Integrated Impact Report of Polskie Sieci Elektroenergetyczne S.A
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Integrated Impact Report of Polskie Sieci Elektroenergetyczne S.A. Filling Poland with Power EDITION: 2020 INDUSTRY: ENERGY Table of Contents HOME PAGE ........................................................................................................................... 4 I. LEARN ABOUT PSE ........................................................................................................ 6 1.1. PSE’s role in the power sector ............................................................................................................... 6 1.2. PSE as transmission system operator ................................................................................................... 8 1.3. Our company in numbers ....................................................................................................................... 12 1.4. Management principles – corporate governance and organisational culture ................... 18 1.5. Risk management ...................................................................................................................................... 25 II. BUSINESS AND VALUE CREATION MODEL .................................................................. 38 2.1. Business Model ........................................................................................................................................... 38 2.2. Value Creation Model .............................................................................................................................. 38 III. BUSINESS STRATEGY ........................................................................................................ 53 3.1. Summary of the implementation of the Strategy for 2017-2019 .......................................... 54 3.2. Business strategy 2020-2030 ................................................................................................................. 76 3.3. Sustainable development strategy ...................................................................................................... 81 3.4. Key global trends ....................................................................................................................................... 83 IV. IMPACT ON THE ECONOMY AND THE MARKET ........................................................ 92 4.1. Our impact on the economic development of Poland ................................................................ 92 4.2. Stable operation of the Polish Power System .............................................................................. 104 4.2.1. Management of the power system in Poland .......................................................................... 105 4.2.2. Activities promoting reliable operation of the transmission system ............................... 109 4.2.3. Key system operation reliability indicators ................................................................................ 110 4.2.4 Development of the transmission system ................................................................................... 113 4.2.5. Improvement of the infrastructure investment project implementation model ......... 118 4.2.6. Maintaining the transmission network........................................................................................ 122 4.3. Strengthening innovation and implementing new technologies ......................................... 129 4.4. PSE as a solid business partner.......................................................................................................... 134 4.4.1. Building business relations and partnerships ........................................................................... 134 4.4.2 Requirements and standards of relationship with contractors and subcontractors ... 137 V. ENVIRONMENTAL IMPACT AND CLIMATE CARE ..................................................... 140 5.1 Integrated environmental, health and safety management system ..................................... 140 5.2 PSE’s priorities concerning environmental protection ............................................................. 141 Page 2 of 222 5.3 PSE approach to biodiversity protection ........................................................................................ 147 5.4 Energy efficiency ...................................................................................................................................... 150 5.5 Carbon footprint ...................................................................................................................................... 151 VI. IMPACT ON SOCIETY AND EMPLOYEES .................................................................... 155 6.1. Development of regions and local communities ........................................................................ 155 6.1.1. Investment in the development of regions ............................................................................... 155 6.1.2. Cooperation with local governments .......................................................................................... 157 6.1.3. Educational activities .......................................................................................................................... 165 6.1.4. Impact on local communities.......................................................................................................... 166 6.2. Flagship social projects ......................................................................................................................... 172 6.3. Quality of Poles’ lives vs electricity supply .................................................................................... 183 6.4. PSE’s activities in the context of the transmission tariff and electricity bills .................... 185 6.5. PSE’s HR development priorities ....................................................................................................... 189 6.6. Highest safety standards ...................................................................................................................... 201 VII. ABOUT THE REPORT .................................................................................................. 208 7.1. About the reporting process .............................................................................................................. 209 VIII. GLOSSARY .................................................................................................................. 218 Page 3 of 222 HOME PAGE TABS: I. LETTER FROM THE PRESIDENT OF THE MANAGEMENT BOARD OF PSE [GRI 102-14, GRI 102-15] (Projekt w oprac.) II. NEW BUSINESS STRATEGY III. LEARN ABOUT OUR IMPACT IV. KEY FIGURES THE ECONOMY AND MARKET AREA PPS operation data • 1 41.297 TWh – total electricity consumption by final consumers connected to the PPS in 2019, • 9 7.228 GWh – total quantity of electricity supplied from the transmission network to domestic transmission service customers in 2019. System operation reliability indicators • 9 9.99 percent – electricity supply continuity index in 2019. The level of this index confirms the certainty of power supply to all our transmission service customers. • 1 .38 percent – transmission loss rate. In 2019 it was the lowest ever. • 9 9.77 percent – availability index for transmission facilities (DYSU) in 2019. It reached a high value at reference value of ≥ 97.5 percent. Capital expenditure • PLN 8.4 bn – PSE’s planned capital expenditure for 2020-2024, • PLN 1.5 bn – capital expenditure incurred by PSE in 2019, • PLN 1.95 bn – total value of contracts awarded to contractors in 2019. Forecast and R&D • 181.1 TWh – forecasted net electricity demand in Poland in 2030, • PLN 25 m – total cost incurred by PSE in 2017-2019 for R&D projects, of which PLN 7.2 m was earmarked for research and PLN 17.8 m for development work. Page 4 of 222 Financial data • PLN 9,106 m ─ net sales in 2019, • PLN 729 m ─ net profit in 2019, • PLN 1,513 m ─ EBITDA in 2019, • 4.82 percent ─ ROE (net profit/equity) in 2019. Capacity Market and Balancing Markets data • 8,671.154 MW ─ capacity obligation volume resulting from 103 capacity agreements concluded, for the delivery year 2024 under the main auction in the Polish Capacity Market in 2019, • 100 percent – failure-free operation of the Balancing Market – 100 percent, • 129 participants of the Balancing Market in 2019. NATURAL ENVIRONMENT AREA • PLN 0 (zero) – monetary value of fines and total number of non-monetary sanctions for non- compliance with environmental laws and regulations in 2019, • 86,375 GJ – total electricity and heat consumption in the organisation in 2019 (decrease by 10.55 percent YoY), • 1.476 TWh – electricity transmission losses in 2019 (decrease by 8.1 percent YoY). In addition, mainly owing to the decrease in electricity transmission losses, reduction of greenhouse gas emissions was also recorded. SOCIETY AND EMPLOYEES AREA • 5.3 percent ─ share of the fee paid to PSE for transmission services, included in the household electricity bill in 2019, • PLN 4.4 m ─ total value of PSE’s social project in 2019 and in the 1st half of 2020, • 2,662 information meetings with residents for projects undertaken in 2016 – 2018, including 746 meetings in 2019, • 47 training sessions on the Polish Power System Simulator, in 2019 with the participation of 338 PSE O&M personnel and 127 DSO and TSO dispatchers, • 37 industry conferences, debates, seminars and congresses with the participation of PSE's experts in 2019, • 69 PSE experts involved in conferences, debates,