Energa summarises the first quarter of 2021

After three months of this year, Energa SA of the ORLEN Group recorded a clear increase in results. Consolidated EBITDA improved by 33% y/y (to PLN 0.8bn) and net profit by nearly 250% (to PLN 0.4bn). The Energa Group has historically achieved some of the best consolidated quarterly results due to, among others, improved operating performance and the ongoing integration with the ORLEN Group.

The recorded increases were due not only to operating results that were better than in a comparable period (energy production +28% y/y, distribution +2%, retail sales at a level comparable to the first quarter of 2020). The increase in revenues from the sale of electricity and system services to the Transmission System Operator was also favourable. Financial results were also positively impacted by the President of the ERO's tariff for households, which was more favourable than last year's tariff, as well as by the general improvement in margins on electricity sales to other customers in the Sales Business Line and by optimisations resulting from the ongoing integration with the ORLEN Group.

- The Energa Group has historically achieved some of its best quarterly results. I am convinced that the plans we have outlined in the new long-term strategic investment plan will reinforce this trend - emphasises Jacek Goliński, President of the Board of Energa SA.

Investments in distribution and production

In the reported period, capital expenditure increased to PLN 345 million, or 4% year-on-year, . Of this amount, over 80% was earmarked for investments in the Distribution Business Line, where, inter alia, a programme for the modernisation of distribution networks to the Smart Grid standard is in progress, as well as for infrastructure development (e.g. the construction of a Grid Distribution Centre in Winnica, Mazowieckie Voivodeship, was completed).

Thanks to the upgrades and expansion of the electricity grid, the Distribution Business Line has recorded another improvement in the reliability indicators of the distribution network. SAIDI (System Average Interruption Duration Index - index of the average system duration of long and very long interruptions) improved overall by 39% y/y, while SAIFI (System Average Interruption Frequency Index - index of the average system frequency of long and very long interruptions) improved by 28%. In the first quarter, 597 km of new power lines were built and modernised (their total length is now 191,000 km), 15,000 new customers were connected, and approximately 175 MW of new renewable energy sources were installed, including approximately 95 MW of micro-installations.

At the end of the first quarter of this year, Energa OZE issued an NTP (Notice to Proceed – an order to start further work) for four small photovoltaic farms with a total installed capacity of 4 MW, in Samolub (Warmińsko-Mazurskie voivodeship, two farms), Czernikowo and Przykona (both attached to Energa's existing assets there). In February, the leader of the Production Business Line also handed over the construction site of the PV Gryf photovoltaic farm (designed installed capacity of approximately 20 MW) to the project’s contractor.

In turn, at the end of the first quarter, the construction began in Elbląg of a reserve and peak load boiler house with a thermal capacity of 114 MWt - the first of two new district heating assets, thanks to which by the turn of 2024 and 2025 Elbląg Heat and Power Plant (belonging to Energa Kogeneracja) will stop producing heat from coal.

As part of the ongoing integration with the ORLEN Group, the process of integrating electric vehicle charging stations owned by Energa into the ORLEN Charge network has also begun. Once completed, the system will support the largest charging infrastructure in Poland.

A new direction for the development of generation assets

Energa's renewable energy sources produced approximately 406 GWh of energy in the reported period. This result was primarily determined by weather conditions that adversely affected the operation of wind and photovoltaic assets. At the same time, hydropower plants increased electricity generation by 24% year-on-year.

The dependence of RES on atmospheric and hydrological conditions is well known, which is why, despite the still high volume of energy produced by them, Energa will expand its generation potential in the coming years in two ways, in line with the ORLEN Group's strategy. On the one hand, renewable sources will be developed, while on the other Energa will invest in low-carbon gas assets whose flexibility will allow for better balancing of variable production from RES.

According to the new Multi-Year Strategic Investment Plan, in the years 2021-2030 the Production Business Line is to be supported with capital expenditures of nearly PLN 12 billion.