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Infrastruktura - Środowisko - Energia
Dodatek promocyjno-reklamowy do "RZECZPOSPOLITEJ".
20 marca 2007 r.
in english
Polish Power Group
Jacek Socha, President of the Management Board of PSE S.A.
 Only a large, strong and
stable entity may become a national power champion, able to compete against the
largest ones in the region and set trends in power engineering.
Everyone knows that Polish power
plants are obsolete and require major investments both in the necessary overhauls
and in the construction of new production facilities and distribution networks.
The question is - where do the funds come from and who is to carry out the
enormous investments. Thus, a Government Program for power engineering was
established that provides for sector consolidation and establishment of four
large power groups.
The Polish Power Group (PGE),
established on the basis of Polskie Sieci Elektroenergetyczne S.A. is to be a
leader of the transformation and become the largest power entity in Poland. Building
of a capital group within the sector is nothing new. Similar consolidation
processes are under way in other European countries. The total value of
transactions in the power sector in Europe is the highest in history. In Poland
a similar transformation method was applied e.g. to pharmaceutical companies.
PGE will hold about 30% in
distribution and 44% in production of electric energy. thus it will no way
become a monopoly in the power sector. The transformation plans in the power
sector in Poland have also been positively assessed by the European Commission.
PGE at
start
The consolidation process began
by setting up by PSE S.A. a special purpose company PGE Energia SA. On 29 December
2006 capital was injected in the company as per the timetable provided for in
the Government Program for power engineering by way of contributing shares of
eight distribution companies in eastern and central Poland Zespół Elektrowni
Dolna Odra SA. The Minister of State Treasury, representing the owner of the
following companies: Zespół Elektrowni Dolna Odra S.A., Zakłady Energetyczne
Okręgu Radomsko-Kieleckiego S.A., Zakład Energetyczny Białystok S.A., Zamojska
Korporacja Energetyczna S.A., Zakład Energetyczny Warszawa - Teren S.A.,
Lubelskie Zakłady Energetyczne S.A., Rzeszowski Zakład Energetyczny S.A.,
Łódzki Zakład Energetyczny S.A., Zakład Energetyczny Łódź - Teren S.A. took a
decision to contribute 85% of all the shares of those companies to PGE Energia S.A.,
Warsaw as contribution in kind in exchange for the State Treasury acquiring shares
from the new share issue of PGE Energia S.A., Warsaw. The next step will be to
contribute the shares of BOT and PGE Energia to PSE S.A.
Why Polskie Sieci Elektroenergetyczne
S.A.
The decision of selecting PSE as
an integrator was influenced by many legal, economic and social factors.
Meeting the requirements provided
in the Law on power generation, Program for power generation and draft law on
liquidation of long-term contracts (e.g. split of network assets from PSE and
dissolution of KDT) causes serious changes to all entities operating in the
sector. It is impossible to split such a large part of assets (of about PLN
8,00 million) and to have PSE at the same finance the deficit resulting from
the need to terminate long-term contracts, so-called KDTs while maintaining
full credibility towards banks and financial stability. This means that for the
security of the sector, the split of assets should be made as an equivalent
swap so that the financial potential of PSE S.A. guaranteed safe enforcement of
the regulations concerning discontinuation of KDTs.
PSE S.A. is also the strongest
company among those that are to be included in PGE. It has had the best
financial results so it has the best potential to support financially the other
PGE members.
The PSE Capital Group is a
company with best financial liquidity and accounts for about 40% in value terms
of all the companies in the newly established group. In 2006 the PSE Capital Group
generated about PLN 1,800 million profit which is more than total profit of all
the companies to be included in PGE. PSE also holds substantial financial reserves
(over PLN 3,000 million).
Another major factor is the
experience and competence of the staff of PSE S.A. during the sixteen years of
uninterrupted operation, the company has gained richest experience among the
entities operating in the power sector. The acquired competence in managing a holding
structure provides a guarantee of smooth operation of the champion under
development. PSE also has the broadest experience in international operations
as many a time it has been representing the entire Polish power market.
additionally, it is the only company to have experience in nuclear energy.
