The biggest share in consolidated EBITDA in the third quarter of 2015 has been taken by the conventional generation (PLN 1.1 billion) and distribution (more than PLN 622 million) segments. The renewable energy segment generated PLN 76 million, and the supply segment - PLN 144 million.

In the third quarter of 2015, the volume of net production amounted to 14.1 TWh and it was 2 percent higher than the previous year. The volume of distribution of electricity increased by 3 percent compared to the same period last year and amounted to 8.4 TWh. The volume of energy sales to end users placed at the comparable level to the third quarter of 2014 and amounted to 9.8 TWh.

The lignite-generated energy production in 3Q’15 reached almost 10 TWh (down by 3 percent), and coal 3.3 TWh (an increase of 25 percent). The generation from natural gas increased by 11 percent to 0.2 TWh and from renewable sources reached 0.5 TWh.

The Group consistently implements its investment projects. The expenditures for this purpose after 9 months of 2015 amounted to PLN 5.9 billion, an increase of 50 percent compared to the same period of 2014. Investment outlays on Opole II Project amounted year to date to PLN 1.7 billion. The ongoing works since February 2014 have been realized as planned and reached 24 percent progress.

PGE also modernizes and renovates its existing assets adapting them to gradually more strict environmental standards. The expenditures for this purpose in the first three quarters of 2015 amounted to PLN 578 million. The expenditures for investments in the distribution segment (modernization and connection) amounted to PLN 1.1 billion.

We are consistently going towards reaching the strategic objective of the Group, which is to reduce interruptions in the supply of electricity by 50 percent by 2020. It is an ambitious but feasible objective, a part of the development strategy of the distribution system operators, announced by the regulator for the next five years. In our opinion, another objective is also feasible which is to reduce operating costs by effective 7.5 percent, the second aspect of the new tariff model. The remuneration of assets remains to be discussed, proposed at a significantly lower level. We look forward to a constructive discussion on this issue with the regulator – says Marek Woszczyk, CEO of PGE Polska Grupa Energetyczna.

Further challenges for the coming year in the market environment is to lower prices in the forward contract on the sale of electricity as well as to lower prices on the increasing costs due to the CO2. The ongoing review of the strategy should help with finding appropriate solutions – adds Marek Woszczyk.

In the third quarter of 2015, PGE Group continued raising funds from external sources to finance its ambitious investment program.

The contract for the syndicated loan worth PLN 5.5 billion and two additional loan agreements with the European Investment Bank for a total amount of PLN 2 billion are other instruments that have been implemented step by step in our strategy of building a diversified program of financing investment projects of the Group. It has been complemented by the medium-term Eurobond issue program for up to PLN 2 billion from 2014, from which we have gained over EUR 600 million. Another issue under this program is possible in the event of a favorable market environment – says Magdalena Bartoś, CFO of PGE Polska Grupa Energetyczna.

The completed investments will decrease PGE negative impact on the environment by, among others, reducing emissions of carbon dioxide, sulfur oxides, nitrogen oxides and dust. It will be possible thanks to the investments of the company in the renewable energy sector. In July, Karwice wind farm was commissioned into use with a generation capacity of 40 MW. All three existing wind projects (Lotnisko, Resko II and Kisielice II) have been carried out according to the schedule. By the end of 2015, the Group plans to reach 529 MW of the onshore wind power, and this year’s total spending for this purpose has reached approx. PLN 1 billion. In addition, PGE is continuing its work on the project of the first offshore wind farm, and in mid-October expanded its generation pipeline by the first photovoltaic power plant.

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