PGE Group strategy until 2030 with outlook to 2050

A permanent reduction in emission intensity will be achieved through changes in generation technologies, expansion of the renewables portfolio and by making it possible for customers to participate in the energy transition with attractive product offerings. The share of low- and zero-emission sources in our generating portfolio will reach 85% by 2030, and renewables will account for 50% of the energy we produce. By 2050, PGE Group will become climate neutral, and 100% of the energy we supply to customers will be green.

PGE Group’s transition will be sustainable and based on social dialogue. PGE is aware of the impact its operations have on the surroundings – in the social, economic and environmental dimensions. PGE’s actions are aimed at maximising the added value for all stakeholders.

The sustainable transformation of the PGE Group

The key development directions for PGE Group are: offshore and onshore wind energy, photovoltaics, grid infrastructure, low-emission district heating and modern energy services. Coal-based energy, nuclear power, trade in hard coal and support areas unrelated to core business will be divested or downsized.

Strategic priorities for PGE Group

PGE Group is ready to implement the sector transition processes and prepare the conventional backbone of the power system for a new ownership structure. The Group will be a pioneer in developing and operating offshore wind energy. The capacity of our wind farms in the Baltic Sea will reach 2.5 GW by 2030 and, as a result of further projects in new areas, PGE’s offshore wind farms will have an installed capacity of at least 6.5 GW by 2040. At the same time, we will be continuing our development program for onshore wind and PV in the coming years, with the goal of adding above 1 GW and above 3 GW in new capacities by 2030, respectively. In the District Heating segment, the Group is planning to transform its heating sources toward low- and zero-emissions (their share in heat production will exceed 70% by 2030), while promoting new connections for individual heating sources or their exchange for eco-friendly solutions. PGE expects to replace more than 100 000 sources of heat in the area of individual heating by 2030.

Implementing the circular economy concept across all of PGE Group’s business areas will play an important role in the energy transition as it will further minimise our environmental footprint.

Grid infrastructure and partnership-like relations with customers are the foundation of energy transition. In the Distribution segment, energy supply quality parameters will be improved (the duration of interruptions in electricity supply will be reduced by 8% in large cities and by 50% in other areas by 2025), along with the efficiency, transparency and cost-effectiveness of connection processes. Grid modernisation and the construction of energy storage sites (at least 800 MW by 2030) will be essential to make a full use of dispersed sources and ensure the safe operation of the system. Essential to achieving these objectives will be financial stability and the development of support within the regulatory model of Distribution System Operators, guaranteeing that these challenges will be overcome, which should translate into an expected increase in free cash flows of approx. PLN 0.7 billion by 2030. PGE Group wants to maintain the highest customer satisfaction level on the market, resulting from the quality of customer service and the energy services being offered. Activities planned in this area cover the development of professional energy services and integrating communication and sales channels. The expected margin growth in the retail segment will reach approx. PLN 0.4 billion annually.

The Group plans to build further added value by allowing its customers to actively participate in the energy transition by offering them renewables installations for customers and access to energy, capacity and system services markets (planned 1 GW of capacity in market services). These segments will contribute to an increase in EBITDA of PGE Group’s retail sales companies by approx. 25% to 2030.

To meet energy transition and competitive challenges, PGE Group will continue improving its operational effectiveness. The Group expects to reduce fixed costs by 15% by 2025 and by 25% by 2030, comparing to the 2019 base (excluding the effects achieved in the Conventional Generation segment). The business profile will evolve away from labour-intensive operations and toward changes in core competences. The ICT area will be leveraged to drive the Group’s efficiency gains through process automation and digitalisation. Demographic trends will have an impact on the workforce size and career development paths. Demographic changes are expected to reduce the headcount by 15% to 2030 and by 50% to 2020, in comparison with 2019. This will necessitate effective projects in the human capital management area. Personnel development will be focused on renewable energy and modern energy services.

PGE Group’s investments will focus on renewable energy, transformation of district heating and grid infrastructure. The Group will no longer invest in new coal assets (this applies to both coal-based electricity generation and coal mining), and investment decisions concerning the construction of new gas sources will be made in 2025 at the latest. The total investment expenditures in 2021-2030 are expected to reach approx. PLN 75 billion, of which 50% will go toward the development of renewable energy sources (offshore and onshore wind, PV, zero-emission cogeneration). Regulated activities, including grid infrastructure and zero-emission cogeneration sources, will be another important area for investment expenditures.

PGE Group investments until 2050