Key challenges

Risks related to TAURON Group’s sustainable development Opportunities and threats

The tightening decarbonization policy at the EU level has a significant impact on the functioning of the electricity market in Poland. A permanent change in the structure (mix) of electricity production in connection with the decarbonization of the energy sector is underway. There will be a strong growth of RES and a change in the national energy mix towards low and zero emission sources at the expense of reducing the importance of the conventional sources.

A transition of the utility scale (system) power generation sector towards decentralized generation, increased role of cross-border connections, energy storage and new energy services, such as for example virtual power plants, demand side management, is foreseen. The above direction of the changes has an impact on both, the Distribution Segment that must deal with the smart technologies, electric vehicle charging infrastructure, distributed (dispersed) generation, including the prosumers and the bi-directional electricity flows, while at the same time increasing the quality and security of the supply of electricity, as well as the Generation Segment, whose transition will be geared (oriented) towards performing the function of regulating (adjusting) and stabilizing the power system.

The Strategy and the Update of the Strategic Directions are TAURON Capital Group’s responses to the challenges posed by the business environment and the requirements of the energy sector’s customers:

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Regulations

The European Union’s (EU) decarbonization policy and the implementation of the activities aimed at achieving climate neutrality, as well as the successive regulations seeking to tighten the environmental standards and climate targets, the introduction of the quality-based regulation model in the distribution segment, the changes to the system of support for the RES installations and the EU’s actions aimed at developing a common electricity market. The implementation of the guidelines provided in the National Plan for Energy and Climate and in Poland’s Energy Policy until 2040. Changes in the energy and coal sectors, including work on the government program for energy and mining.

Market

Rising costs of electricity generation, availability and quality of hard coal, demand for electricity, demand for capacity, growing competition on the retail market, increasing level of the cost competitive generation from RES, the curtailment or lack of financing of coal-based energy. The expected solutions regarding the shape of the mining sector and the coal-based energy sector in Poland

Customer

Growing awareness of the customers and the rising requirements with respect to satisfying their needs, as well as the comprehensiveness of the offering, the increasing expectations with respect to customer service quality and availability. An increase in the ecological awareness of the society (public) and a change of the customer’s approach to the way electricity is consumed, including a strong rise in the number of prosumers.

Technologies

Falling prices of renewable technologies, rising competitiveness of such sources versus the conventional sources, the growth of the prosumer energy, a change of the role of the distribution service due to the expansion of dispersed (distributed) power generation. The advancement of the smart technologies, microgeneration, energy storage and hydrogen technologies.