Interview with the CEO - evolution in the direction of augmenting the Group’s generation potential

“One may expect gradual evolution in the direction of augmenting the Group’s generation potential through investments and acquisitions in co-generation. We are counting on the development of this area to exert a positive impact on the competitiveness of the Energa Group’s offer and Poland’s energy security”, states Dariusz Kaśków, Energa’s CEO.

The Energa Group will fundamentally retain the character attributed to it years ago at the time when the energy sector was consolidated, i.e. it will continue to be a distribution and generation group in which the significance of the distribution segment will have an extensive economic edge over the remaining segments. In your opinion, should the Energa Group’s current character be sustained? If so, then why, and if not, in what direction should it evolve and why?

The distribution segment generates the vast majority of the Group’s revenues and its prevalence will be preserved. We also anticipate maintaining another element that sets Energa apart from the other utility groups, namely, its high percentage of renewable energy sources in the company’s generation mix.

One may expect gradual evolution in the direction of augmenting the Group’s generation potential through investments and acquisitions in co-generation. We are counting on the development of this area to exert a positive impact on the competitiveness of the Energa Group’s offer and Poland’s energy security.

Of course, the company’s plans in this respect must be aligned to PSE’s recommendations as PSE, the transmission system operator, is responsible for the balance of capacity in the national electrical power system. In our investment policy we must also incorporate the intended development of dispersed generation and prosumer installations which we will connect to our grid.

Each one of the Polish utility groups faces its own special set of challenges but all of them (and of course other entities in the industry, too) are functioning in similar circumstances when looking at the overall operating conditions. If in your opinion there is something that should be changed quickly in the energy sector’s regulatory environment as it would be in Poland’s economic interests, then what would come first and why?

The Energa Group is developing projects using renewable energy sources; nevertheless, we are aware that the energy generated in these types of sources must be balanced with generation in conventional power sources having regard for the current operating conditions. It is natural that investors who elect to build the power generation units needed to maintain the continuity of energy supply in Poland should be convinced that their investments will be viable. That is why the concept of a capacity market, an idea that has been undergoing development in Poland and across Europe for several years is a solution whose implementation is worthy of consideration. The objective of this mechanism is to reward generation units for maintaining their dispatch readiness whereby the security of the entire electrical power system is supported.

Creating a well-run capacity market in Poland must be founded on a meticulous analysis of the system’s demand for additional conventional capacities capable of replacing de-capitalized power plants and forming the necessary supplement for the developing renewable energy sector.

The nation’s energy security, not the desire to conserve the existing system must be the major concern for the discussion on the capacity market. For this reason, regulatory mechanisms should be focused on supporting new generation units. In this context, the formation of the Ministry of Energy is a good solution as it will be able to craft Poland’s energy policy on a comprehensive basis and initiate changes to ensure the nation’s energy security.

The subject of further consolidation in the Polish energy sector returns to the forefront from time to time, more specifically, consolidation of Polish utilities and various scenarios are taken into consideration, including a merger of Energa and PGE. In your opinion, is further consolidation of the Polish energy sector necessary?

Decisions pertaining to the possible reorganization of the Polish energy sector are above all the domain of the majority shareholder of the Polish energy groups, namely, the State Treasury and they must follow from the government’s overall, long-term energy policy giving consideration to the nation’s energy security and economic viability as well as the interests of the employees of these energy companies, their consumers and other stakeholders.

The experience I gained in the management board of Energa Operator in the special period of consolidation of the Polish energy sector enables me today to assess the changes that took place in the Group in recent years. I perceive the value the Energa Group produces as a standalone entity aligned to specific market and geographic conditions and has with its strong distribution segment that sets it apart from others, accompanied by the high percentage of renewable energy sources in its generation portfolio.

I am convinced that by implementing efficiency programs and applying innovative technologies Energa will sustain its capacity to compete effectively in an ever more challenging market environment.

Source: wnp.pl