioning of the Majewo wind farm with a capacity of 6 MW.
  6. Commissioning of the Piotrków wind farm with a capacity of 30 MW.
  7. Merger of TAURON Wytwarzanie and Nowe Jaworzno Grupa TAURON.
  8. Acquiring by TAURON Zielona Energia of the shares in the company WIND T4, the holder of the rights to develop the project involving the construction of the Nowa Brzeźnica wind farm with a capacity of 19.6 MW.
  9. Acquiring by TAURON Dystrybucja from TAURON of the shares in the company Marselwind (currently Usługi Grupa TAURON).
  10. Reaffirming by the Fitch Ratings agency of TAURON’s long term foreign and local currency ratings at „BBB-” with a stable outlook.
  11. Acquiring by TAURON Zielona Energia of the shares in the company FF PARK PV1, the holder of the rights to develop the project involving the construction of the Proszówek photovoltaic farm with a capacity of 45.6 MW.
  12. TAURON awarded the special prize The Best of The Best for the annual report in the competition The Best Annual Report 2021.
  13. Signing by TAURON and the State Treasury of the contingent agreement for the sale of the shares in TAURON Wydobycie.
  1. Publishing of the financial results of TAURON and TAURON Capital Group for the third quarter of 2022.
  2. Acquiring by TAURON Zielona Energia of the shares in the company WINDPOPER Gamów, the holder of the rights to develop the project involving the construction of the Gamów wind farm with a capacity of 33 MW.
  3. Changes to the composition of the Supervisory Board of TAURON.
  4. Acquiring by TAURON Zielona Energia of 100% of the shares in the company WIND T30MW, the holder of the rights to develop the project involving the construction of the Warblewo wind farm with a capacity of 30 MW.
  5. Taking up by TAURON Ciepło of 100% of the shares in the company Energetyka Cieszyńska.
  6. Commencement of the construction of the Nowa Brzeźnica wind farm with a capacity of 46 MW.
  7. Signing by TAURON Wydobycie of the agreements in connection with being covered by the support system with respect to the subsidies for the production capacity reduction.
  8. Commencement of the construction of the Gamów wind farm with a capacity of 33 MW and the Warblewo wind farm with a capacity of 30 MW.
  9. Signing of an agreement with the National Fund for the Environmental Protection and Water Management (Narodowy Fundusz Ochrony Środowiska i Gospodarki Wodnej) with respect to providing of the support for a project aimed at expanding the power grid for the needs of the development of the electric vehicle charging infrastructure.
  10. Contribution of 100% of the shares in the Wsparcie Grupa TAURON to the company Polski Holding Obronny.
  11. Completion of the Digital Poland Operational Program (Program Operacyjny Polska Cyfrowa) project
  12. Transferring of 100% of the shares in TAURON Wydobycie to the State Treasury.

Major events having a significant impact on the operations in 2022 and after the balance sheet date, i.e. December 31, 2022

The more important events and accomplishments that had a significant impact on TAURON Capital Group’s operations that had occurred in 2022, as well as by the date of drawing up this report are listed below.

In addition, the above mentioned events should include the agreements that are significant for TAURON Capital Group’s operations, presented in detail in section Agreements that are material for TAURON Capital Group’s operations of Reports of the Management Board.

On March 22, 2022, the Management Board of TAURON disclosed approved the conducting of the contract award procedure by TAURON Wytwarzanie, the planned effect of which would be obtaining the final price bids from the potential contractors wishing to build the combined cycle (CCGT) power generating unit with the high efficiency co-generation unit, with the expected capacity of 413 Mwe, as well as the heat generation unit with the capacity of approx. 250 MWt at the Łagisza Power Plant.

The detailed information related to the above topic is provided in section 1.7 of Reports of the Management Board.

TAURON disclosed the information on the above event, in reference to current report no. 34/2016 of September 2, 2016, in current report no. 8/2022 of March 22, 2022.

As of the date of drawing up this report the analytical works on further scenarios for the implementation of this project are underway – the lack of the bids for the construction of the unit made it impossible to participate in the capacity market auction in 2022, therefore further corporate decisions regarding the continuation of the project, a change of the scope thereof or a resignation from the implementation thereof are required.

