The business model is an element of the implementation of the Group’s Strategy and through the structuring of the operations, organizing them into logical, interworking business processes, it allows for optimizing the building of the value of TAURON Group as a whole, taking advantage of the economies of scale of the business conducted and the synergies resulting from the collaboration of the individual links of the value chain.
TAURON Group’s business operations aimed at implementing its mission and vision based on its values and the Corporate Social Responsibility Code of Conduct are conducted based on seven Lines of Business, defined in accordance with the Group’s value chain links: Mining, Generation, Heat, Renewable Energy Sources (RES), Trading, Distribution and Supply
Within the structure of TAURON Group, which is a vertically integrated enterprise, the Distribution System Operator (hereinafter DSO) is functioning in the Distribution Line of Business. The Business and Operating Model has been developed taking into account the requirements related to unbundling (i.e., separating the electricity distribution operations from the operations with respect to electricity production and supply of such electricity to the final consumers), set out in the Compliance Program and the generally applicable legal regulations, taking into account the DSO’s legal, functional and organizational separation within the structure of TAURON Group.
Additionally, there are other subsidiaries operating as part of the Group, whose operations are focused on providing support services for the Group’s other subsidiaries, such as, for example, accounting and human resources services, IT services, security services, insurance services. Customer service is provided by one of the Group’s subsidiaries for the Supply Line of Business and, taking into account the independence of the DSO and other unbundling rules, for the Distribution Line of Business.
TAURON Group’s business model in 2020
Table 1
Export to Excel| Mining |
It comprises mainly hard coal mining, processing and sales to the utility scale power plants, heating industry and individual customers. Apart from hard coal mining, other mining operations are also conducted, involving open pit extraction of limestone, as well as its processing and sales within the Group and outside the Group. The operations of this Line of Business are conducted by the following subsidiaries: TAURON Wydobycie S.A., Kopalnia Wapienia “Czatkowice” sp. z o.o. and Spółka Usług Górniczych sp. z o.o. The current structure of TAURON Wydobycie S.A. is based on the model composed of the Center (Centrum), with its seat in Jaworzno, and three production plants (coal mines): Zakład Górniczy Sobieski (Sobieski Coal Mine) in Jaworzno, Zakład Górniczy Janina (Janina Coal Mine) in Libiąż and Zakład Górniczy Brzeszcze (Brzeszcze Coal Mine) in Brzeszcze. The Center’s operations include, among other, shared functions management, planning and sales. The production facilities are mainly dealing with hard coal mining and processing. This Line of Business also includes a subsidiary that provides mining works services – Spółka Usług Górniczych sp. z o.o. Kopalnia Wapienia “Czatkowice” sp. z o.o. is an open pit mine, extracting high quality carbonate limestone deposits, located in the Krzeszowice municipality. The limestone from the Czatkowice deposit is used in the power generation, steel making, construction, lime, cement, sugar, road building industries, as well as in agriculture. |
| Generation |
It comprises electricity generation using conventional sources and renewable energy sources, including the biomass burning process. The operations are conducted by TAURON Wytwarzanie S.A. subsidiaries and Nowe Jaworzno Grupa TAURON sp. z o.o., the company responsible for the construction and operation of the new power generation unit in Jaworzno with the capacity of 910 MW. Electricity generation by the conventional units is carried out by 6 power plants with the total capacity of approx. 5.2 GWe and 1.3 GWt and by two biomass-fired generating units with the total capacity of 105 MWe. The total capacity of approx. 5.2 GWe is made up of 5.1 GWe in coal fired units and 0.1 GWe in biomass units. The power plants are located in the following cities: Łaziska Górne, Będzin, Trzebinia, Stalowa Wola and Jaworzno. This Line of Business also includes the TAURON Serwis sp. z o.o. subsidiary that provides technical maintenance (support) services. In addition, a project to build a 5 MW photovoltaic farm was completed in 2020, built on the site of a former coal-fired power plant. |
| Heat |
