PGE Group published its financial and operating results for the first quarter of 2020. The green direction followed by the Group contributes to the Group's financial performance and mitigates the impact of market pressure on conventional sources.
In the first quarter of 2020, power units operated by PGE Group generated electricity in the net amount of 15.4 TWh, including 7.2 TWh generated in lignite-fired units (down 19%) and 5.7 TWh in coal-fired units (up 28%, supported with generation from new units in Opole Power Plant). The distribution volume stood at 9.2 TWh (down 1%), and electricity sales to final off-takers amounted to 10.7 TWh (down 6% as a result with the sales strategy to focus on high-margin customers). The heat sales volume was 19.8 PJ (a decrease by 5% due to higher temperatures).
PGE Group continues to diversify its generation portfolio towards renewable sources and gas fuel which serves as a transition fuel on the way to the green direction. In the first quarter of 2020, PGE's wind farms produced 19% more electricity than in the same period of the previous year, reaching the output of 0.5 TWh. Energy generation from pumped-storage plants and biomass also increased (by 29% and 33% year-on-year respectively). In the same period, electricity generation from gaseous fuel stood at 1.4 TWh and remained relatively flat year-on-year (down by 1%).
Poland is facing specific challenges and goals. As an integral part of the national energy ecosystem, PGE feels obliged to pursue the green direction and to invest in renewable energy sources – says Wojciech Dąbrowski, President of the Management Board of PGE Polska Grupa Energetyczna.
The reported EBITDA of the PGE Group in the first quarter of 2020 declined by 2% to PLN 1.8 billion despite market pressure on conventional sources and the impact of weather conditions.Key factors having a negative effect on the performance included CO2 emission costs (higher by approx. PLN 650 million year-on-year mainly due to increased EUA price), lower volume of generation from lignite-fired units (down by 1.7 TWh year-on-year), and lower sales of heat (down by 1.1 PJ due to higher average outdoor temperatures).
These factors were offset mainly by generation from new units no. 5 and 6 in the Opole Power Plant (additional volume of 1.8 TWh compared to the first quarter of 2019) and higher average energy price realised by the Conventional Generation segment.
In the first quarter of 2020, PGE Group's capital expenditure decreased by 5% year-on-year to approx. PLN 957 million.
We are finishing the construction of onshore wind farms with a capacity of 100 MW. We also continue our work related to the PV Programme. We have also intensified our efforts on the gas project in the Dolna Odra Power Plant to be ready to fulfil our obligations towards the National Power System as of 2024. But most of all, we focus our efforts on offshore wind farms which will change the image of the Polish energy sector forever, not only in terms of our Group, but also of the entire Polish economy. – adds Wojciech Dąbrowski.
Despite the current pandemic, the PGE Capital Group remains fully operational. Owing to the countermeasures introduced within the Group at an early stage, PGE has been continuously producing electricity and heat and ensuring their uninterrupted supply.
In the first quarter of 2020, the impact of the pandemic on the Group's performance was still limited. The effect of lower consumption of electricity and its impact mainly on electricity sales will be reflected in figures for subsequent periods – says Paweł Strączyński, Vice President of the Management Board of PGE Polska Grupa Energetyczna for finance.