On April 14, 2022, the synchronization of the 910 MW power generating unit in Jaworzno with the grid and the resumption of the unit’s operation in the Polish power system.

TAURON disclosed the information on the above event, in reference to current report no. 43/2021 of November 4, 2021, in current report no. 12/2022 of April 14, 2022.

On June 7, 2022, the Management Board of TAURON granted its approval of the purchase by the TAURON Zielona Energia subsidiary of 100 percent of the shares in the special purpose vehicle holding the rights to the project for the construction of a wind farm in Mierzyn with a capacity of 58.5 MW. TAURON informed that the wind farm construction project was in a ready-to-build stage and the special purpose vehicle (SPV), in accordance with the adopted assumptions, would complete the construction of the wind farm by the end of 2024. The total capital spending related to the purchase and the implementation of the investment project will reach PLN 500 million.

TAURON disclosed the information on the above event in current report no. 24/2022 of June 7, 2022.

On June 22, 2022, the Management Board of TAURON disclosed the information on the adoption of TAURON Group’s Strategy for 2022-2030 with an outlook until 2050. The new Strategy is a response to the challenges arising from the current and forecast situation on the power market and in the energy sector, related in particular to the transition of the energy industry and the new solutions supporting such a transition. As part of the process of developing the Strategy a thorough analysis of the macroeconomic, market and regulatory environment as well as the review of the forecasts and directions of the sector’s development was completed, including the translation thereof into the opportunities and risks for TAURON Capital Group in the time frame extending until 2030, with an outlook to achieve climate neutrality by 2050.

The detailed information related to the above topic is provided in section 1.6. of Reports of the Management Board

TAURON disclosed the information on the above event in current report no. 27/2022 of June 22, 2022.

On August 13, 2022, TAURON had received the information from the company Nowe Jaworzno Grupa TAURON (currently TAURON Wytwarzanie) indicating that during the works conducted in order to clean the boiler and the slag trap of the 910 MW unit in Jaworzno it had turned out that the additional works were required with respect to the slag hopper (boiler funnel) repair, which would lead to the unit’s shutdown until August 29, 2022. In connection with the above the Company had estimated that as a result of the unit’s shutdown from August 6, 2022, until August 29, 2022, the first degree contribution margin generated by the unit would be lower by approx. PLN 130 million.

Subsequently, on August 27, 2022. TAURON disclosed the information that, to the best of the Company’s knowledge, the expected shutdown of the unit would be longer by 5 days, and the Company’s estimate of the first degree contribution margin generated by the unit, as a result of its shutdown from August 6 to September 2, 2022, would be lower by approximately PLN 285 million. The difference, as compared to the previous estimate, is mainly due to a significant increase in the wholesale electricity prices at which the electricity repurchases for the unit’s needs are made.

TAURON disclosed the information on the above event in current report: no. 35/2022 of August 13, 2022, and no. 37/2022 of August 27, 2022.

The shutdown of the unit had ended in accordance with the above mentioned date. The ongoing operation of the unit is currently underway. The occurring emergency shutdowns of the unit are caused, among other things, by the failures occurring in the ash removal system and the mill systems. On the other hand, the temporary power losses during the operation of the unit are caused by the works related to the unit’s tune-up and the optimization of equipment operation. Due to the fact that the work scheduled to be performed during the transition period had not been completed by the deadline provided for in the contract (i.e. October 30, 2022,), the tune-up, testing and optimization phase has not, up to now, been carried out after the restart of the unit.

Major corporate events in 2021

There had been changes to the composition of the Company’s Management Board in 2022 and by the date of drawing up this report, which are presented in section 9.11. of Reports of the Management Board

TAURON disclosed the information on the above events in current reports: no. 1/2022 of January 20, 2022, no. 10/2022 of April 8, 2022, no. 34/2022 of August 12, 2022 (supplemented on August 24, 2022), and no. 38/2022 of September 5, 2022.

