Energa Group's first quarter – more investments in RES and transmission infrastructure
The Energa Group, part of the ORLEN Group, has published consolidated financial and operating results for the first quarter of 2023. The share of RES in total gross electricity production was 54%. The Energa Group also saw a robust growth in capital expenditures, which increased by 126% year-on-year. During the period under review, 672 kilometers of power lines were extended and upgraded, and 17,000 new customers and 356 MW of new renewables were connected. In Q1 2023, the Energa Group generated PLN 7.4 billion in revenue, EBITDA of PLN 2.3 billion and net profit of PLN 1.6 billion, more than two-thirds of which was attributable to the Distribution Business Line.
“The dynamic increase in investments is a result of the implementation of the ORLEN2030 strategy. The Energa Group, as part of a multi-utility conglomerate, is expanding its capacity based on renewable energy sources and gas sources that stabilize their operation. This requires a parallel increase in investments in the upgrading and expansion of the distribution network so as to boost its connection potential," says Zofia Paryła, CEO of Energa SA.
Much higher investment outlays
In the first three months of 2023, the Group spent PLN 713 million on investments, 126% more than in the same period of 2022. More than 65% (PLN 469 million) of CAPEX was attributable to the Distribution Business Line. This allowed the expansion and modernization of 672 kilometers of power lines, as well as the connection of 17,000 new customers and 356 MW of new renewable sources. This Business Line also saw significant improvements in its SAIDI and SAIFI failure rates in Q1 2023, with the former falling by 75% y/y and the latter by 66% y/y.
More megawatts in photovoltaics
In the first quarter of this year, the Energa Group finalized two major photovoltaic projects with a total installed capacity of more than 90 MW. The first investment is a 62 MW farm in Wielbark in the Warmian-Masurian Province, currently one of the largest photovoltaic facilities in Poland. The second one, the Gryf farm with a capacity of 25 MW, is located in the Wielkopolska Province, in the immediate vicinity of the Przykona Wind Farm.
At the same time, Energa Green Development announced in the reported period a call for proposals for two more photovoltaic assets to be located in the Przykona municipality: the 65 MW Mitra PV farm and the 2.4 MW Żuki PV farm.
More than half of electricity from RES
Thanks to the consistent development of renewable energy sources, their share in total gross electricity generation was 54% (up from 39% a year earlier). At the same time, the production of energy from coal decreased significantly, by as much as 42%. Hydroelectric power plants accounted for the largest share of RES output, generating 343 GWh of energy (63% of total renewable production). Although year-on-year production from wind farms fell by 8% to 173 GWh, they ranked second in terms of the volume of energy generated by RES (32%). In the first quarter, Energa Group produced nearly 90% more energy from biomass, while photovoltaic sources tripled their generation year-on-year.
CCGT blocks in Grudziądz and Ostrołęka
The Group also continued to invest in RES-balancing low-carbon sources. Work has begun on the water intake and main for the cooling system of the gas-steam power plant in Grudziądz (560 MW). Since the water installation will run partly through areas where Grudziądz authorities are planning road investments, CCGT Grudziądz will participate in the reconstruction or construction of some public roads. Construction of the intake and main is expected to be completed by mid-2024. Completion of the power plant itself, for which the cornerstone was ceremonially laid in mid-May, is currently planned in 2025. At the beginning of 2026, the unit will be able to start meeting its 17-year capacity obligation.
Construction work on the supply pipeline for the Ostrołęka gas and steam power plant also began in the reported period. The 28-kilometer-long connection will run through the territory of two provinces: Podlaskie and Mazowieckie. The pipeline is scheduled for completion in the second quarter of 2024.
Largest energy storage for NPS
In the first quarter of this year, Energa Wytwarzanie began preparations to connect directly to the distribution grid its 6 MW, 27.3 MWh battery energy storage (BES) facility in Bystra (Pomeranian Province). This will enable the storage facility to participate in balancing the National Electricity System (NPS) rather than just the local source to which it is currently connected (Bystra wind farm). BES' connection to the 110 kV grid is scheduled to be completed by the end of the first quarter of 2025.
Sales results impacted by accounting events
An accounting event was the factor that had the greatest impact on the financial performance of the Sales Business Line. This refers to the partial release of a provision for charges related to the approved 2023 tariff for G tariff groups and the entry into force of laws regulating energy prices for certain end users in 2023.