Provision for rehabilitation of post-exploitation mining properties
After the completion of the lignite mining, the area of the surface mines belonging to the PGE Group will be rehabilitated. Some changes have been introduced in new technical plans for rehabilitation that concern extension of the period over which the rehabilitation will be carried out. According to the current plans, costs will be incurred in the years 2023 - 2069 (in case of PGE Górnictwo i Energetyka Konwencjonalna S.A. Branch Bełchatów Lignite Mine) and in the years 2045-2087 (in case of PGE Górnictwo i Energetyka Konwencjonalna S.A. Branch Turów Lignite Mine).
The PGE Group creates provision for rehabilitation of post-exploitation mining properties. The amount of the provision recognized in the financial statements includes also the value of Mine Liquidation Fund created in accordance with the Geological and Mining Law Act. The value of the provision as at December 31, 2016 amounted to PLN 2,366 million and as at December 31, 2015 to PLN 3,051 million.
Estimated influence of changes in discount rate on the value of rehabilitation provision:
Carrying amount | Discount rate | ||
-1 p.p. | +1 p.p. | ||
---|---|---|---|
Provision for rehabilitation of post-exploitation mining properties | 2,366 | 943 | (659) |
Provision for rehabilitation of ash storages
The PGE Group power generating units raise provisions for rehabilitation of ash storages. As at December 31, 2016 and as at December 31, 2015 the provision amounted to PLN 98 million.
Provisions for rehabilitation of post-construction grounds of wind farms
The companies which own wind farms create provision for rehabilitation of post-construction grounds of wind farms. As at December 31, 2016 and as at December 31, 2015 the provision amounted to PLN 49 million.
Liquidation of property, plant and equipment
The obligation to liquidate assets and rehabilitate the area results from „The integrated permission for running electric energy and heat energy producing installation” in which the restitution of the area was specified. As at the reporting date, the value of the provision amounts to PLN 157 million (PLN 152 million as at the end of the comparative period) and refers to some assets of the Conventional Generation and Renewables segments.
Discount ratio used for valuation of rehabilitation provisions as at December 31, 2016 amounted to 3.5% (3.0% in the comparative period).