There had been changes to the composition of the Company’s Supervisory Board in 2022 and by the date of drawing up this report, which are presented in section 9.11. of Reports of the Management Board.

TAURON disclosed the information on the above events in current reports: no. 2/2022 of January 27, 2022, no. 19/2022 of May 23, 2022, no. 20/2022 of May 24, 2022, and no. 45/2022 of November 30, 2022.

On March 29, 2022, the Management Board of the Company made the decision that it would recommend no to pay out the dividend from the 2021 profit to the shareholders of the Company and to allocate in full the net profit of PLN 260 million to the Company’s reserve capital.

The decision is in line with the Company’s dividend policy in force, and in making it, the Management Board of the Company took into account, first and foremost, the current market situation and TAURON Capital Group’s investment program, which assumes incurring significant capital expenditures in the coming years, in particular in the Distribution Line of Business and in the RES Line of Business.

TAURON disclosed the information on the above event in current report no. 9/2022 of March 29, 2022.

The Ordinary General Meeting of the Company was held on May 24, 2022, and it adopted the resolutions related to, inter alia: the approval of the Financial Statements of TAURON Polska Energia S.A. for the year ended on December 31, 2021, in accordance with the International Financial Reporting Standards approved by the European Union, the approval of the Consolidated Financial Statements of TAURON Polska Energia S.A. Capital Group for the year ended on December 31, 2021, in accordance with the International Financial Reporting Standards approved by the European Union, the approval of the Report of the Management Board on the operations of TAURON Polska Energia S.A. and TAURON Capital Group for the financial year 2021, the distribution of the net profit for the financial year 2021, the providing of the opinion on the Report on the compensation of the Members of the Management Board and of the Supervisory Board of TAURON Polska Energia S.A. for 2021, the change of Policy for the Compensation of the Members of the Management Board and of the Supervisory Board of TAURON Polska Energia S.A. the acknowledgement of the fulfillment of duties by the Members of the Company’s Management Board and of the Company’s Supervisory Board, the establishing of the number of the Members of the Company’s Supervisory Board and the appointment of a Member of the Company’s Supervisory Board of the 6th common term of office.

TAURON disclosed the information on the convening of the Ordinary General Meeting (GM) of the Company, on the content of the draft resolutions and on the changes to the agenda in current reports no. 14/2022 of April 25, 2022, no. 15/2022 and no. 16/2022 of April 27, 2022, as well as no. 17/2022 of April 29, 2022.

TAURON disclosed the information on the content of the resolutions subjected to the vote at the Ordinary General Meeting (GM) of the Company in current report: no. 21/2022 of May 24, 2022.

The Extraordinary General Meeting of the Company was held on July 13, 2022, and it adopted the resolutions related to, inter alia: the amendment of the Company’s Articles of Association and the acknowledgement of the fulfillment of duties by the specific Members of the Company’s Management Board for the years 2019 and 2020.

TAURON disclosed the information on the convening of the Extraordinary General Meeting (GM) of the Company and on the content of the draft resolutions in current reports no. 25/2022 and no. 26/2022 of June 17, 2022.

TAURON disclosed the information on the content of the resolutions subjected to the vote at the Extraordinary General Meeting (GM) of the Company in current report: no. 28/2022 of July 13, 2022.

On July 18, 2022, the Katowice-Wschód District Court in Katowice, the 8th Commercial Division of the National Court Register entered into the Register of Entrepreneurs of the National Court Register the amendments to § 16, clause 2 and § 22, clause 2 of the Company’s Articles of Association, passed by the Extraordinary General Meeting of the Company on July 13, 2022.

The amendments to the Company’s Articles of Association were related to the issue of the term of office of the members of the Company’s bodies – in accordance with the new wording of the Company’s Articles of Association, the Members of the Management Board and, respectively, the Members of the Supervisory Board of the Company shall be appointed for a common term of office lasting three full financial years, while a term of office of a Member of the Management Board and, respectively, of a Member of the Supervisory Board shall expire no later than as of the date of the General Meeting which approves the financial statements for the last full financial year of, respectively, the Member of the Management Board’s terms of office or the Member of the Supervisory Board’s term of office.

