Assets

In the distribution segment, PGE Group operates through Lublin-based PGE Dystrybucja S.A. The company's activities focus on electricity supply services through high-, medium- and low-voltage power lines and equipment to end customers. 

Key data concerning PGE Dystrybucja's clients in 2016 and 2015.

More about our clients in chapter Who our clients are.

Key operating data for 2016 and 2015. 

Key financial figures

Key figures in the distribution segment.

Key factors having impact on segment results

Key EBITDA divergences in the distribution segment [in PLN million].

Major EBITDA drivers in the distribution segment in 2016, in comparison with the previous year, are as follows:

• Increase in energy distribution volume by 944.3 GWh, resulting from a higher number of clients per energy supply point (by approx. 43 300) compared to 2015 and growing energy consumption, particularly at mid- and low-voltage.
• Decrease in revenue from distribution services due to lower distribution fee rates in the 2016 tariff, as compared to rates approved in the 2015 tariff, largely because of lower return on capital and thus WACC lower by about 1.5pp.
• Decrease in revenue from connection fees due to a smaller number of connections done for large customers and producers. Seven wind farms, a special economic zone and 2 sub-stations for Polish Railways were connected in 2015.
• Decrease in other revenue, resulting largely from lower revenue from passive energy, caused by a decline in the average electricity price on the competitive market for 2014, as announced by the President of the Energy Regulatory Office, based on which fees for passive energy for 2016 were calculated.
• Higher costs of energy used to cover balancing differences resulting from an increase in the volume of balancing differences connected with higher demand for energy and a change in supply structure.
• Decrease in personnel costs, largely resulting from changes in actuarial provisions.
• Positive divergence in the 'other' item, largely resulting from a decrease in costs of repairs and operation of grid assets by PLN 11 million.

Capital expenditures

Capital expenditures in the distribution segment in 2016 and 2015.

The largest expenditures in the distribution segment in 2016 were related to the following tasks: "Connection of new off-takers" and "MV and LV (low-voltage) lines".

More about investments in 2016 in the chapter Organic growth.

Growth perspectives for the distribution segment

Responsible approach to natural environment

Our responsible approach to the natural environment in the distribution segment focuses on operating power lines and equipment in accordance with regulations. This also involves carrying out investment and repair activities in such manner as to ensure that their burden and impact on the surrounding environment are as small as possible.

As a result of its activities, PGE Dystrybucja S.A. has impact on the natural environment mainly through the following:

• emission of gases and particulate matter,
• collection of groundwater (wells) and discharge of waste-water to water or ground,
• production of waste,
• electromagnetic field and noise emissions.

As part of the distribution business, all investment activities are conducted in a way that ensures that their effects include a maximum possible level of mitigation of negative environmental impact by facilities owned by the company. The construction of new power facilities or modernisation of existing ones is preceded by obtaining a decision on environmental conditions for the undertaking, issued by an environmental protection authority.

PGE Dystrybucja has been running a project to limit grid losses for many years, mainly through the exchange of transformers to low-loss equipment as well as grid reconstruction and modernisation. Its investments contribute to improving quality parameters of electricity supplies and reduce grid operating costs. For example, in 2016 we reduced grid losses by more than 2%.

The company is obligated to notify its installations emitting electromagnetic fields. New or modernised installations operated by PGE Dystrybucja are continuously notified to environment protection authorities relevant to the emission location.

In 2016, we carried out a number of activities within our distribution area intended to maintain the natural character of the environment. The key tasks include:

• preparing environmental impact assessments when drafting technical designs for investment projects
• continuing activities intended to protect the natural environment from insulating oil pollution in the event of an emergency leak from transformers used on 110 kV substations, by constructing sealed containers (basins) under power transformers
• continuing activities within a programme to protect white stork nests, consisting of installing special structures on low-voltage lines facilitating the set up and protection of stork nests
• introduction of modern small-format power equipment and grid elements as well as replacement of bare aluminium wires on overhead lines with insulated wires in order to reduce used space on infrastructure and reduce electrocution risk, which is of particular importance in areas with protected landscape elements
• continuing to exchange transformers in order to limit power grid losses

More about PGE Group's responsible approach to the environment in chapter Limiting our footprint.