It comprises heat generation, transmission and distribution as well as supply, using co-generation sources. Heat generation is carried out by 4 combined heat and power plants, with the total capacity of approx. 0.35 GWe and 1,2 GWt, located in the following cities: Katowice, Tychy and Bielsko-Biała, as well as by local boiler houses. The generating units are using hard coal and biomass for their production. The heat operations are conducted by TAURON Ciepło sp. z o.o. and SCE Jaworzno III sp. z o.o. subsidiaries, that are, in total, operating approx. 1,180 km of the distribution heating networks on the territory of, among others, Bielsko-Biała, Czechowice-Dziedzice, Katowice, Dąbrowa Górnicza, Sosnowiec, Chorzów, Siemianowice Śląskie, Jaworzno, Zawiercie and Mysłowice, with 888 km of TAURON Ciepło’s own networks, and 121 km of SCE Jaworzno III’s networks. |
| Renewable Energy Sources (RES) |
It comprises electricity generation using renewable energy sources, except for biomass burning, which, according to the Business Model, is carried out within the Generation and Heat Lines of Business. Electricity production from biomass is also classified as renewable energy at TAURON Group. This line of business is managing 34 hydroelectric power plants with the total capacity of 133 MW, located primarily in the south of Poland, and 9 wind-based power plants with the total capacity of 381 MW, located primarily in the north of Poland. The segment’s operations are conducted by TAURON Ekoenergia sp. z o.o., TAURON Ekoserwis sp. z o.o. subsidiaries and the group of special purpose vehicles set up to manage the RES assets. |
| Distribution |
It comprises electricity distribution using the distribution grid located in the south of Poland. TAURON Capital Group distributes electricity on the territory of the following regions: Małopolska, Lower Silesia, Opole and Silesia, and partly also Świętokrzyskie, Podkarpackie, Łódzkie, Wielkopolska and Lubuskie. The operations are conducted by TAURON Dystrybucja S.A. subsidiary that performs the function of the DSO, including guaranteeing independence and compliance with the unbundling requirements. The operational functions (activities) are carried out by 11 branches located in Będzin, Bielsko-Biała, Częstochowa, Gliwice, Jelenia Góra, Cracow, Legnica, Opole, Tarnów, Wałbrzych and Wrocław. The operations of TAURON Dystrybucja are supported by the TAURON Dystrybucja Pomiary sp. z o.o. subsidiary. |
| Trading |
It comprises electricity wholesale trading, as well as trading and management of the CO2 emission allowances and property rights arising from the certificates of origin of electricity, as well as fuels. Such operations are conducted by TAURON Polska Energia S.A. and TAURON Czech Energy s.r.o. subsidiaries. The Trading Line of Business also includes the procurement of biomass, as well as the utilization of the mining and burning by-products carried out by Bioeko Grupa TAURON sp. z o.o. subsidiary. |
| Supply |
It comprises the supply of electricity and natural gas, as well as related products, to the final consumers. The operations are conducted by TAURON Sprzedaż sp. z o.o. and TAURON Sprzedaż GZE sp. z o.o. subsidiaries. The supply operations are conducted nationwide and, on a smaller scale, on the Czech and Slovak markets. This Line of Business also includes services related to street lighting, as well as energy efficiency and smart technologies services carried out primarily by TAURON Nowe Technologie S.A. subsidiary. The company is managing approx. 745 thousand street lamps. |
Structure of TAURON Capital Group’s Line of Business
The other operations are a part of a separate line of business called Shared Services Centers. It includes such services, provided for TAURON Group’s subsidiaries as, among others, accounting and human resources services, as well as IT services, carried out by TAURON Obsługa Klienta sp. z o.o. subsidiary, managing insurance policies for all of the Group’s subsidiaries – TAURON Ubezpieczenia sp. z o.o. subsidiary, security and order keeping services – Wsparcie Grupa TAURON sp. z o.o. subsidiary.
The goal of such a division of competences is to relieve the Lines of Business from the obligation to carry out the processes that are not directly associated with their core business operations (non-core operations related processes), and also to reduce the costs of performing such processes thanks to the economies of scale and the improvement of operational efficiency. As part of the operations of TAURON Obsługa Klienta sp. z o.o., customer service is also provided for the TAURON Sprzedaż Sp. z o.o. and TAURON Sprzedaż GZE Sp. z o.o. subsidiaries and, taking into account the independence of the DSO and compliance with other unbundling rules, for TAURON Dystrybucja S.A.
SEE ALSO:
Organization by Lines of Business
Financial results and prospects by operating segments (lines of business)