PGE as a leader must balance
various interest and needs of its members. PSE has the most diversified areas
of operation, e.g. production, sale and transmission of electric energy, telecommunications,
consulting and IT services.
Chief
objective- the necessary investment
A major objective of the Program
for power engineering is to expand the sector's investment and borrowing
potential by creating the Polish Power Group. That will assure carrying out the
required investments in order to guarantee power security and reliability of
energy supplies, meeting the obligations with respect to environment protection
and increasing competitive potential in the European energy market, in
particular in the region of Central and Eastern Europe. The establishment of PGE
will create favourable conditions to invest in international co-operation (power
connection with Lithuania) and construction of new power plants, including
nuclear plants as well as modernisation of the existing infrastructure.
Capital concentration will allow
to use the synergy effect. PGE will be able to invest more than now summed up
as investments planned in the individual companies making up PGE. By 2025 the
Group may assign about PLN 116,000 for investments. The operating costs of the
companies functioning jointly will be lower than their individual operating
costs. A strong consolidated companies is also more creditworthy in the eyes of
banks.
In the near future, demand for
electric energy in Poland will be growing. With a fast economic growth - the 5%
annual growth of GDP can be considered high - one may assume that for each one
per cent of GDP growth there will be an 0.8% growth in demand for energy. therefore,
production potential has to be developed to guarantee energy security to Poland.
On the one hand, the new investments should be based on raw materials used in
power generation that are available domestically, that is hard coal and brown
coal. On the other hand, it is necessary to invest in new technologies -
nuclear power generation seems to be the best and most effective in our
situation. PSE has been involved in advanced negotiations on Poland's
participation in the construction of new production facilities at the nuclear power
plant in Ignalin, Lithuania. However, that is just a first step. If by 2016 Poland
will not use nuclear energy, than on the basis of the existing power raw
materials, i.e. hard coal and brown coal - Poland's power security may be at
risk. Therefore, its is necessary to take a decision now what technologies will
be used in our country in the future so that the growing demand for energy is
satisfied. With subsequent restrictions as to gas emissions to the atmosphere -
with the European Union applying increasingly restrictive principles - the operating
costs of traditional coal-based technologies will grow - coal being the basic
raw material for the production of electric energy in Poland. Obviously,
nuclear energy does not mean a need to close down the traditional power plants
with no prospects for their development. for many years to come they will
continue to be the predominant source of electric energy in Poland.
Construction of a nuclear power
plant is a capital consuming process. The costs of generation of i Megawatt of
energy is now estimated as about EUR 2.5 million. Analyses indicate however a
high profitability of investments in nuclear power generation despite the high
initial capital costs due to low fuels costs and no costs related to gas
emissions. The price of uranium being the basic fuel is low in comparison with
other sources of energy; besides, uranium has no other large-scale practical application
in industry. The cost of uranium is about 5 per cent of the end price of
electric energy generated in nuclear power plants. A nuclear power plant may
operate for about 60 years while a wind power plant takes only 20 years to
close.
Poland
is not enough
For many years PSE has been
active in the international electric energy market and is the largest entity in
Poland involved in the trade in electric energy. it has also been investing in
the cross-border connection Poland - Lithuania. The inter-system connection
becomes particularly important in the light of PSE's involvement in the Ingalin
project.
PSE plans now an expansion
abroad. It plans several acquisitions, not only related to the project of
construction of new power generation facilities at the nuclear power plant in
Ignalin, jointly with Lithuania, Latvia and Estonia. It also looks seriously at
investments in Ukraine and Belarus. PSE, and in the future also the power group
integrated by it, should consider its participation in the privatisation and
investments in the power generation sector in Lithuania, Slovakia and Ukraine
as well as in Belarus provided the process is ever implemented there. n
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