On July 29, 2022, the Supervisory Board of the Company adopted the consolidated text of the Company’s Articles of Association, incorporating the amendments passed by the Company’s Extraordinary General Meeting on July 13, 2022.

TAURON disclosed the information on the above events in current reports: no. 31/2022 of July 19, 2022, and no. 32/2022 of July 29, 2022.

Other major events in 2022

The full list of rating actions includes:

  1. long term local and foreign currency IDRs (Issuer Default Ratings) affirmed at „BBB-„, stable outlook,
  2. short term local and foreign currency IDRs affirmed at „F3”,
  3. national long term rating affirmed at „A(pol)”, a stable outlook,
  4. EUR 500 million Eurobonds foreign currency senior unsecured unsubordinated rating affirmed at „BBB-„,
  5. EUR 190 million hybrid bonds (European Investment Bank – „EIB„) rating affirmed at „BB”,
  6. PLN 750 million hybrid bonds (EIB) rating affirmed at „BB”,’
  7. PLN 400 million hybrid bond program and hybrid bond issue (Bank Gospodarstwa Krajowego S.A.) rating affirmed at „BB”, the national rating of the same program and bonds affirmed at „BBB(pol)”.

TAURON disclosed the information on the above event in current report: no. 41/2022 of October 12, 2022.

Major events after December 31, 2021

On February 14, 2023, TAURON disclosed the information that on the basis of its analysis of the regulatory environment in the energy market, and in particular with respect to the impact on the financial performance of TAURON Capital Group of the Act of October 27, 2022, on the Emergency Measures to Cap the Electricity Prices and Provide Support for Certain Consumers in 2023 and the Regulation of the Council of Ministers of November 8, 2022, on the calculation of the price cap, the Company estimated the value of the charges to be transferred in 2023 to the Price Difference Payout Fund introduced under these regulations.

The obligation of the electricity generators and the enterprises conducting business operations with respect to the electricity trading to transfer the so-called „charge” (write-off) to the Fund shall be applicable in a situation where the above mentioned entities obtain, from the sales of electricity, prices that exceed the price caps calculated in accordance with the provisions of the above mentioned regulation. Within TAURON Group, the subsidiaries belonging to the Generation, RES and Supply segments will be subject to the potential obligation to pay the charge to the Fund.

TAURON disclosed the information that to the best of the Company’s knowledge, as of the date of the disclosure of the information, having taken into account the scenario analysis with respect to the market conditions, as well as the operational and technical conditions, the total charges transferred to the Fund should be within the range between PLN 1.0 billion and PLN 1.3 billion in 2023.

At the same time, in view of the cumulative impact of other factors, the Company does not anticipate that the impact of the charges transferred to the Fund will lead to the negative deviations of the estimated EBITDA earnings in 2023 as compared to the average level of the EBITDA results obtained by TAURON Group in the previous few years.

The above disclosures do not constitute a forecast of the earnings for 2023, and the results of the assessments are burdened with a high degree of uncertainty and risk resulting in particular from the potential future changes in the legal situation in this regard, interpretative doubts and the adopted practice with respect to the calculation of the charge due to the Fund, the instability of the economic environment and the hard to predict market conditions, as well as the operational and technical conditions of the generating units, which will affect, among other things: the demand for electricity, the electricity production costs, the production and supply volumes and the market electricity prices.

The real figures required to calculate the charge for the Fund will depend on the final effects of the commercial operations at TAURON Group’s subsidiaries subject to the obligation to pay the charge for the Fund, as well as the actions of the Power (Transmission) System Operator with regard to the forcing and reducing of the operation of the generating units, and to a large extent will be known only at the time the given sales will be realized, based on the then market conditions (primarily the sales price and the volume of the electricity sold) and the unit generation costs incurred during such time, which will be precisely recognized following the accounting settlement of the given period.

TAURON disclosed the information on the above event in current report: no. 9/2023 of February 14, 2023.

As of the date of Reports of the Management Board, the above estimates have not materially changed.

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