ZE PAK SA Capital Group is a significant electricity producer on the Polish market and an important element of the country's energy system. In terms of installed capacity and electricity production, ZE PAK SA Group is the largest private (uncontrolled by the State Treasury) energy group in Poland, consisting of vertically integrated entities operating in the area of lignite mining, electricity production from conventional and renewable sources, and energy trading.
The Group focuses its activities on several areas. For many years, it operated mainly on the basis of a business profile focusing on the production of lignite mined in nearby open-pit mines, supplemented by wholesale electricity trading and the sale of electricity certificates of origin, activities aimed at ensuring an appropriate number of CO2 emission allowances as well as production and sale of heat. In a situation of pressure on high-emission energy producers and increasing costs of CO2 emissions, the Group has decided to focus its future activities in the area of low-emission and emission-neutral energy sources as well as the production and use of green hydrogen. There are also companies within the Group that deal with, among others, construction and assembly works, maintenance works, service, production and trade activities aimed at meeting the needs and comprehensive service for the industry.
The Group's generation assets include two lignite-fired power plants located in central Poland, in the Greater Poland Voivodeship. Pątnów Power Plant produces energy using lignite in 4 power units with a total capacity of 1,118 MW. Konin power plant, a former coal-fired power plant, today uses 2 biomass units with a total capacity of 105 MW (50 MW and 55 MW) and produces electricity and heat from biomass. The Group also operates a photovoltaic farm with an installed capacity of 70 MWp, located in the commune of Brudzew.
The Group's mining assets are concentrated in PAK KWB Konin SA, which exploits Jóźwin and Tomisławice open pits. The Group intends to conduct lignite mining and production activities no longer than until the end of 2024.
For many years, the Group operated on the basis of a business profile focusing on the production of electricity from lignite mined in nearby open pits. However, this business model has limited prospects for development in the future, in a situation of pressure on high-emission energy producers. The increasing costs of CO2 emissions, conditions related to the emission of other substances (NOX, SO2, dust, mercury, etc.) mean that the Group decided to focus its future activities in the area of low-emission and emission-neutral energy sources, as well as the production and use of green hydrogen.
Around PAK - PCE sp. z o.o. the structure of special purpose vehicles, which are to be responsible for activities in particular technologies of renewable sources, is successively built. Thanks to the planned sale of the majority stake in the structure of PAK – PCE sp. z o.o. to Cyfrowy Polsat Group, it is planned to acquire a partner with strong capital, who will be able to guarantee the implementation of a wide range of prospective investment projects in the area of renewable energy sources and the production and use of green hydrogen.
Special purpose vehicle PAK CCGT sp. z o.o. is to be responsible for the preparation and implementation of the gas unit construction project on the site of the former Adamów coal power plant. The project won the capacity market auction and thus obtained support in the form of a 17-year capacity contract.
As part of its transformation activities, the Group is also active in the area of offshore wind farm construction projects in the Baltic Sea. It is also planned to use the assets in the Pątnów Power Plant for the purposes of the potential construction of a nuclear power plant - for this purpose, ZE PAK and PGE have established a joint company, PGE PAK Energia Jądrowa SA, whose goal and task will be to participate in the planned construction of a nuclear power plant in Konin/Pątnów in Wielkopolska. Both of the above projects are being developed in cooperation with external partners.
Taking into account the changing legal and environmental conditions, the increasing prices of CO2 emission allowances, and the tightening of emission standards for other substances, the Company is already significantly reducing its carbon footprint. In recent years, a significant decrease in CO2 compared to previous years can be observed.
Also in absolute terms, i.e. calculated per unit of electricity production, the Group's emissivity has decreased over recent years.
The best example of the energy transformation and the feasibility of investing in sustainable sources in the Group is the commissioning of the largest photovoltaic farm in Poland in Brudzew, which was already operating at full capacity in 2022, and the commissioning of the second biomass unit at Konin Power Plant. In 2022, the official premiere of the prototype of the Polish bus powered by hydrogen cells took place. The implementation of other investments has also begun, which will soon increase the sustainable generation assets of ZE PAK SA Group. It is worth mentioning here about the plans to build another large-scale photovoltaic power plant with a capacity of about 180 MWp, which is to be built in Przykona commune. Like the power plant in Brudzew, it will be built on post-mining land (the area was originally used by PAK KWB Adamów). In 2022, the construction of a wind farm in the commune of Kazimierz Biskupi and in the commune of Miłosław began. In addition, investment activity also focused on launching projects related to the production and distribution of hydrogen, construction of a hydrogen bus factory and construction of further wind farms, as well as preparatory work for the implementation of further renewable energy sources and necessary tasks to ensure the maintenance of current efficiency and more effective use of assets held mining and manufacturing. An electrolyser is also planned to be installed in Konin power plant to produce hydrogen, which will be produced in the process of water electrolysis using renewable energy sources. The basic source of energy for this installation will be a biomass unit, which will enable the production of the so-called green hydrogen. A hydrogen refuelling station will also be built in Konin and Warsaw, where it will be possible to refuel passenger cars, buses and trucks. In order to enable the supply of hydrogen, mobile hydrogen storage facilities were ordered from the hydrogen plant at Konin Power Plant or from another hydrogen producer to the refuelling station, and the first hydrogen refuelling station was delivered and launched in January 2023.
Hydrogen bus prototype
Visualisation of hydrogen buses plant in Świdnik
Kazimierz Biskupi Wind Farm
Miłosław Wind Farm
In the years 2020-2021, about 900 ha have been developed for the future production of sustainable energy in the post-mining areas (PAK KWB Adamów post-mining areas), and in 2022 work was underway to designate another approximately 1 400 ha (PAK KWB Konin post-mining areas). All these investments are part of the activities included in the so-called EU “taxonomy”.
In 2022, the power plants of ZE PAK SA Group generated a total of 3.5 TWh of net electricity, which was sold under bilateral contracts and framework agreements for the sale of electricity, as well as on energy exchanges and on the balancing market. Including energy from trading, the Group's sales in 2022 amounted to 6.03 TWh.
The vast majority of the sales revenue generated by the Group comes from the sale of electricity. The Group also generates revenues related to the Capacity Market mechanism as a result of winning capacity market auctions (primary market) and taking over capacity obligations from other entities (secondary market). This is supplemented by revenues from the sale of heat, contracts for construction and renovation services and property rights from certificates of origin for energy. An additional source of sales revenue, depending on the level of generation costs and energy prices on the market and production volume, is revenue from the termination of long-term contracts for the sale of electricity.
In 2022, sale revenues amounted to PLN 4,200 million and EBITDA was recorded at the level of PLN 391 million. As at December 31, 2022, the book value of ZE PAK SA Group’s assets amounted totally to PLN 4,539 million.